Minnesota's pioneering health insurance program for lower-income residents, MinnesotaCare, would be expanded to a much broader swath of the population under two DFL proposals introduced last week in the House.
The proposals, known as MinnesotaCare buy-in, would leverage the purchasing power of government health programs to offer coverage with lower premiums and out-of-pocket costs than commercial insurance in the private market for Minnesotans who make more than the program's current income limits.
Sometimes called a public option, the concept has been popular with Democrats eager to reduce the number of uninsured Americans and give consumers an alternative to private health coverage. Buy-ins are being considered in several states, including New Mexico, Colorado and Washington. In 2017, Nevada passed a buy-in, but it was vetoed by that state's governor.
The idea is not new to Minnesota. Former Gov. Mark Dayton made it a legislative priority last session, and two years ago the Minnesota Senate, with a lone Republican supporter, nearly passed it as an amendment to another health care bill.
The plan could gain new traction this year, with a DFL majority in the House and support from DFL Gov. Tim Walz, who frequently mentioned it on the campaign trail.
"One thing we hear consistently from Minnesotans as we travel the state is they want a buy-in option," Walz said in a statement to the Star Tribune. "This is the beginning of a process to make sure Minnesotans have access to a public option and affordable, high quality health care."
Still, it faces an uphill battle in the Republican-controlled Senate, with Majority Leader Paul Gazelka calling it a "solution that will bring us to disaster."
The idea is to use the skeleton of a government health insurance program, which pays lower reimbursement rates to hospitals, doctors and other providers, to reduce overall costs. That could translate into premiums that are below those offered by private insurers.
But advocates have different visions of the design — and the scope — of a buy-in option. It could be open to all residents, or, to avoid destabilizing the commercial insurance market, it could be limited to areas of the state where private insurance is struggling.
"I have always advocated for a targeted focus buy-in so you don't screw up the market completely," said Lynn Blewett, a professor at the University of Minnesota School of Public Health. "Maybe even do a pilot to get it started and see how it works."
The buy-in product could be offered on the MNsure state insurance exchange, taking advantage of federal premium subsidies and avoiding the need to tap state tax dollars. That option, however, would need federal approval.
"I don't think the federal government is going to go for that," said Blewett. "They have signaled that they want private sector options."
Small business owner Dan Marshall says a MinnesotaCare buy-in would provide him with an affordable and stable source of health coverage.
"Honestly there's nothing that raises our blood pressure more than dealing with health insurance," said Marshall, owner of the Mischief Toy Store in St. Paul. "I've been doing it for 20 years, and it is the most stressful thing that we deal with."
Because small-business income can fluctuate from year to year, the Marshall family has shifted back and forth between MinnesotaCare, which they currently use, and private insurance from the MNsure exchange, where premiums are much higher.
"It seems like it is time for Minnesota to step up and make a real answer that works better than the exchanges," he said.
The same problems are felt by many of the state's farmers, who often have fewer options available to them on the exchange in rural counties.
Farm families can face annual medical spending as high as $45,000 once they've paid premiums and high deductibles, said Gary Wertish, president of the Minnesota Farmers Union.
"That is just not sustainable when you have trouble paying the bills," Wertish said. The buy-in "would allow the farmer or anybody … to be able to take advantage of the state's buying pool and get better rates."
But because those lower rates would be achieved by paying providers less, many trade groups, including the Minnesota Hospital Association, have said a buy-in could further weaken hospital finances, especially in rural areas.
Large employers are concerned that their costs would go up because hospitals and clinics could raise prices to offset lower-revenue patients.
Rep. Tina Liebling, DFL-Rochester and author of one of the buy-in bills, acknowledged the concerns. She noted that in her proposal the state would contract directly with providers instead of using managed-care plans as the middleman, as is currently done in MinnesotaCare.
"We would probably pay better rates across the board … paying in a way that makes sure that hospitals don't go under," she said.
Liebling said the buy-in should be open to all Minnesotans, even if it draws enrollees away from private insurers serving the individual market.
She noted that the individual commercial market was not sustainable to begin with, which is why the Legislature appropriated $500 million to help lower premiums under a reinsurance program.
The future of the reinsurance program, which is up for renewal or replacement, will also be a pressing issue at the Legislature.
Republican Sen. Scott Jensen, a physician from Chaska, said the Legislature should have a "robust discussion" about the buy-in proposal, but he also expressed concerns.
"I think it has the potential to undermine our commercial insurance market," he said.
Jensen was the only Republican to vote for the buy-in as an amendment to the reinsurance bill in 2017. With one DFLer absent, the vote failed to proceed on a 33-33 tie.
Jensen said he favored the proposal back then because it was limited to a few areas of the state that were in crisis.
"Right now I don't think that exists," he said. "I don't see that being a compelling argument at this point in time."