Private Health Insurance in Minnesota Increased 7% in 2022

November 30, 2023

A report from MN Community Measurement (MNCM) released on November 30 finds that the cost of healthcare services for Minnesotans with private health insurance increased by 7% in 2022.  

The report highlights cost and utilization trends by type of healthcare service, as well as variation by region within Minnesota and by medical group. The report, Health Care Cost & Utilization in 2022, analyzes data for about 1.2 million people with private health insurance and nearly $10 billion in healthcare spending in 2022.  

Key findings in the report include: 

• Statewide, the total cost of care (TCOC) for people with private insurance increased by 7% per person in 2022. Growth in 2022 was slower than the 12.5 % experienced in 2021, much of which likely represented “catch-up” back to normal levels of service utilization following pandemic declines. The most recent 3-year average growth rate was 5.5%, which was higher than the average annual growth of 4.9% from 2014 to 2019. 

• Costs grew fastest in 2022 for prescription drugs (17.1% per person). The slowest rate of growth was for inpatient hospital services, which increased by 0.4%. Costs for outpatient hospital services and professional services grew by 8.3% and 4.3%, respectively. 

• Costs per person with private insurance vary substantially by region of the state. The lowest cost region in 2022 was St. Cloud, with costs 8.8% below the state average due primarily to lower use of services, but also lower prices. The highest cost region was Rochester, with costs 37.4% above the state average, due to higher prices. The regional analysis is based on where patients live, not where they receive services. 

• For most service types, utilization continued to rebound in 2022 from declines experienced during the COVID-19 pandemic. Among service categories analyzed for this report, outpatient surgery had the largest increase at 8%. 

• One exception to the trend of increased utilization was inpatient hospital admissions, which showed a 4.3% decline in 2022. Inpatient hospital admissions are the only category of service included in the report, with utilization that remains below pre-pandemic (2019) rates for patients with private health insurance. 

• The report also sheds light on variation in prices for individual services. For example, in 2022 the cost for a chest x-ray ranged from $49 to $348, depending on where the service took place. The prices paid by private health insurance are substantially higher than other insurance types. For example, in 2022, private health insurers paid just over double Medicare reimbursement rates for a basket of comparable services that has been tracked over time by MNCM. The gap between private insurance and Medicare rates has been increasing over time. 

The report is based on analysis of claims data for 2022 from Blue Cross and Blue Shield of Minnesota, HealthPartners, Medica, and Preferred One. The analysis used the nationally endorsed Total Cost of Care methodology developed by HealthPartners. Patients are attributed to medical groups based on where they receive the majority of primary care services. For analysis at the regional and medical groups levels, the data are risk-adjusted and high-cost outliers are truncated. More details on the methodology are available in the report.