Rate shock hits Minnesota's small group health insurance market

The Freedom Foundation of Minnesota released an analysis this week of small group health insurance in Minnesota, finding massive rate hikes for many small businesses and their employees that are being forced into compliance with the Affordable Care Act. Read the Freedom Foundation’s full report here.

According to rates submitted by insurers and approved by the Minnesota Department of Commerce, insurance is about to get much more expensive for small businesses and their employees, particularly those whose small group is predominantly healthy and whose current insurance plan is considered non-compliant with the Affordable Care Act. According to the Minnesota Department of Commerce, these non-compliant plans comprise about one-quarter of the total small group insurance market, meaning tens of thousands of Minnesotans will be affected.

The Freedom Foundation analyzed small group health insurance rates from the state’s three largest small group insurers. Based on the findings, it appears the cost of complying with the Affordable Care Act is substantial.

In summary, for a 27-year-old who is part of a healthy group with traditional health insurance carrying a $500 deductible and requiring co-pays, average premiums statewide will increase 52 percent this year over last. For a 45-year-old with the same traditional health plan, average premiums statewide will increase 44 percent. And a 60-year-old’s premium increases an average of 37 percent statewide. The rate hikes for health savings accounts are even steeper (see chart).


Rates may vary significantly by region, so be sure to look at the detailed county-by-county breakdown at the end of our full report.

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