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Legislative News and Views - Rep. Paul Anderson (R)

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MNsure experiencing problems

Monday, January 13, 2014

By Rep. Paul Anderson

Reports fill the news seemingly every day with revelations about problems with the new insurance exchanges, both at the national level and here in Minnesota. We are one of 15 states with its own online health insurance purchasing system and, although MNsure has been performing better than the national exchange, it, too, has its problems. Among them are issues with processing applications, incorrect program determination and tax credit calculations, problems with the electronic transfer of information to health carriers, the inability to handle paper applications, security concerns, and lengthy call-center wait times.

Aside from those technical issues, I have heard from residents who are seeing their health insurance premiums increase dramatically. They are frustrated and wonder why. I don’t pretend to understand all the factors that go into determining rates, but after visiting with those who work in the industry, a couple of facts seem to stand out. Premiums are based, at least partly, on claims experience, which is a look back at usage in a particular group of insured people. Another factor in determining rates is a projection looking forward at future claims; something called “perceived risk.” If it’s determined that usage is expected to increase, premium rates will be adjusted upward to reflect that.

Under the Affordable Care Act (ACA), no one can be denied coverage because of pre-existing conditions. That is a good feature for those with medical conditions. However, rates will, in all likelihood, be established higher for everyone because of the perceived risk of increased usage for those with pre-existing conditions.

Another factor that concerns me about the viability of the new health insurance system is the low number of younger people signing up for coverage. The latest figures for Minnesota show that, as of January. 4, only 20.4 percent of all enrollees were between the ages of 18 and 35. The federal goal for participation in this segment of the population is 33 percent. The reason that’s significant is because this group, with fewer health concerns because of age, will statistically have less usage than older people. And the rates charged to this younger group are supposed to help defray the higher cost of insuring the rest of the population. If sign-up of this age group remains below forecast, it could greatly affect the price of premiums next year in a negative way.

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I recently attended a conference of legislators from agricultural states, and the topic of one of the sessions dealt with the increased use of drones. Like other technology items, the price of these small model airplane-sized instruments has come down. What cost $25,000 several years ago can now be purchased for under $10,000. Uses for these remote-controlled items are many, and in agriculture they are being used to fly over and take pictures of fields. Using drones will allow fields to be scouted faster and make for quicker, more precise applications of fertilizer or pesticides to remedy problem areas in fields.

On the negative side, privacy issues are huge as the use of these small aircraft increases. We aren’t to the point yet where package delivery will be done with drones, but that’s the talk of the future. It also was pointed out that property owners don’t control the air space above their land. So the issue of banning drones from flying over certain areas is one that has yet to be resolved.

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