FEDERATED
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121 East Park Square. P.O. Box 328. Owatonna, MN 55060
(507) 455-5 200. (800) 533-0472
May 4, 2015
Anne Krohmer Project Coordinator MN Department of Health Anne.Krohmer@state .mn.us This responds to the MOH RFI on State-based Risk Adjustment Feasibility Assessment on behalf of Federated Mutual Insurance Company (Federated) . Federated, located in Owatonna, MN, has been providing group health insurance to small business in Minnesota for over 50 years. Federated also writes group health coverage in 22 other states. Federated does not offer individual coverage other than required conversion coverage for those losing group coverage. Federated opposes the development of state-based risk adjustment for the following reasons.
• Federated has already invested considerable resources to develop the ability to do required
federal reporting for risk adjustment. This includes internal time and effort to prepare the data
in the ways required for the federal reporting system in addition to purchasing, setting up and
provisioning the servers required for that system. Changing internal systems and processes to
accommodate a new and separate Minnesota program would increase expense in a time when
the stated goal of the Affordable Care Act is to decrease the amount of money insurers spend
on overhead .
• Federated operates in multiple states across the nation . If Minnesota creates their own
program we would be required to maintain multiple risk adjustment programs . Again this would
increase expense with nothing gained by consumers other than increased premiums to cover
those costs.
• Development of a Minnesota only program when a federal program already exists to do the
same task would mean spending additional tax dollars for state research and implementation to
re-create a duplicate system. It would seem to make more sense to spend limited tax dollars on
improvements to the MNsure system that do not duplicate existing federal systems. Creating a
Minnesota only risk adjustment system threatens to raise consumer costs and issuer expense .
Thank you for this oppo rtunity to comment on this issue . Please let me know if you have any additional
questions regarding Federated's position on this matter. I can be reached at [email protected]
or 507-455-5416.
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Jeanne Hankerson 1 st VP - Director of Compliance Federated Mutual Insurance Company Federated Mutual Insurance Company • Federated Life Insurance Company • Federated Service Insurance Company
Home Office : Owatonna, Minnesota 55060 • www.federatedinsurance.com