REGIONAL— The letter from Preferred One arrived in the mail Monday, and it ruined Randy Pratt’s whole day.

“It was definitely sticker shock,” said Pratt, who lives in Tower, where he co-manages the Hoodoo Point Campground.

The letter from the health insurance provider announced an eye-popping rate increase— essentially double from what he had paid last year. Other St. Louis County residents received similar letters Monday, as the Golden Valley-based insurer worked to quickly shed the high-cost pool of customers it had signed up last year through the state’s new health care insurance exchange, known as MNsure. The company announced in September that it would not be participating in the exchange this year and its massive rate increase is virtually guaranteed to force those who signed up through MNsure last year to look elsewhere for coverage.

Aaron Undeland, an insurance broker with Range Reliable in Virginia, said that’s likely Preferred One’s intent. “They just got hammered this year,” said Undeland, who noted that the company debuted on the MNsure exchange with the lowest cost plan and one of the best networks of providers. “I sold a ton of their plans,” said Undeland, who serves as an assister with the MNsure program.

Yet many of those who took advantage of Preferred One’s insurance offerings were people who had unusually high medical costs. A significant number came from the state’s high-risk insurance pool, which was the insurer of last resort for thousands of Minnesotans who had previously been uninsurable due to substantial medical needs. At the same time, many others had come from the ranks of the previously uninsured, and many of those had chronic, untreated health conditions because of their lack of insurance. With new coverage finally in hand, they quickly racked up whopping medical bills, leaving Preferred One to pay for it all.

Much of this was anticipated, but Undeland said Preferred One erred by coming into the exchange in the first year with such an attractive plan. That meant they picked the lion’s share (approximately 60 percent) of the new customers that signed up for private health coverage through MNsure, but also the lion’s share of the high-risk cases. By announcing a huge rate increase (an average of 69 percent statewide, but even higher in St. Louis County), Preferred One is essentially dumping the client base it signed up through MNsure last year.

Undeland said that decision has upset plenty of people, and left his phone ringing off the hook with customers asking where to go for affordable coverage for 2015.

For many St. Louis County residents, it now means going through the application process with MNsure once again. Pratt said there’s no way he can afford the new rates being offered by Preferred One and he expects to reapply through MNsure once the open enrollment period begins on Nov. 15.

While Pratt didn’t qualify for a premium support tax credit last year, that could change this time around, according to MNsure spokesperson Jenni Bowring-McDonough. Because premiums have increased this year (between 10 and 25 percent on average), so have the income guidelines for qualifying for premium assistance. This year, a single person earning as much as $46,680 could qualify for assistance, while a family of four could make up to $95,000 and still receive some level of premium support. “That means more Minnesotans will qualify for financial assistance,” said Bowring-McDonough.

But to qualify for assistance, people will have to purchase insurance through the MNsure exchange. In such cases, Bowring-McDonough recommends that people go through the application process again, so they can enter their latest financial information— particularly if they think they might qualify for assistance this year.

While Preferred One won’t be an option through the MNsure exchange this year, Bowring-McDonough said a number of new plans will be offered this year, which should expand consumer choice. According to Undeland, Blue Cross-Blue Shield and Health Partners will each be offering eight plans this year for St. Louis County residents, a significant jump from the number of options available last year.

While the MNsure website suffered a laundry list of problems during its launch last year, Bowring-McDonough said the site is working much faster now and shouldn’t present the same number of errors as users experienced last year. “We also have more customer service in place, even well before the open enrollment period,” she said.

And for people who are reluctant to try navigating an online application process, Bowring-McDonough recommends sitting down with one of the hundreds of MNsure assisters around the state. “By sitting down with someone who can walk you right through it, you can simplify the process a lot,” said Bowring-McDonough. “The process is free.”