A recent opinion poll in this paper (Star Tribune/MPR News Minnesota Poll, Oct. 23), and much debate in the recent election, has brought to light the question of public support among consumers for the option to buy into Medicare or MinnesotaCare.
As experts in both representing our clients and educating them on their health insurance options, we know just how complex the system can look to consumers. That is why politicians should not read too much into a simplistic poll question asking whether consumers support the “option” to buy a government-run health plan.
Consumers are obviously interested in having options. We support a strong competitive marketplace for health insurance, and that is just what consumers are getting with some of the recently adopted state reforms, like reinsurance, agricultural co-ops and the repeal of the ban on for-profit HMOs.
Consumers are also always eager to learn more about cheaper products. But we have found they often become less interested in plans that sound good on the surface when the details are explained to them by a professional agent.
The Medicare and MinnesotaCare buy-in plans are just such simplistic options.
Such plans will produce severe cuts to local clinics and hospitals. This is because commercial health plans pay providers substantially more than public programs, which often pay rates that are below the cost of providing the services.
This will not only have a negative impact on the financial viability of the local clinic and hospital but may also force those providers to limit the number of patients they see who are on those programs. You may well have a much more difficult time getting in to see the doctor of your choice.
Providers cannot pay their bills by seeing more patients when the payment does not cover the cost of providing the service. What do they do then? They shift costs onto the rest of us.
The only way the MinnesotaCare Buy-In program can offer lower premiums is because of low payments to providers. Even the Dayton administration understood this when it changed its original proposal for the MinnesotaCare Buy-In from using Medicaid rates to using Medicare rates. This change alone produced a whopping 46 percent increase in projected premiums for this program, and yet they are still underpaying providers for their services. Smaller clinics and hospitals will not be able to absorb these costs.
The impact of this plan will not be more options, but fewer. Once the government steps into the market with a low-priced plan fueled by artificially low payments to providers, don’t expect the other competitors to stay in the market for long.
Once the insurance companies in the individual market exit this area, consumers will be left with just one choice — buying from the government. The small-group market will not be far behind. When small employers find it cheaper to send their employees to MinnesotaCare, there will be little incentive for them to offer coverage, which small groups are not mandated to offer.
The dirty little secret of the MinnesotaCare Buy-In program is that, other than the name, it is not really MinnesotaCare. The deductibles, copays and premiums will all be much higher than the MinnesotaCare program people now know. Consumers will find that to keep the plan price low, the network will soon narrow and the benefit set cut.
It’s the kind of bait-and-switch plan that is illegal in the private sector.
Bob Stein is chair of the legislative committee, and Marie Bell is president, Minnesota Association of Health Underwiters.