A second major Trump administration decision that will punish rather than reward Minnesota for health care innovation ought to send the state's influential Republican House members into overdrive to undo the damage being inflicted on their home state.
The official announcement that the administration will terminate "cost-sharing reduction" (CSR) payments to insurers came last week. The move is one of two recent federal health policy decisions that will have a particularly harmful impact on Minnesota. The CSR cuts come on the heels of another harmful cut to the state's MinnesotaCare program, lending urgency to efforts by the state's congressional delegation to shield this vital program.
The CSR cuts are nothing more than a way to undermine the Affordable Care Act. Under the law, insurers provide CSR assistance to financially eligible consumers to help defray out-of-pocket expenses — such as deductibles. The federal government then reimburses insurers.
Those insurers will likely try to recoup the cost of what will now become an unfunded mandate by raising premiums for the estimated 7 percent of Americans who buy on the individual health insurance market. But in Minnesota, the cuts will mainly impact MinnesotaCare funding. The reason: The state took advantage of a new opportunity under the ACA to use CSR dollars to help pay for MinnesotaCare and improve its benefits.
MinnesotaCare covers working families and adults who make too much to qualify for medical assistance but would struggle to buy private health insurance. CSR funding now provides about $100 million a year for MinnesotaCare — roughly a fifth of the program's annual cost. Those federal dollars now appear to be going away unless Congress intervenes.
The potential fiscal headache is compounded by the devil's bargain the feds offered Minnesota in a waiver agreement at the end of September. The waiver was simply permission sought by the state to implement a reinsurance program to lower or hold steady health insurance premium costs. The permission was granted, but with a costly catch — the state could lose $369 million over the next two years from another federal funding source that helps pay for MinnesotaCare.
It is unclear at this point what the total damage to MinnesotaCare could be from the two policy actions. Gov. Mark Dayton's administration is still crunching the numbers, but it could be as high as $569 million over two years. Regardless, the back-to-back decisions raise troubling questions about Minnesota being singled out because it was an early ACA adopter.
The federal Department of Health and Human Services certainly should have seen in advance the harm Minnesota would suffer. An agency with strong, conscientious leadership would have headed this off, not sprung both moves by surprise. Dayton and Minnesota Republican legislative leaders are pushing the feds to restore MinnesotaCare funding. But that's likely an uphill battle.
