One of the most pressing issues before the Minnesota Legislature is deciding whether to extend the state’s expiring “reinsurance” program, which has delivered price relief to consumers under age 65 who buy insurance on their own instead of getting it through employers.
The troubling results of new number crunching by respected University of Minnesota researchers ought to factor into the coming debate in St. Paul. The federal government has helped pay for the reinsurance program but recently delivered an unwelcome surprise to state officials: The amount of aid projected for 2019 had suddenly been reduced from $184 million to $85 million. The U’s data heighten concerns about this drastic drop and cast further doubts on whether the Trump administration is a dependable partner for future state-based health care innovation.
The State Health Access Data Assistance Center (SHADAC), which is affiliated with the U’s School of Public Health, compared Minnesota’s federal aid to six other states that had received funding for similar reinsurance programs. Minnesota, unfortunately, is an outlier and not in a good way.
Four of the states will receive considerably more federal dollars than originally projected for 2019. Maryland leads the pack with 123 percent, and Oregon isn’t far behind with 117 percent. Alaska will receive 112 percent, and Maine has been approved for 110 percent.
Besides Minnesota, there are two other states that will get less federal aid than anticipated. But the approved dollars are far closer than Minnesota’s to the original estimate. New Jersey will get $180 million, or 83 percent of the $218 million estimated. Wisconsin comes in at 77 percent of estimated aid, getting $128 million of the $166 million.
Minnesota’s 46 percent of projected aid looks especially dismal in comparison.
The situation drew the ire of Minnesota’s congressional delegation even before SHADAC did the calculations. In a sharply worded Dec. 9 letter spearheaded by Sen. Amy Klobuchar, the state’s two senators and several members of its House delegation demanded answers from the Centers for Medicare and Medicaid Services (CMS), which oversees reinsurance funding.
“A sudden notification that CMS would be reducing federal funding by roughly $100 million just one month before the 2019 plan year has created significant uncertainty for our state, and to date CMS has offered no explanation for why this dramatic reduction in funding has occurred,” the letter stated. The bipartisan signatories: Klobuchar, Sen. Tina Smith and House Reps. Collin Peterson, Betty McCollum, Tom Emmer and departing Rep. Rick Nolan.
The letter also outlined smart questions about the methodology used by CMS and urged officials to provide a sum closer to the original estimate of $184 million. The Editorial Board endorses that reasonable request. The $99 million is a significant shortfall. Legislators had authorized up to $542 million in spending on the two-year reinsurance program when it passed in 2017.
That Minnesota took such a significant hit when other states fared so much better also suggests something went haywire with CMS calculations. Federal officials need to delve into this and, in the meantime, make Minnesota whole while they figure out the problem.
Klobuchar’s office has yet to get a formal response from CMS. Minnesota legislators are back in St. Paul on Jan. 8, and whether to extend the reinsurance program is a decision that must be made this session. Answers are needed about the disturbing drop in federal aid. CMS Administrator Seema Verma also needs to reassure states that they can rely on her and the agency as they weigh reinsurance and other innovations to make health care affordable.