It's usually a welcome development when political leaders find common ground. But there are exceptions, and the willingness of Gov. Mark Dayton and Minnesota Republican legislative leaders to hastily implement a lousy deal from the U.S. Department of Health and Human Services (HHS) is one.
The issue involves federal funding for two state-run programs that will help around 200,000 Minnesotans access coverage. One, known as the "reinsurance" program, will reduce premiums by 20 percent for those who buy private health insurance on the individual market in 2018 and 2019. The other program is MinnesotaCare, which has long covered working families who make too much for Medical Assistance but still struggle to buy private health insurance.
State lawmakers approved the reinsurance program earlier this year but sought sizable federal funding for it, which required HHS to grant a waiver. Last week, after months of foot dragging, the sprawling agency finally approved it. But the troubling terms HHS attached led the Star Tribune Editorial Board last week to ask whether the agency was offering a devil's bargain.
Details since then have done little to allay these concerns. HHS will provide $323 million over two years for the reinsurance program, a sum that has been revised upward by federal officials. But if Minnesota accepts, the agency will also reduce federal dollars for MinnesotaCare over a similar time frame by $369 million. The hit won't disrupt program coverage but will draw down its reserves when there are other threats to its federal funding stream.
The reason the two programs' funding is intertwined is complicated, but reducing insurance costs on the individual health insurance market reduces federal aid for MinnesotaCare, a program that has become increasingly reliant on these dollars. The net loss to the state is $46 million — a financial hit that should be avoided.
Dayton and Republican lawmakers, who are at loggerheads over numerous issues, nevertheless have arrived separately at the same conclusion: The state must quickly accept the reinsurance dollars while it fights to restore full MinnesotaCare funding. But recouping those dollars is unlikely. Nicholas Bagley, a respected University of Michigan law professor, said Dayton can disagree with the waiver terms but "he can't reject the changes and still get the money that he wants."
Dayton and the GOP should instead explore other options more fully to ensure the best deal for the state. HHS officials said Minnesota has 30 days from when the waiver was granted to accept or reject it. Could the state, for example, reject the waiver and choose to continue a different short-term relief program it already launched to help consumers buy 2017 coverage?
That would preserve the MinnesotaCare dollars while still aiding those struggling with insurance rate hikes in coming years. The 2017 premiums subsidy program is projected to cost under $200 million despite initial estimates of $312 million. Therefore, continuing it instead of implementing the reinsurance program could be a less costly option that would keep MinnesotaCare federal funding intact.
Dayton and Republican leaders contend that state law prevents them from rejecting the waiver, but they haven't adequately explained how they reached that conclusion. It's worth noting that there are differences of opinion on that from legislators, such as state Rep. Tina Liebling, DFL-Rochester, who is an attorney and gubernatorial candidate.
Pursuing alternatives may require a special session of the Legislature. The start of open enrollment on Nov. 1 also looms, giving the state little room to maneuver. The punishing last-minute decision by HHS has put Minnesota in a terrible spot. But a state long known as a health care leader should at least try to innovate its way out.