Minnesota’s ObamaCare insurance exchange is on the verge of collapse, but don’t expect Wisconsin liberals to be talking about it any time soon. Ever since Gov. Scott Walker (R) rejected federal ObamaCare Medicaid expansion money and refused to have Wisconsin pay for an insurance exchange (leaving the state to use the federal exchange), Wisconsin liberals have repeatedly pointed to Minnesota as a shining example of what Wisconsin could have been if only Walker had embraced the Affordable Care Act.
But Minnesota, once that shining example of all that was good about state-funded, federally-controlled health insurance exchanges and expanded Medicaid roles, is now in big trouble. According to Bloomberg, Minnesota’s individual insurance exchange has come “to the brink of collapse” in recent weeks and only emergency measures to allow insurers to raise rates has staved off further disaster. Rates will rise by at least 50%, and a spokesman for MNSure, the cleverly named state ObamaCare exchange, told Bloomberg the average rate increase will be a stunning 60%.
One of Walker’s biggest critics, and one of the Minnesota exchange’s biggest fans, has been Citizen Action of Wisconsin, a liberal think tank that has spent ample time defending Minnesota’s approach to ObamaCare and criticizing Wisconsin’s approach to the program. In 2013, Citizen Action released a report that blamed Wisconsin’s higher insurance premium costs on Walker’s refusal to embrace ObamaCare.
“Wisconsin’s rejection of a state-based exchange strip policymakers of additional tools for moderating health insurance rates,” the liberal group asserted. Additionally, the state’s unwillingness “to implement rigorous review of health insurance rates,” which means use its regulatory power to practically set the prices of private insurers, contributed to Wisconsin premiums being higher than Minnesota premiums.
What Citizen Action doesn’t mention in all of its praise of the Minnesota approach to ObamaCare is that despite fully embracing the program, insurance premiums still rose after MNSure launched its marketplace. Further, Robert Kraig, the head of Citizen Action, has tried to have it both ways when it comes to his critique of Wisconsin and ObamaCare. Citizen Action has a distant relationship with Common Ground Healthcare, a federally-subsidized health insurance cooperative that launched in Wisconsin around the time the ObamaCare exchange opened.
As part of Citizen Action’s “Got Healthcare?” campaign to promote the Affordable Care Act, Kraig excitedly praised the number of options Wisconsin consumers had for health insurance on the exchange. “It’s what we were hoping for. We were hoping people would have a lot of options,” he told the Associated Press in 2013.
Trying to have it both ways, criticizing Gov. Scott Walker’s rejection of ObamaCare on the one hand while praising Wisconsin’s overall mandatory participation in ObamaCare undermines Kraig’s message. But that hasn’t stopped numerous media outlets from touting or quoting Citizen Actions’ report praising Minnesota’s insurance exchange and price controls.
The Minnesota exchange’s embarrassing near-collapse is proof that Citizen Action’s theory about the state’s success with ObamaCare was based on flawed assumptions. Writing for the MacIver Institute, a free-market think-tank, Nick Novak pointed out in 2013 that Citizen Action used incomplete rate data to make their case.
“The first problem with Citizen Action’s analysis is its misrepresentation of rates in Minnesota. The report relies on information released by the federal government on September 25th that only included health care rates for the Minneapolis-St. Paul area, instead of the whole state.”
Novak when on to point out that there are states not named Minnesota who did exactly what Minnesota did and ended up with insurance rates that were higher than Wisconsin’s rates. By confining their research to just two states, Citizen Action managed to create a small enough data sample that verified their own research bias.
A researcher with Pricewaterhouse Coopers’ Health Research Institute also expressed skepticism in 2013 of the theory that state-funded exchanges result in lower premium costs for consumers. “I don’t know that there’s evidence to suggest that state-based exchanges have average lower premiums,” he told a Minnesota newspaper.
But while the recent near collapse of Minnesota’s ObamaCare exchange proves the state and its liberal policies aren’t the utopian success liberals and some media outlets want to make it out to be, the development is further proof that the ultimate losers under ObamaCare are consumers.
A headline in the Star Tribune blared this week: “Choices shrinking in Minnesota’s individual health plan market.” The story went on to quote a local health insurance industry expert who observed, “It’s almost like they’re running out of good choices. Each year, the selection gets higher priced and more limited.”
In Wisconsin, federal premium data reviewed by the MacIver Institute shows Wisconsin consumers will see an average price increase of 10%, with some plans costing up to 45% more. This is on top of premium increases last year.
Another new feature of the individual insurance market in Wisconsin is the departure of three insurance companies who have announced they are no longer going to offer plans through the federal ACA exchange. In May, Humana announced it was going to stop offering individual plans in Wisconsin through the exchange. In June, health insurance giant UnitedHealthcare announced it wasn’t going to participate in the ObamaCare marketplace in Wisconsin. According to the Milwaukee Business Journal, the insurer cited a lack of profitability as a key motivator behind its departure. Now in October a hometown insurer, Arise Health Plan, a subsidiary of Madison-based WPS Health Solutions, announced it wasn’t going to offer plans via the ObamaCare exchange. “The marketplace was telling us that these are not profitable products,” a corporate spokesperson candidly said of the news.