Roberta Brown considers herself a member of the “disappearing middle class” — a marketing consultant with a successful small business who nonetheless finds the cost of health care increasingly beyond her reach.
“I don’t know if I could afford it if I had to go out on my own,” said Brown, 57, of Minnetonka. “What is going to become of all of us if we don’t have health insurance?”
Brown is one of 120,000 Minnesotans who rely on MinnesotaCare, the pioneering low-cost health plan created in the early 1990s — a program whose future is now in doubt.
Though it was created with bipartisan support, MinnesotaCare is under fire today from Republican lawmakers, who say it has become obsolete and should be replaced by private insurance. Last year, the Minnesota House voted to scrap the program altogether.
When lawmakers deadlocked over that proposal, the Legislature and DFL Gov. Mark Dayton appointed a task force of 29 health care heavyweights to study MinnesotaCare’s future and other health care challenges facing the state — a group that is now poised to go in quite a different direction.
The task force, which will hold its final meeting Friday in St. Paul, will vote on a proposal to expand MinnesotaCare, adding 41,200 people and raising the eligibility ceiling for incomes to 275 percent of the federal poverty level, up from the current 200 percent.
Advocates say that, despite passage of the Affordable Care Act at the federal level, lower-income Minnesotans still need help to cope with rising premiums and deductibles, which often require consumers to pay thousands of dollars for care before insurance benefits kick in.
“Too many working Minnesota families can’t afford … private health coverage,” said task force member Elizabeth Doyle of TakeAction Minnesota. “This is an opportunity to ensure that working families in the state have access to health care that they can afford.”
It also would help people like the self-employed Brown, whose income can fluctuate above and below the current MinnesotaCare eligibility cap.
Two years ago Brown made too much money to remain in MinnesotaCare, forcing her to buy private insurance on the MNsure health insurance exchange. Her monthly premium shot up nearly fivefold, from $35 to $175 a month, along with a $5,000 deductible.
“Essentially it was catastrophic care,” said Brown. “I’m not going to give up coverage. It is really frustrating and kind of scary because I would like to have health care.”
The proposed expansion would raise MinnesotaCare’s eligibility ceiling, from an income of $23,540 for individuals and $48,500 for a family of four, to about $32,400 for an individual and $66,700 for a family of four.
But the task force deliberations have re-opened a long-running and emotional debate over government intervention in the health care market.
“If you really want to address the affordability gap, there are better ways to do it,” said Peter Nelson of the Center of the American Experiment, who also sits on the task force. “The further you expand MinnesotaCare up the income ladder, the more people you remove from the individual marketplace, which makes the marketplace less stable.”
Nelson favors using state subsidies and tax credits to help low-income households pay premiums and deductibles.
Expansion advocates acknowledge that broadening MinnesotaCare would come with its own set of complications. The proposed enrollment growth would come at the expense of the MNsure health exchange, which could lose up to half of its current enrollment under the proposal. And that could complicate the future of MNsure, which depends for its revenue on a 3.5 percent premium tax on plans bought on the exchange.
The future of MNsure is the other major topic that the task force will wrestle with on Friday. Earlier this week, a task force subcommittee recommended that Minnesota should keep its MNsure marketplace rather than moving to the federal website.
Task force member Sen. Tony Lourey, DFL-Kerrick, favors the MinnesotaCare expansion and thinks MNsure revenue can be maintained by widening the tax base to plans that are sold off the exchange.
“I recommend that we significantly lower the [tax rate] but spread it across the entire individual market, which then would truly ensure that we have the finances needed to fund MNsure operations and continued improvement of MNsure systems.”
Lourey points out that before the Affordable Care Act, MinnesotaCare had always covered Minnesotans with incomes as high as 275 percent of the poverty level. Federal regulations at the time forced Minnesota to reduce the eligibility level, but soon states will be able to make a case to federal regulators to set higher caps.
An analysis commissioned by the task force found that the expansion would cost the state $68 million, but that cost could be completely offset by federal subsidies under a waiver program.
“This is a great opportunity,” Lourey said. “It is pretty difficult to say that this doesn’t look like a good idea. I’m hopeful that it will be well received.”
Going into Friday’s meeting, the task force faces a third challenge to health care finance in Minnesota: A key tax that supports MinnesotaCare is scheduled to expire at the end of 2019.
Unlike Medical Assistance, which serves the poorest segment of the market, MinnesotaCare is not funded through the state’s general fund. Instead, its state revenues come mostly from a dedicated 2 percent tax on health care providers and wholesale drug distributors. For fiscal 2014, 48 percent of the $520 million in MinnesotaCare costs were paid for by the state, 47 percent came from the federal government and 6 percent from enrollee premiums and cost sharing.
Extending the provider tax beyond its expiration date is another proposal that the task force will debate Friday.
Expanding MinnesotaCare and extending the tax would require approval by the Legislature and the federal government, and given that the Republican-controlled House and the DFL-controlled Senate couldn’t agree on a major health care bill last session, it is unclear how the task force recommendations will play out in the 2016 Legislature, which convenes in March.
In a letter to Dayton on Thursday, House Taxes Committee Chairman Greg Davids, R-Preston, signaled opposition to extending the provider tax, calling it a “regressive” and “unnecessary” tax that “is a financial drag on patients seeking affordable options to get well.”
In the meantime, Brown is waiting to hear from the state whether she can keep her MinnesotaCare coverage for 2016. Although she received a letter saying she had been accepted into the program, she received a second one saying that she has to submit tax documents to verify her income eligibility.
“I just sent 10 pages to them,” Brown said. “I am right on the border of being kicked of out MinnesotaCare and into MNsure. I’m now a classic ping pong game. You do qualify. You don’t qualify. Back and forth.”