Minnesota’s largest health insurance company to reduce individual healthcare plans

© Laszlo Balogh
Blue Cross and Blue Shield is the largest insurer for the state of Minnesota – for now. The company announced it will limit its coverage for individuals, leaving Minnesotans who don’t receive insurance from their employers in a tough position.

Insurance provider Blue Cross and Blue Shield of Minnesota (BCBSM) decided to limit its health plans for individuals and families in Minnesota in 2017, citing financial losses.

"Based on current medical claim trends, Blue Cross is projecting a total loss of more than $500 million in the individual [health plan] segment over three years," the company said in a statement.

BCBSM has said that claims for medical care are exceeding premium revenue for individual plans, and reported a loss of $265 million from the individual market in 2015 and an estimated loss exceeding $500 million in the individual market over the past three years.

So what does this mean for the 103,000 Minnesotans with individual coverage? Well, nothing particularly good. There is a chance that more people opt out of the health insurance system completely, especially because BCBSM was one of the few insurers that offered a statewide network, rather than one that was limited to the Twin Cities of Minneapolis and St. Paul.

By and large these people aren’t going to get employer-based coverage,” Roger Feldman, a health insurance expert at the University of Minnesota told the Minneapolis Star Tribune. “If they’re not eligible for Medicaid or other public programs, then the individual market has got to be the way that we insure them. If the individual market doesn’t work, we’re not going to insure them. That’s my concern.”

"We understand and regret the difficulty we know this causes for some of our members," the insurer wrote in its statement. "We will be notifying all of our members individually and work with them to assess and transition to alternative coverage options in 2017."

BCBSM is not the only company to limit coverage. In April, UnitedHealth announced that it would pull out of all but a "handful" of state health insurance exchanges established by the Affordable Care Act, better known as Obamacare.

This could be a sign of things to come, Cynthia Cox of the Kaiser Family Foundation, told NPR. She explained that the insurance market is shifting.

"Right now what it seems like is that insurance companies are really trying to reset their strategy," Cox said. "So they may be pulling out selectively in certain markets to re-evaluate their strategy and participation in the exchanges."