Why Not MinnesotaCare for All?
The pros and cons of a state-operated health insurance plan
In recent years health insurance premiums in the individual market in Minnesota have skyrocketed, and some insurers have abandoned the market entirely, particularly outstate. As a solution, Gov. Dayton has proposed allowing anyone who does not have employer-sponsored health insurance, regardless of income, to buy into MinnesotaCare, the state’s low-cost plan for those who make too much to qualify for medical assistance but not enough to pay for private insurance.
MinnesotaCare is currently limited to those making between 133% and 200% of the federal poverty guideline–a maximum of $49,200 this year for a family of four. It covers a comprehensive list of services, including dental, eye exams and mental health treatment. It is paid for with state and federal tax dollars, a 2% tax on healthcare providers, and premiums paid on a sliding scale by enrollees. In 2017 the maximum premium is $80 per month per person.
According to the sponsor of the senate bill which contains the proposal, a MinnesotaCare buy-in would reduce insurance premiums for individuals and provide them with better access to doctors, especially in rural areas where there are often few options for coverage. It would guarantee a quality, lower cost option in every county, and all providers who now accept MinnesotaCare patients would be required to accept the new subscribers. Individuals would pay the premiums in full so there would be no new cost to the state.
At a hearing in the Minnesota Senate, individuals told personal stories of the heavy financial burden of meeting their healthcare needs using available private insurance plans. Other supporters of the buy-in, including the Minnesota Nurses Association, AARP, and the Farmer’s Union, stated that the program would provide an affordable insurance option, broaden provider networks and stabilize the individual market.
Opponents of Dayton’s plan, such as the Minnesota Hospital Association, the Minnesota Medical Association and the Minnesota Chamber of Commerce, cited reimbursement rates that do not cover the costs of care, threatening the viability of rural clinics which already have slim margins, and shift costs to private payers. According to Sen. Michelle Benson, chair of the state Health and Human Services Finance and Policy Committee, hospitals receive full reimbursement from privately insured individuals but less than half for those on public programs. She wonders if outstate hospitals can survive if more patients are on a public plan and fewer on private plans.
To prevent a collapse of the individual market, the Minnesota Legislature this year created a $542 million “reinsurance” program to help insurance companies cover expensive medical claims. Eighty percent of individuals’ claims between $50,000 and $250,000 will be paid by the state. The program appears to have had the desired result of smaller premium increases for 2018.