Health Insurance Costs 44% Less in Minnesota

It’s called the Affordable Care Act, but it looks as though obtaining health care coverage on the new private exchanges will generally be much more affordable in Minnesota than Wisconsin.

The lowest-cost “silver tier” plan in Minnesota will cost an estimated $192 per month, according to averages calculated by the U.S. Department of Health and Human Services in September. The same level of coverage in Wisconsin is expected to cost an average of $344.

Minnesota set up its own online marketplace — MNsure — where residents choose insurance plans. Wisconsin residents seeking coverage under the Act must use the federally run exchanges.

Progressive advocacy group Citizen Action of Wisconsin released a report comparing Badger and Gopher premiums in more detail. The report argues that policy decisions affected the difference in premium rates.

“Wisconsin’s decision to turn down enhanced federal Medicaid dollars, and its decision not to implement more robust rate review, can explain a substantial portion of the premium gap with Minnesota,” states the report, authored by Kevin Kane and Robert Kraig of Citizen Action.

The Pioneer Press in Minnesota’s twin cities of Minneapolis and St. Paul also analyzed premiums in each state along the St. Croix River. Its analysis found Minnesota rates lower than its eastern neighbor. The article chalked this up to different management of the states’ pools of people requiring high-risk insurance.

Minnesota’s high-risk pool is closing at the end of 2014 and will not accept new enrollees after Dec. 31. Wisconsin officials are closing that category of coverage under the state’s Medicaid program, BadgerCare starting April 1. Wisconsin’s Health Insurance Risk-Sharing Plan members are being directed to the private health-care exchanges. This could drive up the cost of premiums for Wisconsin residents shopping in the private market.

Merton Finkler, an economics professor at Lawrence University in Appleton, Wis., said the two states have managed their health care systems differently for the past few decades.

Minnesota is better than Wisconsin at focusing on primary care and the Twin Cities have lower health care costs than other regions because of business alliances active for two or three decades, Finkler said.

At a November conference by the Wisconsin Institute for Public Policy and Service, J.P. Wieske, public information officer for the Wisconsin Office of the Commissioner of Insurance, cautioned against Minnesota and Wisconsin comparisons.

“It’s almost not an apples-to-apples comparison,” Wieske said. “Minnesota started with a market that was different from a rate perspective than we have here… So our changes were much bigger than Minnesota’s were. There are a lot of factors.”

Related Story

• How $1.2 billion in Obamacare money will help Minnesota offer more health care coverage than Wisconsin.

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