For all the heated rhetoric about the Affordable Care Act being a rigid, top-down approach to health care, the 2010 federal health reform law in reality gives states abundant opportunities to innovate, and often the additional funding needed to make it happen.
This fall, Minnesota will launch its homegrown version of the online health insurance marketplaces called for by the landmark law. While passage of the legislation authorizing the state-built exchange dominated headlines this session, lawmakers and Gov. Mark Dayton’s administration weren’t done when it came to custom-fitting the ACA for Minnesota.
The result of their ongoing hard work this year is a lesser-known but even more pioneering and compassionate Minnesota twist on federal health reform: a next-generation MinnesotaCare program that will roll out in January and begin to take advantage of newly available federal dollars to better cover the working poor.
Launched in 1992, MinnesotaCare is one of the state’s signature health reforms, providing subsidized medical coverage to those who make too much to qualify for traditional medical assistance but who struggle to buy quality insurance on their own — often the working poor.
MinnesotaCare had an average of 129,000 monthly enrollees in 2012. It is funded by a state tax on medical providers (48 percent in 2012), federal medical assistance match dollars (44 percent) and sliding-scale premiums paid by enrollees (8 percent).
The program is one of the key reasons that Minnesota has a low uninsured rate. MinnesotaCare has long had bipartisan support because it improves access to preventive care and gets people covered before a medical crisis strikes, helping hold down uncompensated care costs, some of which are passed along to the privately insured.
Twenty-two years after MinnesotaCare’s creation, the ACA will attempt to accomplish the same goal of helping the working poor get affordable care coverage. Next year, the health reform law will make tax credits available to help those who don’t qualify for expanded medical assistance and whose incomes fall within certain guidelines.
Most states do not have a program like MinnesotaCare, so this will be a major step forward. But in Minnesota, it could have been a step backward. Letters signed earlier this year by many Democratic and Republican members of the state’s congressional delegation and its legislative leadership warn federal health officials that a wholesale switch to the exchange would push many MinnesotaCare enrollees into less affordable high-deductible, high-copay plans.
“Families at these income levels are extremely price-sensitive, with little to no discretionary income left after paying for food, housing, transportation and child care,’’ according to a brief from the nonpartisan Minnesota Budget Project on the issue.
Fortunately, the ACA gives states like Minnesota an option to do better, then helps them pay for it. Minnesota lawmakers and the state Department of Human Services aggressively pursued this opportunity.
Thanks to their good work and legislation passed this session, Minnesota is on track to become one of the first states to implement the ACA’s “Basic Health Plan” option. This allows states to utilize 95 percent of the funding for tax subsidies for those whose incomes fall within a range — 138 percent and 200 percent of federal poverty guidelines — to build a better option.
Minnesota is in the enviable position of building on an already-existing option. The new flow of federal funds will strengthen the MinnesotaCare program — bringing down monthly premiums and eliminating an unrealistic $10,000 hospitalization cap while reducing the state’s cost share for providing coverage. After Basic Health Plan dollars begin to flow in 2015, the federal share of the program’s funding is expected to reach about 85 percent.
Gov. Mark Dayton and Human Services Commissioner Lucinda Jesson are also to be commended for pursuing federal funding to help continue and improve MinnesotaCare in 2014 as federal officials take a year longer than expected to roll out Basic Health Plan regulations and funding. The state’s continued investment in the program during this transition will clearly pay dividends in the future for everyone in the health care system by enhancing coverage and controlling uncompensated care.
MinnesotaCare’s launch more than two decades ago made the state a standout when it came to health reform. The current generation of state leaders wisely are building upon this proven program to provide even better care for Minnesotans in years ahead.