Obamacare Dropout: MN Insurer Hit by Money Woes

The top insurance company in Minnesota's Obamacare state health exchange is dropping out.

PreferredOne Health Insurance grabbed 59 percent of all private-plan enrollees by offering low premiums during Obamacare sign-ups last year.

Now company spokesman Steve Peterson said PreferredOne's participation in the state exchange, called MNsure, is "not administratively and financially sustainable."

The company said it just costs too much to keep up with all the extra administrative work from government-run health care.

"This is undoubtedly what happens when we depend on the government for health care coverage - we lose it," Twila Brase, president and co-founder of Citizens' Council for Health Freedom, said.

The pullout likely means higher rates for consumers in that state next year.

Republicans called it the latest sign of systemic problems in MNsure.

"Minnesotans are now faced with fewer healthcare choices, some will lose their plans for a second time, and families will be hurt," state Sen. Michelle Benson (R) said.

PreferredOne customers can keep their current plans, but their premiums could be higher next year. And customers who get tax credits to defray the costs will need to switch carriers in order to keep them.

"PreferredOne has now discovered that Obamacare is broken and can't possibly work, even with the $25 billion reinsurance scheme to redistribute dollars between health plans that was put in place to keep premium prices low until enrollment for 2017, conveniently after the 2016 presidential election," Brase said.

Despite a launch last year marred by technical problems and long call center waits, Minnesota's Democratic Gov. Mark Dayton's administration has called MNsure a success because it helped reduce the ranks of uninsured Minnesotans.