ST. PAUL, Minn. – The House Commerce Committee on Wednesday approved a bill requiring any transition of a non-profit health maintenance organization (HMO) to a for-profit enterprise to be reviewed and approved by the Minnesota Attorney General. The legislation, HF 533, authored by Rep. Jen Schultz (DFL – Duluth) also prohibits a non-profit HMO from using earnings for any purpose other than providing comprehensive health care – giving the Attorney General oversight if a non-profit seeks to transfer assets to a for-profit arm, and extends the moratorium on HMO conversions to 2029.
“Minnesotans expect that money they’ve paid toward health care will go toward just that purpose: providing health care, not enriching insurance company executives and shareholders,” Rep. Schultz said. “The repeal of the for-profit ban was in addition to the $542 million handout insurance companies received from the reinsurance bill. As we work on real solutions making health care more affordable and improving the quality of care Minnesotans receive, the accountability measures in this bill will help ensure that money for health care is spent on people, not going toward corporate profits.”
In 2017, the Republican-led Legislature ended Minnesota’s 40-year ban on for-profit health insurers operating in Minnesota. This policy was repealed without any oversight measures being put in place.
Shortly after this, Medica transferred $90 million in reserves from its non-profit HMO to a holding company, allowing the money to potentially wind up within its for-profit arm. In at least 15 other states, executives have been essentially able to convert public-interest assets to golden parachutes following similar conversion schemes. Later in the 2017 session, the Legislature passed a two-year moratorium on HMO conversions to for-profit companies, set to expire this year.
Attorney General Keith Ellison is supportive of the legislation, which will next be considered by the Health and Human Services Policy Committee.