Apparently Preferred One Are Also “Tea Partiers” Who Are “Wrong For Minnesota”

Preferred One – the company chosen by about three of five people that were able to actually enroll in MNSure in the past year – is bailing out of Minnesota’s troubled health insurance exchange.

At a news conference Tuesday afternoon, [MNSure CEO Scott] Leitz said he is disappointed with the decision but Minnesotans will still have other options for health insurance through MNsure.

“We level the playing field for consumers. We provide options so Minnesotans can make wise choices,” he said. “We anticipated some bumps along the way, and we’re still seeing some of those bumps.”

He’s half right.  MNSure – like Obamacare – removes actual choice.

But the bumps?  Those are real.

This is a huge hit for MNSure (emphasis added):

As of Aug. 6, Preferred One had 59 percent of the individual market MNsure enrollees. Blue Cross Blue Shield was a distant second at 23 percent, with HealthPartners, Medica and UCare much further back.

Preferred One got such a large share, because they had the lowest rates of the five insurance companies in the program.

And I’m going to hazard a guess that the bulk of Preferred One’s customers were the ones who were getting the lowest subsidies – i.e. the ones that MNSure was counting on to pay the bills for the subsidized, high-risk customers.

It’s possible this could signal big rate increases to be unveiled in early October, and that could have a significant impact on the elections.

“One of the big land mines looking out over the campaign will be when MNsure announces its new rates for health insurance premiums,” University of Minnesota political expert Larry Jacobs said. “If those go up by 10 percent, some have even suggested 15 percent, then that could really shake up this election.”

So let’s get this straight:  because of Democrat/DFL medding in healthcare, you can’t keep your doctor, but your rates will skyrocket. 

Just wanna make sure we’re clear on this. 

Of course, since there are DFLers involved, “clarity” will be hard to come by:

State Rep. Joe Atkins, DFL-Minn., also commented in a statement saying in part, “MNsure is a marketplace where consumers can compare and shop for quality health insurance. It is no different than Target or Cub Foods in that some products will come and go. Preferred One may be leaving, but MNsure still has great products.”

Of course, that’s lunacy.  MNSure would be like “Target or Cub” if the state made it illegal to shop at Aldi, and taxed you extra for shopping at Kowalski’s.

Oh, yeah – and if the state paid low-income people to shop there, maybe:

Anyone who has PreferredOne through MNsure can still directly renew through the company, but they won’t get the government subsidy. To get the subsidy, they will have to choose a different insurance plan starting Nov. 15.

This is what the DFL hath wrought.

RELATED: Big Left squirts tears, blames capitalism, pimps single-payer.

25 thoughts on “Apparently Preferred One Are Also “Tea Partiers” Who Are “Wrong For Minnesota”

  1. Stand back, this is gonna be a big one….

    BAAAAAAAAHAHahahahahahahahahahahahahahahahahaha(coff) hahahaha…Oooooohehehehehehehehhahahahahahahahahahaha!


  2. GMG:

    Translation for PreferredOne’s statement. “MNSURE you can’t keep track of the customers we are getting from the exchange and you’re not collecting what you promised us they will pay. Why the hell should we be part of this money losing thing when money is tight!”

    Walter Hanson
    Minneapolis, MN

  3. Reading between the lines… soiunds like gov’t regulations made the administrative costs too high.
    They didn’t have the profit margins they did on normal business due to gov’t regulators.

    Anytime the gov’t gets involved in something, it screws things up. A bureaucrat/political activitist sitting in an office has no clue how the real world works.

  4. MPR says:

    ‘PreferredOne’s pullout quickly became a political issue Tuesday.
    “Six out of 10 people who’ve purchased insurance through MNsure will now have to go through the nightmare process of purchasing another plan all over again, thanks to Mark Dayton,” said Jeff Johnson, the GOP candidate for governor.
    Minnesotans, he said, are “paying the price for Mark Dayton’s incompetence.’

    Yeah, it “quickly became” a political issue. So quick, we have to go back in time a few years to see exactly where this issue “became” political.

  5. Very interesting that PreferredOne got a 59% market share when southern Minnesota’s dominant medical provider (Mayo) does not accept them.

    And along the same lines, if I am interested in insurance to prevent my bankruptcy in the case of “something really interesting” medically, that’s exactly the provider I want to be covered. So much for the Health Insurance Deform Act improving healthcare.

  6. PreferredOne has specialized as a Third Party Administrator for self-insured groups, most of whom went from insured carriers with structured benefit programs. Their expertise isn’t in designing or managing benefits — they rely upon the employer groups to do that. Surprisingly, their back-room structures were pretty weak as well. My sense was they were always playing catch-up and never got ahead of the curve.
    It’s a great recipe for disaster: high volume of members, a relatively new role, weakly developed infrastructure. When they decided to bail, they realized what many thought: the odds were against them from the get-go.

  7. gmg425 wrote:
    “Translated for liberals, that means MNsure’s regulations will bankrupt their company.”

    PreferredOne is making a business decision. As it turns out, they couldn’t market/sell their product on terms that made their business viable. This is what happens when businesses operate in a capitalist system, and is one of the risks assumed when we turned over health insurance to a competitive market place of private insurers.

  8. Emery, since when did we “turn over” health insurance to a competitive market place of private insurers? All insurance started in the private sector, and the only sustainable insurers remain in the private sector. Let’s not forget for a moment that the unfunded liabilities for Mediscare and Medicaid are at least in the tens of trillions of dollars–some actuarial estimates exceed one hundred trillion dollars. The same thing goes for federally subsidized farm insurance and flood insurance–the loss ratios are completely out of order, generally exceeding 1.

    Honestly, anyone who endorses government involvement in insurance needs to look up the phrase “perverse incentives” and study it earnestly. It really is an issue.

  9. BB: Can we agree that MNsure is an open marketplace, where private insurance companies compete for market share? Is this not a conservative concept? PreferredOne discovered their insured pool didn’t meet the projections/model they had set for themselves. This is what happens in markets. Companies get in and out of businesses all the time.

  10. Emery; we had a private marketplace prior to MNSure, and one where the insurers would actually give you an indication of rates prior to knowing all your personal information and checking your tax records.

    So no, I do not consider it a “conservative” idea, in that genuine conservatives would point out that getting government involved in things that are not truly “public goods” is a recipe for disaster. Like this one.

  11. It’s not the market’s fault that the internal assumptions PreferredOne made turned out to be unsustainable. When you go to the store, it’s not the job of the check-out person to tell you whether or not you’re paying the correct price for a gallon of milk.

  12. Let’s’ not talk about Goobernment regulations that restrict the marketplace in Minnesota to non-profits only. Nah, move along, nothing to see here… Anything to fit EmeryTheUSAHAter’s narrative.

  13. Yes, but it is the fault of the Health Insurance Deform Act for putting a lot of perverse incentives into the system, don’t you think? Sorry, but a great deal of the actuarial difficulty in HIDA-compliant insurance plans is dealing with the fact that HIDA/Obamacare provides a huge incentive for people to delay getting insurance until they’re sick. How do you plan for that with no prior examples of that?

  14. I believe the ACA skirts around the edges of the real problems in healthcare. And therefore is not what real reform will eventually look like.

    In every other advanced economy, there is a monopsony for purchasing health care. This does not require there to be a single payer, as is the case with the NHS. Germany and Switzerland have hundreds of health care organizations. But the health care payers are allowed (and required) to gather together as a cartel to set the rates of payment for treatments after negotiating with doctors and hospitals. Because of the complications and distortions of the health care marketplace, a monopsony is the only effective way to force doctors and hospitals to reduce costs and increase efficiencies.

    You have to be willing to use your monopsony to pay the doctors, pharmaceutical companies, and hospitals a lot less. The trick is to not just screw them with your monopsony power, but encourage them to become more efficient by paying higher margins on efficient courses of treatment than inefficient ones.

    You could also allow health care organizations to offer health plans which do not cover treatments costing more than a given dollar figure per Quality-adjusted life year (QALY), and watch the suddenly mature Americans opt for the cheaper plan.

    Collectively, all crowds are immature, unreasonable, and inclined to mood swings. Individually, people can be surprisingly analytical when it comes to their own money. Republicans will view death panels differently if it is the path to offering more choice.

  15. EmeryTheUSAHater, it is obvious from your monopsony arguement that you have no idea how healthcare insurance works in this country regarding their payments to doctors. None. You obviously cribbed your unattritbuted drivel to prove a point you do not even know you made. My wife lives with the reality of dealing with health insurance reimbursement to doctors every day and I do the books for her office, so in my expert opinion, you are full of shit, as usual.

  16. Emery, didn’t we have a 70 year experiment with monopsony called the “Soviet Union”? Aren’t the results of that system enough to realize that we don’t want it here, in any form, in any industry?

    If you’re unclear on the concept, you need to read von Mises and Hayek on the impossibility of rational calculation in a single buyer system. For that matter, I believe JPA experienced it firsthand for his youth–and for that matter, what I saw in a day in East Berlin in 1989 was enough to dissuade me from any ideas that the government could efficiently organize markets.

    The path out of our current morass in health insurance is to (a) separate insurance from employment so employees need not fear losing insurance in a RIF and (b) create incentives to have real insurance–coverage for unexpected expenses–instead of our comprehensive coverage that provides little incentive to do what it takes to reduce medical expenses.

  17. “Collectively, all crowds are immature, unreasonable, and inclined to mood swings.” This guy has a lot to answer for then… “The Wisdom of Crowds” by James Surowiecki (Anchor; Reprint edition (August 16, 2005). It’s unfortunate, Emery, that you could not stop at – “PreferredOne is making a business decision”.
    Yes they are. They have determined that MnSure – due to the unique way the Dayton Administration established and executed it in response to Obamacare rules and incentives (which were repeatedly changed – with some concluding the changes are unconstitutional) is too unstable to provide a predictable forecast of resource use. If this were a business-to-business transaction, it is likely the MnSure if not individuals (like April Todd-Malmlov) could be charged with fraud or certainly failure to perform to contract. I’m not privy to the contract particulars and it may have allowed the state to do whatever they wanted without penalty. This happens. (Aside: Todd-Malmlov just got a nice new job in DC – goes to show what you have often complained about here, Emery – the people who play the game are the ones who get promoted regardless of talent or actual accomplishment.)
    Neither this state nor this country (does “every other advanced economy” mean half of the advanced economies or all the other advanced economies – you’ve claimed to be a superior writer, I’m surprised at this usage) has a “market” for health insurance anymore than a city has a “market” for taxi cabs (just ask Lyft or Uber). All monopsony talk aside – there is no “market” when a centralized authority dictates price for service. If anything, crowds are excellent at using the mechanism of price to determine resource allocation and it’s the individual (particularly centralized authorities) who fares poorly due to emotion and lack of knowledge. Just go into an area after a hurricane has passed through – Wal-Mart is on the ground and rolling long before FEMA has had their first meeting on how they plan to respond.

  18. “Can we agree that MNsure is an open marketplace, where private insurance companies compete for market share?”

    Not really. It’s a portal where government-approved providers can offer goverment-approved products that meet government-set standards. It’s a bit like getting cable tv in St. Paul: the government has chosen your provider and your channels, your only option is whether to add ESPN or HBO.

    There’s nothing free-market about MnSure.

  19. Now the question is this; will the new rates be announced prior to the elections? Or will a little bit of pressure prevent that?

    And for what it’s worth, I realized this is an “own goal hat trick”. Not only do you lose your doctor and have your insurance rates skyrocket, but you’re also not going to be able to get care at the best hospitals. And if you’re “really lucky”, you can end up like the girl with croup in England whose doctors failed three times to realize that she needed to be hospitalized–and sadly she died. They prescribed penicillin for what Mayo describes as most often a viral infection.

    Heckuva job, monopsony. And to no one’s surprise, what appears to be a clear case of malpractice by U.S. standards is being brushed under the table by some functionaries who earned their job on vacation in Costa Rica, so to speak.

  20. Preferred’s market share was larger than that of their four competitors (Medica, BCBS, Health Partners and UCare) who by the way, are still doing business in MNsure . That being said, it’s hard to single out the market place as the source of Preferred’s problems.

  21. “Did you run out of “Chanting Points”?” – As always, Emery: Heh!
    Non-responsive. As usual.
    Oh by the way – looks like there is hope for you as an operative with the Wisconsin Democratic Party or at least on the staff of “The New Republic”:
    I KNEW your mad skillz at cutting & pasting others work without attribution would be come in handy – and boy does Mary Burke need you now! Looks like a full time job so I’ll not comment on this thread again allowing you to get in (yet another) devastating riposte and having the last comment in the thread therefore WINNING!* this comment thread.
    Then it’s off to ‘Sconnie, young man. Bring back some Kringle and some Nueske’s Bacon, for me would you please?
    *Sheen, Charlie – 2011.

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