Financial trends in health insurance

As health insurance open enrollment season will soon be upon us, there’s a lot of news and activity in the health insurance marketplace to consider. If you’re a consumer or a business owner, it’s important to be aware of a few key shifts happening around us and to understand what those shifts could mean for your own bottom line.

Let’s start with the good news: The Minnesota health marketplace is finally stable. However, that does not necessarily mean that it is inexpensive for all involved. The Minnesota Department of Commerce recently released information from the major health insurance carriers that covers anticipated changes in the cost of premiums for the 2020 plan year. Take the following examples:

  • Minnesota consumers who are under 65 and not covered by an employer plan will see an increase or decrease between -1.35% and 4.8% on premiums for 2020 as proposed by the carriers.
  • Small employer health plans (for companies of two to 50 employees) will see between a 1.94% to 8.87% increase in 2020. Employers are looking for ways to trim the premium costs as rates get higher and higher. Some employers are going to very small controlled networks with fewer providers, which will help to trim costs. They are also changing to plans with higher out-of-pocket expenses, which pass the expense onto the employees.
  • Employers are not the only ones trying to be innovative – the insurance companies themselves are trying new tactics. For example, Blue Cross of Minnesota has removed the gym benefit for its group plans and replaced it with the new Sharecare program. Under the new program, you don’t need to go to the gym to receive benefits. Instead, you earn points for the number of steps you take in a day or other activities that you might do such as gardening or bike riding. If you reach 10,000 steps or equivalent of steps 21 of 30 days in a month, you get a gift card.

In addition to anticipated changes in premium rates and changes to insurance benefit programs locally, there are several other trends that everyone should be paying attention to right now.

  • The first one is all of the mergers, investments, and partnerships being made. A few examples:
    • Blue Cross of Minnesota just purchased 49% of the North Memorial Health Clinics.
    • CVS has purchased the Aetna insurance company, a $70 billion merger.
    • CVS will also be opening 1,500 Health Hubs in its stores and pledges to be the driving force for change in the health care system.
    • Fairview is opening a health clinic at the Mall of America under the M Health Fairview brand in November.
    • UnitedHealth Group and Optum are continually purchasing doctor practices, outpatient clinics, surgery centers, urgent care facilities, and hospitals throughout the United States.
    • Optum’s newest adventure is to take on non-clinical operations for local health systems.

Aside from being interesting business moves, these shifts are good to be aware of as consumers. Who owns or operates your local clinic? Which company is your bill coming from? Are these mergers or partnerships changing how you receive health care – and how you or your insurance are charged for it?

  • The next big wave of change will be value-based care, which measures patient outcomes and quality not the quantity of visits, as well as telemedicine, which will give busy consumers convenience, choice, and speed. There will be more innovations to come.
  • Medicare Advantage plans are on the move in Minnesota and nationally. These private health plans replace Medicare benefits for people who enroll in them. These coverages can include transportation to and from appointments via Uber or Lyft, dental, vision, hearing, and other wellness programs for a very low monthly premium. There will be multiple zero-dollar premium plans available for 2020 throughout the United States. UnitedHealth Group’s Medicare Advantage Enrollment jumped 10% for 2019. Medicare Advantage plan enrollment is projected to reach 70% between 2030 and 2040 as stated in the recent L.E.K. consulting report. In 2019, approximately 30% of people are enrolled in Medicare Advantage plans.

In summary, there are currently a lot of changes taking place, and there will likely be many more in the upcoming years. When we think about our goals and long-term financial plan, any change in health care costs will have an impact on the rest of the financial picture. The question that we should all be asking is, “Do we want our 401(k) and IRA retirement plans to keep growing, or do we want lower, affordable health insurance?” While the answer may not be a clear-cut or immediate one, in the meantime, don’t hesitate to talk with your financial advisor and health insurance advisor regarding your personal costs, your business costs (if you’re an employer), and what plans you may want to put in place now to safeguard your finances amidst always-changing health care costs.

The above was developed in collaboration with one of JNBA Financial Advisors’ strategic partners, Ted Botten. Ted is the owner of the Ted Botten Agency, a health insurance advisor that helps individuals and employers identify the right health insurance for their needs and situations. We asked Ted to provide his insights on the Minnesota health insurance marketplace, especially the recent news and trends that our clients may want to pay attention to before open enrollment this fall.


Please note: All services provided by the Ted Botten Agency are separate and independent of JNBA Financial Advisors, Inc. JNBA providing a professional referral could present a conflict of interest because the professional may, on occasion, make a referral to JNBA which could result in an economic benefit despite the lack of any revenue sharing agreement in place. You are not obligated to engage the services of any such JNBA recommended professional, and the firm’s Chief Compliance Officer, Kimberlee M. Brown, remains available to answer any questions that you may have.

JNBA is not an insurance agent and no portion of the above should be construed as insurance advice. All insurance issues should be addressed with the insurance professional of your choosing. JNBA nor its employees sell insurance products.

Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, Inc.

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