Health plans want a delay in releasing final 2018 individual market premiums due to uncertainty about federal funding for the state's MinnesotaCare insurance program, but Gov. Mark Dayton on Tuesday called the idea "extremely irresponsible."
Regulators are scheduled to release final rates Oct. 2 for the roughly 170,000 state residents who buy coverage for themselves.
This summer, carriers proposed two sets of rates depending on whether the state implements a reinsurance program that would lower premiums by 20 percent from where they otherwise might fall.
Dayton on Friday said the program would go forward because the federal government issued an approval letter, but insurers said it's not a done deal until the governor actually signs the agreement. Dayton has 30 days to do so, with state and federal officials still negotiating details about how the new program would affect funding for MinnesotaCare.
"Without further, comprehensive agreement on the waiver [for reinsurance], any rate announcement will be speculative," wrote Jim Schowalter, chief executive of the Minnesota Council of Health Plans, a trade group for insurers, in a letter to Commerce Commissioner Mike Rothman.
The individual market primarily serves people under age 65 who are self-employed or don't get coverage from their employer. MinnesotaCare is a state public program that covers a group of state residents sometimes described as the "working poor."
The individual market has undergone significant change since 2014 with the federal Affordable Care Act (ACA), including the launch of the state's MNsure exchange as an optional venue for people to buy coverage.
"It is extremely irresponsible for health insurers to disrupt MNsure's upcoming open enrollment period, which many Minnesotans will use to buy health insurance coverage for themselves and their families," Dayton said in a statement Tuesday. "They deserve the security of knowing that more affordable health insurance rates will be available to them and their loved ones in 2018, without confusion or delay."
He added: "We must proceed immediately and efficiently — and we are doing so."
Dayton pointed out that state law requires the release of 2018 rates by Oct. 2. Insurers say other states have delayed releases due to ACA uncertainties.
With reinsurance, the state of Minnesota would provide a financial backstop to health plans that happen to attract subscribers with expensive health problems. The assurance lets health plans reduce premium prices for subscribers.
The program is contingent on federal approval of an application to waive certain legal requirements that otherwise would effectively transfer state subsidies to the federal government. That's because the federal government under the ACA provides tax credits to many who buy individual market coverage based on the market price — so lower premiums would mean less tax credit money for Minnesotans without the waiver.
MinnesotaCare is affected because people covered by the program otherwise would likely buy individual policies through MNsure with large federal tax credits. So, as part of the ACA, the state transformed MinnesotaCare into what's known as a "Basic Health Plan," which lets the state take the value of those foregone federal subsidies and use the money to fund the program.
Part of the state's waiver application to create the reinsurance program asked the federal government to "hold harmless" MinnesotaCare funding, which would go down if the market price of coverage goes down.
Last week, Dayton blasted federal officials saying the state had been assured several times that MinnesotaCare funding wouldn't be hurt as part of an approval for the reinsurance program. But the final details showed a reduction in funds.
"I have expressed my strong opposition to the federal government's proposed cuts to MinnesotaCare, upon which 100,000 Minnesotans depend for quality, affordable health coverage," Dayton said in his Tuesday statement. "That issue remains unresolved with our federal partners, and my Administration will continue our fight to preserve full federal funding for this program."
Dayton asked for support from insurers and others "to help make the strongest possible case for [the federal government] to honor its commitment to hold Basic Health Plan funding harmless, when approving Minnesota's reinsurance waiver."