Originally appeared in the Duluth News Tribune September 26, 2017.
In Minnesota we have a strong tradition of innovation when it comes to health care delivery. We also value health and wellness, as demonstrated by our uninsured rate, which is second-lowest in the nation, and our high rankings on many health measures.
As we develop policies for health care reform, we should move forward with this tradition and our values in mind.
Minnesota has been a leader in developing unique ways to deliver affordable and accessible health coverage. Democrats and Republicans collaborated to create MinnesotaCare, a successful program that provides affordable health insurance for working Minnesotans. Today, MinnesotaCare provides access to quality health care for more than 100,000 Minnesotans, many of whom reside in nonmetro Minnesota. For 25 years, farmers, small-business owners, young adults, and single parents have been using it to provide their families with quality health care. MinnesotaCare is a prominent example of what can be done when we work together.
This is why news from Washington, D.C., was so alarming. Minnesota applied for a federal waiver to implement "reinsurance," a Republican-led plan to subsidize health insurers with the objective of reducing private premiums. Tom Price, secretary of U.S. Health and Human Services, approved a waiver for Minnesota for reinsurance — but it also cuts federal funding for the MinnesotaCare program by $369 million. The rationale for such a sharp cut is puzzling, as the state would only receive $323 million in federal funds for reinsurance. These are funds that Minnesota would receive without the waiver, in the form of tax credits to consumers.
The math doesn't make sense for Minnesota. Essentially, we would be losing $369 million for a gamble to stabilize the private health insurance market (via reinsurance) while putting affordable health insurance for working Minnesotans in jeopardy. Minnesota is being penalized by the federal government for our efforts to expand affordable health insurance coverage.
We cannot move forward with an unsustainable, short-term reinsurance program that results in a huge loss of federal funds. It's time to shift our focus to put people first, not insurance companies. In 2017, Minnesota successfully implemented state-funded premium discounts to consumers to stabilize the individual market. This relief should be extended into 2018 with a 25 percent premium discount. At an estimated cost of $200 million, this is a better deal for both policyholders and taxpayers than reinsurance. The reinsurance program created by the Republican-led Legislature provides a maximum premium discount of only 20 percent with a cost of over $500 million and no source of funding beyond 2019.
Instead of implementing an unsustainable reinsurance program, we should extend premium discounts for one year and, in 2019, expand access to affordable health insurance by implementing the MinnesotaCare buy-in option. Under this plan, any Minnesotan could access the insurance provided by MinnesotaCare at an affordable premium; about 12 percent less expensive than plans available commercially. Other than one-time startup costs of $12 million, there would be no cost to taxpayers; policyholders would pay the total premium with no state subsidy.
MinnesotaCare has a track record as an efficient, sustainable health plan, with a network of quality providers. Expanding the pool of consumers enrolled in MinnesotaCare provides an additional benefit of giving the state a greater opportunity to address the growth rate of health care costs.
The MinnesotaCare buy-in plan is our most feasible option to reform health care in Minnesota by 2019. Let's work together to lead the way on solutions which will improve care, cost, and access for everybody. Health care reform need not be partisan or complicated.
Rep. Jen Schultz, DFL-Duluth, serves on the Health and Human Services Finance Committee in the Minnesota House and is a professor of economics at the University of Minnesota Duluth.