More Obamacare fallout as rates spike for small businesses and MNsure enrollees

The Star Tribune ran a front-page story this week about small business health premiums spiking as a result of Obamacare’s compliance mandates. The story should come as no surprise to anyone who read the Freedom Foundation’s exclusive report on this very issue last month, which analyzed small group insurance rates for plans that are being forced into compliance with Affordable Care Act mandates. The Freedom Foundation’s analysis found average rate hikes ranging from 37 percent to 52 percent, depending on age.

Meanwhile, insurance premiums on the MNsure exchange are also headed up. The state’s Commerce Department recently announced that average rate increases will be "only" 4.5 percent. However, that is an unweighted average that vastly understates the increase most MNsure customers will see, and does not account for massive rate hikes on insurance policies provided by PreferredOne, which recently withdrew from the exchange.

University of Minnesota math instructor David Brokken writes in a MinnPost commentary: "Using a weighted measure, the aggregate increase in revenue for these four providers —assuming no changes in the subscriber base —would be approximately 11.8 percent, which more accurately reflects the increase in premiums. But that 11.8 percent still doesn’t take into account the wild card of the 60 percent of MNsure subscribers orphaned after Preferred One jumped ship."

Nonetheless, the Minnesota Commerce Department stands by its unweighted averages, telling the St. Paul Pioneer Press: "MNsure is a functioning marketplace where consumers will continue to shop to get the best deal for their health insurance." Apparently the state’s definition of "functioning marketplace" is as dubious as their definition of "average rate hike."

Stay In the Loop

Stay Up To Date

Sign up today for our
e-update to find out what is
going on in your state and
local government.

FFM Tipline

We will do our best to uncover the wasteful spending you report.

Print