What happens when an insurer with the bulk of a state's public exchange membership pulls out?

Consumers, insurers, providers and regulators are about to find out in Minnesota.

PreferredOne, a health plan jointly owned by Fairview Health Services, North Memorial Health Care and PreferredOne Physician Associates, is not going to be selling plans for a second year in MNsure, amid financial concerns with the state exchange.

“PreferredOne made the decision to not offer health plans through the health insurance exchange in 2015,” said PreferredOne CEO Marcus Merz and MNsure CEO Scott Leitz, in a joint statement. “Simply put, both organizations understand that MNsure is still an evolving partnership. This decision impacts 2015 enrollment.”

Technically, Minnesotans who enrolled in a PreferredOne exchange plan will be able to keep it — but not at the price they’re paying now and not with a tax credit subsidy, which is available only via an exchange.
PreferredOne garnered the most enrollees — 59 percent of the individual exchange membership — in part through the lowest premiums. When PreferredOne withdraws, there will still be four other insurers for residents to choose from: Blue Cross and Blue Shield of Minnesota, Medica, Health Partners and Ucare.

One competitor bowing out may be a big opportunity for the rest of the insurers, although they still have to contend with the same problems at the exchange, such as plan fees and technology struggles.
The exchange membership is just a small part of PreferredOne’s overall client base, but the insurer will have to devote a fair amount of administrative work to the process of withdrawal and it could also face public perceptions problems in the future.

While their coverage continues through the end of the year, PreferredOne said exchange members will receive information from MNsure in early October detailing their next steps.

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