Health care access fund projected deficit now a surplus

Shawn Welch, director of reports and forecasts for the Department of Human Services, right, and Assistant Director Susan Snyder testify before the House Health and Human Services Finance Committee March 3 during an update on the state’s Health Care Access Fund. Photo by Andrew VonBank

The fund, intended to provide health care to low-income people who do not qualify for Medicaid, is projected to have a balance of $13 million in Fiscal Year 2017, rather than a previously forecasted $62 million deficit, according to Susan Snyder, the department’s assistant director.

The House Health and Human Services Finance Committee took no action on the issue Tuesday. Funding sources come from a 2 percent tax on gross revenues paid by health care providers, hospitals, surgical centers and wholesale drug distributors; 1 percent tax on gross premiums of HMOs and other managed care organizations; and MinnesotaCare premiums. Other sources include a federal match on administration costs; investment income, and the General Fund.

The providers’ tax and insurer’s premiums contribute about 70 percent to the fund’s account.

The provider tax is scheduled to expire Dec. 31, 2019.

Several other factors have had an impact on the fund’s solvency, including a 2013 fund transfer to offset the expansion of Medical Assistance. Last year, legislators limited the amount of HCAF money that can be used to pay for Medical Assistance.

Also, expanding Medical Assistance meant that more people shifted from MinnesotaCare to Medical Assistance, leading to lower enrollment and premiums – money that is added to the fund. However, people who remained in the program tended to have higher medical needs and costs, Snyder said.