Last year more than 101,000 Minnesotans relied on MinnesotaCare, the state’s pioneering health care program for those who work but still struggle to afford medical insurance. So it’s hard to buy the argument from state Republican legislators that jettisoning this program and starting over with something completely new — “MinnesotaCare II” — is in the best interests of health care stability in the state.
The recent announcements of layoffs at two Iron Range taconite operations should give policymakers a further reason to pause on a MinnesotaCare makeover. Rural regions of the state rely heavily on the program, with the highest per-capita enrollment in outstate Minnesota counties. Any major overhauls of this critical safety-net program, which serves those whose incomes are between 138 and 200 percent of the federal poverty level, should be done with caution.
The MinnesotaCare replacement proposal championed by Rep. Matt Dean, R-Dellwood, moves too quickly and lacks too many critical details to merit support. Dean has introduced legislation to replace the program, which was recently overhauled to take advantage of new federal funding available through the Affordable Care Act.
The new MinnesotaCare II would replace enrollees’ current coverage with subsidized private health care plans bought on MNsure, the state’s new online health insurance marketplace. Federal subsidies to offset monthly premiums’ costs are already available to MNsure customers who qualify financially. Dean’s plan would also provide some type of state subsidy to further offset health care costs. On Thursday, Dean repeatedly said his plan would provide health care stability for both program participants and the state.
Unknown at this point is how much state assistance would be available to participants. That raises serious questions about affordability for this cost-sensitive group of Minnesotans and the potential to reverse recent historic gains in medical insurance coverage. UCare, a Minnesota health plan, provided several cost scenarios for the new program to an editorial writer. For example, a family of four with an annual household income of $35,000 a year currently pays $50 a month in sliding-scale premiums, with a monthly deductible of $5.70. Similar coverage in the new program could cost them up to $800 a year more in premiums, according to UCare. Their deductible would also increase substantially.
Dean does deserve credit for spotlighting concerns about the current program’s financial viability and offering up a solution. Projections of federal support have indeed fallen far short of expectations. For 2015, the feds will pick up about 39 percent of the annual cost of $547 million. In 2016, the feds’ share is expected to rise to 43 percent. The state relies on a provider tax, which sunsets at the end of 2019, and enrollee premiums to pay for the program.
Minnesota is best served by looking comprehensively at measures to shore up MinnesotaCare rather than rushing to embrace a sweeping change that lacks critical supporting details. A more sensible step would be to commission a thorough, impartial study to evaluate the program’s financing and propose measured reforms. Until then, the state should leave the program as it is.