People who buy health insurance on their own lost a health plan option on Friday as regulators announced that Minnetonka-based Medica has hit an enrollment cap for 2017.
With Medica no longer selling to most new customers in the individual market, that leaves just one option in dozens of counties outside the Twin Cities metro for people who want or need to switch into a new health plan next year.
The move applies only to the individual insurance market — where about 250,000 state residents buy coverage — and doesn't impact people with health insurance through employer-based plans or government programs like Medicare.
But it's the first of what could be several examples where Minnesota health plans stop offering coverage to new customers in a market that's struggling under the federal Affordable Care Act.
State law requires that carriers give current subscribers a chance to renew their policies, so Friday's announcement does not apply to Medica's current enrollees.
"Individual health plans from Medica are no longer available for purchase by new customers, either on or off the MNsure exchange," the state Commerce Department said in a statement issued Friday morning. "The Medica enrollment limit does not affect current Medica customers who want to renew their coverage for 2017."
In September, the department approved enrollment caps for four of the five health insurance companies that sell coverage in the individual market. Caps are an emergency measure, regulators say, that was required to prevent health insurers from abandoning the market altogether.
HealthPartners and UCare haven't yet hit their enrollment caps. PreferredOne isn't enrolling new customers within its enrollment cap. Only Blue Plus — the HMO from Blue Cross and Blue Shield of Minnesota — doesn't have an enrollment cap for 2017, meaning the policies serve as the default option.
Blue Plus is available in all Minnesota counties except for five where regulators said Medica will still be an option.
"The Medica enrollment limit also does not affect anyone living in the five counties (Benton, Crow Wing, Mille Lacs, Morrison and Stearns) where the only available insurers all have enrollment limits," the department said on its website. "In an agreement with the Minnesota Commerce Department, Medica will continue to accept new customers from these five counties."
Patients and lawmakers have noted that the Blue Plus network of doctors and hospitals is limited.
"With the enrollment cap on Medica there is no plan available that allows in-network access to Olmsted Medical Center," wrote Michael Pagelkopf, an insurance agent in Rochester, in an e-mail.
At the start of open enrollment on Nov. 1, Blue Plus and Medica were the only two options in dozens of counties across a broad swath of southern, western and northwestern Minnesota. In those counties, customers who don't currently have Medica coverage now can only purchase Blue Plus.
The individual market is undergoing a fundamental transformation under the Affordable Care Act. Previously, health insurers were allowed to deny coverage to people with preexisting health conditions to lower costs.
The health law in 2014 started requiring insurers to offer all shoppers coverage. Since then, health plans have struggled to make the business profitable, prompting several carriers across the country to pullback from the market.
This has included a retreat from new government-run health exchanges like Minnesota's MNsure exchange that are an option for individual market consumers. In Minnesota, Blue Cross dropped policies that currently cover about 103,000 people, forcing those customers to look for a new option.
Beyond the enrollment caps and network limits, all carriers in the market are boosting premiums by an average of at least 50 percent.
This article originally appeared in the Minneapolis Star Tribune. To view the original article, please click here.