Nov. 18--OLIVIA -- Legislators heard the pain that rising health care insurance premiums are causing those who are buying individual policies this year.
Small business owners are losing employees, people are quitting jobs to qualify for subsidized care and many others are seeing their standard of living decline as they see their monthly premiums rise by 50 percent and sometimes more.
Over 60 people came to voice their concerns at a town hall meeting hosted Monday in Olivia by state lawmakers Rep. Tim Miller, R-Prinsburg, and Sen. Lyle Koenen, DFL-Clara City. They were joined by Rep. Matt Dean, R-Dellwood, chair, Health and Human Services Finance committee; and Sen. Kathy Sheran, DFL-Mankato, chair of the Health, Human Services and Housing committee.
"Everyone in this room can agree we need to start moving forward with some solutions and fixing things,'' Miller said. He said rising costs are not a Republican or Democratic issue, but a Minnesota issue to solve.
The problems were easy to define. Miller has heard of many cases in which families are seeing 50 percent increases in their premiums. He cited one case in which a family of three has seen the monthly premium jump from $650 to just under $1,000, while their deduction has grown as well.
Insurance agents attending the town meeting could tell of even larger hits. Agent Joel Harmoning, of Fairfax, told of one family with three kids being asked to pay $30,000 in annual premiums. Mom or dad has to earn $14.42 an hour just to pay for the coverage, he pointed out.
A small business owner told the legislators that she and her husband are losing their two employees due to the rising costs. An insurance agent said he's actually had people call their employers from his office and give their two weeks notice. They realized they'd be better off financially by lowering their income and qualifying for subsidized health insurance.
Premiums remain stable for most of those obtaining insurance through large group policies, according Dean and Sheran. But those purchasing individual policies -- often farmers and small business owners -- often see hefty hikes.
In part, insurance companies lost money on those policies by under pricing them last year, according to the legislators.
The companies did not anticipate how quickly people with chronic diseases would shift from public programs to the individual market as a result of the Affordable Care Act. The federal law requires that insurance companies sell coverage to all people, including those with prior health conditions.
The costs for providing care to these very sick people are falling mainly on those buying individual insurance policies, according to Sheran. The costs are silo'ed, and not distributed throughout the entire range of group and other policies, she explained.
A host of other factors also are driving up costs, such as hikes in the costs for generic drugs that Dean described as "exorbitant.''
Minnesota mandates that insurance coverage provide for more services, and the state is in effect being penalized for its past history of providing the best care at lower costs. Minnesota now ranks 22nd in terms of affordable care in the nation, according to Dean.
The federal Affordable Care Act has added administrative costs to providing health care. One participant told how a series of blood tests cost $80 when he paid by check. The cost for the same rose to $250 when he submitted it for coverage under his preventative medicine policy, and faced the added administrative costs.
Health care costs have risen on their own as well, according to participants.
A Clara City insurance agent said he and his wife paid out $641 when she had blood work and an ultrasound performed after learning she was pregnant about two years ago. This time around, the very same services cost $2,425, Kyle Goeman told the legislators.
We all play a role in rising costs. Barbara Dolezal, a doctor of chiropractic, Alexandria, said the U.S. represents 5 percent of the world's population and accounts for 75 percent of all prescriptions for medicines. Others expressed concerns about over utilization of health care when it comes without direct costs; others noted the obesity epidemic in the country.
Some pointed out that the rising costs are not distributed in a fair manner. Barb Kirtz, a retired tax preparer in Olivia, said there are many cases in which business owners and farmers can show incomes qualifying them for subsidized health insurance, although they have large assets. And a number of participants cited cases in which couples are living together and not getting married, or one family member deliberately does not work, all for the sake of qualifying for subsidized insurance rates.
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