Minnesotans value a high quality of life. It is part of the Minnesota story and one of our competitive advantages. This includes having healthy people in healthy communities. Historically, policy makers have recognized the importance of health care access by investing in a range of systems and resources that ensure Minnesotans have access to affordable health insurance programs. However, the cost of health insurance can vary dramatically depending on where you live in Minnesota. With the release of the new premiums for the 2019 health care exchange it is worth taking a look at the geography of health insurance costs in Minnesota.

How do Minnesotans obtain health insurance? Despite the attention paid to the health care exchange, the majority of Minnesotans still access health insurance through their employers. 58% of Minnesotans access employer provided insurance through either large or small group insurance coverage plans. Employers must contribute a minimum of 50% of premium costs for employee coverage. Premium rates for small group insurance are rising this year, translating to higher costs for both employers and employees.¹

An additional 36% of Minnesotans are insured through a government program such as Medicare, Medicaid (called Medical Assistance in Minnesota), or MinnesotaCare. Minnesota has a number of public options for health care coverage for income qualified households. The deepest level of subsidy is for Medical Assistance (MA). A 40 year old single individual without children or a disability needs to make less than than  $16,146, or 133% of the federal poverty guideline, to qualify for MA.²

The other primary public option for Minnesota households is MinnesotaCare. MinnesotaCare is a health insurance option that operates on a sliding scale based on family size and income.³ For a single person with an income of $24,280, monthly premiums will be about $80 a month in 2019.⁴

One advantage of public health  options in Minnesota is that they are consistent across the state. Regardless of geography, MA and MinnesotaCare have the same income eligibility requirements and the same premium costs. This isn’t to say that access to health care services is consistent – there are areas in Minnesota that have service gaps due to a lack of clinics and providers – but the programs are equally accessible.

There is good news for Minnesotans who intend to purchase insurance through Minnesota’s health care exchange, MNSure. According to the Minnesota Department of Commerce, premiums for Minnesota families are going down between 7.4% and 27.7%.⁵ According to the Department of Commerce this is due to a combination of factors including a higher number of healthy people accessing health insurance on the exchange than previously anticipated, and most importantly the Minnesota Premium Security Plan enacted two years ago to provide reinsurance for high value insurance claims.⁶ The reduction in premiums for 2019 follows a 20% reduction in premiums this year.⁷

Many variables affect the cost of insurance such as type of coverage, age, tobacco use, and family size, and it is somewhat difficult to make broad comparisons about the cost of health insurance. The Department of Commerce uses a benchmark of a single 40 year old person in the second lowest priced silver plan in a given county. Silver plans are fairly comprehensive plans with mid-range premiums and estimated coverage of 66-72% of total health care costs.⁸ Silver plans also have lower deductibles and copays for the insured individual or family than bronze plans, but have lower premiums than gold plans. This year, depending on where you live, a single 40 year old person in Minnesota can access the benchmark plan for between $297.39 per month in Chisago and Isanti Counties and $482.33 per month for the counties in far southeastern Minnesota including Houston, Winona, and Olmsted Counties.

For households making less than 400% of the poverty rate the Affordable Care Act can act as an equalizer, providing tax credits that balance out geographic variation in premiums.⁹ For example, a single person household making $30,000 a year would have a monthly premium of $202 a month after tax credits regardless of whether they lived in Chisago City or Winona.¹⁰ About 42% of people who were insured through MNsure accessed tax credits which  reduced premiums.¹¹ According to the Minnesota Department of Health, 19% of currently uninsured Minnesotans were eligible for federal tax credits.¹²

Health care costs are a major component of family budgets. Last year, a family of four making 400% of the poverty threshold could expect to spend between 17% and 24% of their monthly income on health care premiums depending on where they lived.¹³ This does not include the cost of out of pocket healthcare expenses. While out of pocket expenses for insurance plans are limited, the threshold for a family of four in a silver plan is $14,700 for in-network providers. Services from out of network providers could drive up out of pocket expenses even more.

^{Source: Kaiser Family Foundation and United States Census Bureau}

Minnesota currently has an uninsured rate of 4.4%.¹⁴ The low rate of uninsured relative to the rest of the nation is a testament to the investment in healthcare that Minnesota has made. The fact that 242,509 Minnesotans still lack health insurance is a testament to the work ahead.¹⁵

^{1 http://mn.gov/commerce-stat/pdfs/fact-sheet-small-group-rates.pdf
2 https://edocs.dhs.state.mn.us/lfserver/Public/DHS-3461A-ENG
3 https://www.house.leg.state.mn.us/hrd/pubs/ss/ssmncare.pdf
4 https://edocs.dhs.state.mn.us/lfserver/Public/DHS-4139A-ENG
5 Minnesota Department of Commerce, 2019 Health Insurace Rate Summary, http://mn.gov/commerce-stat/pdfs/rate-release-packet-2019.pdf
6 https://www.revisor.mn.gov/bills/text.php?number=HF5&version=0&session=ls90&session_year=2017&session_number=0&type=ccr&format=pdf
7 http://mn.gov/commerce-stat/pdfs/rate-release-packet-2019.pdf
8 Ibid.
9 https://www.irs.gov/affordable-care-act/individuals-and-families/questions-and-answers-on-the-premium-tax-credit
10 Henry J. Kaiser Family Foundation Health Insurance Marketplace Calculator
11 http://mn.gov/commerce-stat/pdfs/rate-release-packet-2019.pdf
12 http://www.health.state.mn.us/divs/hpsc/hep/publications/mnha2017primfind.pdf
13 https://www.kff.org/interactive/subsidy-calculator/
14 2017 American Community Survey, 1-year estimates, Selected Characteristics of Health Insurance Coverage
15 Ibid.}