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Lower health insurance rates are welcome, but what now?

October 6, 2018

No, Mr. President: The credit for Minnesotas newly announced lower health insurance rates does not belong to your administration, a claim made at a Thursday rally in Rochester. Instead, its due largely to a temporary state aid program passed in 2017 by Minnesotas Republican legislative majority.

The state Department of Commerce recently released 2019 rates for the 3 percent of Minnesotans who buy their insurance on their own instead of getting it through employers or public programs such as Medicare. Consumers can expect to see some of the largest average decreases in the nation, according to an Oct. 2 Star Tribune story. Those average declines range from nearly 28 percent for those who buy from Blue Plus to 7.4 percent for HealthPartners customers.

A strong economy and lower utilization of medical services contributed to lower premiums, but the states two-year, $542 million reinsurance program, which subsidizes insurers for some high-cost enrollees, did the heavy lifting. It should also be noted that Minnesota individual market premiums could have been even lower had it not been for ongoing attempts at the federal level to undermine the Affordable Care Act (ACA).

Those unhelpful moves to destabilize the individual market include Congress effectively killing the mandate to buy health insurance and the administrations push to expand the sale of short-term health plans. Documents filed by HealthPartners and some other major Minnesota insurers specifically note the negative impact.

Minnesota Republicans understandably touted the reinsurance programs effectiveness after the rate release. But this is no time to sit on those laurels. Reinsurance sunsets after 2019, and the switch-off could leave consumers vulnerable to steep rate hikes.

Complicating that is the end-of-2019 sunset of the states provider tax, which provides the largest flow of dollars to the Minnesota Health Care Access Fund. Lawmakers relied on this pot of money to pay for the reinsurance program. The access fund, enacted under former Republican Gov. Arne Carlson, also provides critical dollars about $824 million during the current biennium to the states medical assistance program.

This state health care finance cliff is one of the most serious challenges awaiting a new governor and legislators. Regrettably, its been overshadowed by whether or not a candidate supports a single-payer-style health care system like those in Canada or Great Britain. This debate plays to ideologues on both sides but sidesteps more pressing state problems.

Answers are needed early in 2019 on whether to extend reinsurance or find alternative measures to help consumers. Is there a more efficient way to provide this aid for example, direct rebates to consumers vs. payments to insurers?

And if reinsurance or aid like it is extended, how will it be paid for if the provider tax switches off? Are there other mechanisms to pay for it, such as an assessment on insurers? Most state reinsurance proposals, and the ACA temporary reinsurance program, are financed by assessments on health insurers, said Lynn Blewett, a University of Minnesota health care expert.

Lawmakers also ought to consider whether a MinnesotaCare buy-in program is a more sustainable long-term solution to help consumers who buy on their own. MinnesotaCare, enacted in 1992, is a public program that covers people who make too much for traditional medical assistance but not enough to comfortably afford private coverage. Gov. Mark Daytons buy-in proposal hasnt been given the airing it deserves at the Capitol. That needs to change.

Minnesota led the nation when it put reinsurance in place in 2017. That was a worthy accomplishment, but the hard work has just begun.

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