About 125,000-150,000 Minnesotans buy health insurance on the individual market without a subsidy. The premiums for available plans are often so high many people can’t afford to buy insurance. Even those who can face the ugly triad of high deductibles, high co-insurance, and narrow physician networks that often makes the insurance useless for most of their medical problems.
Others also struggle to afford health insurance. The Minnesota Department of Health recently reported that limited options and rising costs have forced over 116,000 Minnesotans to drop health insurance coverage over the last two years.
In 2017, Minnesota gave about $800 million of the state’s budget surplus to insurance companies to help those on the individual market afford their health insurance better for 2017, 2018, and 2019. It’s not likely the Legislature will be able to afford that every three years.
Is there a better way to help those in the individual market afford health insurance? There is — MinnesotaCare, a program for working-class Minnesotans who earn too much to qualify for Medicaid but who couldn’t afford insurance on their own.
About 100,000 Minnesotans have used MinnesotaCare since 1992 to get quality health coverage at prices they can afford. It provides coverage for adults and children statewide.
Gov. Mark Dayton proposed to remove the program’s income restrictions, giving all Minnesotans who purchase their health insurance on the individual market a chance to “buy in” to MinnesotaCare at premiums that would cover the cost of their policies. This would let about 100,000 Minnesotans buy better health coverage for 13 percent less than the price of commercial health plans. In the long run, the program would pay for itself.
MinnesotaCare has a broad network of clinicians and hospitals, so those joining it will find it easier to get care than with many of today’s commercial plans. This is especially true in rural areas. MinnesotaCare’s deductibles and co-payments are far lower than they are in most commercial plans.
The main opposition to the buy-in proposal is that payments to clinicians and hospitals would be at Medicaid or Medicare rates, which are lower than the rate commercial plans pay. Some Republicans have even claimed rural hospitals will close if this happens. Doctors and hospitals fear that some patients will drop commercial plans to buy into MinnesotaCare, so they will get less money for the care they provide to those patients. However, unless their office schedules and hospital beds are full, they will get more visits and admissions from other people who buy in to MinnesotaCare, because they will either newly have insurance or can now afford to seek care with better coverage.
Further, doctors and hospitals may be in-network for people who buy into MinnesotaCare when they weren’t before. What doctors and hospitals earn from caring for these patients will likely more than make up for the losses they fear.
Republicans’ fears are misguided, as rural hospitals don’t typically close because not enough of their patients have commercial insurance. They close because there aren’t enough patients in their beds. A MinnesotaCare buy-in may save some rural hospitals, not kill them.
Expanding MinnesotaCare would not expand the state bureaucracy, as some have claimed, because MinnesotaCare is administered by managed care organizations around the state. Most physicians and hospitals are used to billing the MCOs in their area, so having more people in MinnesotaCare won’t disrupt their billing practices.
Commercial insurers have been backing out of plans because they don’t feel as if they can make money on them, leaving many policyholders uncertain of whether they can buy their policy again next year. If its funding sources are preserved, MinnesotaCare will be around for a long time, giving Minnesotans who buy into it confidence they will still have insurance next year or beyond.
Next year’s Legislature should let people who need to buy health insurance in the individual market buy into MinnesotaCare. Even if the state needed to pay something toward the full price of MinnesotaCare to make buying in more affordable, many more people would have health insurance at a lower cost to all Minnesotans than with what we are doing now.