What Will “Repeal and Replace” Look Like? Minnesota Reforms May Offer a Sneak Peek

State considers one-time bailout, bare-bones coverage, and “public option” insurance plans

In the midst of the uncertainty surrounding the Patient Protection and Affordable Care Act (PPACA), states still must govern their insurance markets. Most have been muddling through with the 2017 status quo, but Minnesota is a special case, taking three unusual actions that are worth a closer look, according to a report from Kaiser Health News.

Last month, Minnesota passed a one-time bailout for some consumers in the individual insurance market dealing with skyrocketing premiums; rejected an attempt to let insurers offer cheaper, bare-bones coverage; and laid the groundwork for a homegrown “public option” insurance plan.

  • One-Time Bailout

Faced with some of the country’s biggest hikes on premiums in the individual market—50% to 67%, on average––Minnesota lawmakers passed a bailout for people who earn too much to qualify for the PPACA’s federal tax credit. The $300 million law will cut monthly 2017 premiums by 25% for approximately 125,000 Minnesotans. In October, Democratic Governor Mark Dayton called the PPACA “no longer affordable to increasing numbers of people.”

  • Bare-Bones Coverage

A failed amendment to the Minnesota legislation sought to strip dozens of so-called “essential benefits” from health plans with the expectation that slimmed-down coverage would cost less. Republican State Representative Steve Drazkowski, who offered the amendment, said he was trying to eliminate the current, “government-controlled, one-size-fits-all, dictating set of mandates.”

The laundry list of benefits that consumers could choose to have covered or not under Drazkowski’s amendment included maternity care, diabetes treatment, and mental health care, among others. Some items on the list were very specific: Lyme disease, prostate cancer screenings, and outpatient surgery.

Governor Dayton and other Democrats opposed the amendment, and it dropped out of the final legislation.

Other amendments did get passed, including a provision that changes longstanding laws requiring health maintenance organizations (HMOs)––insurance plans that cover only services provided by their network of doctors and other health providers––to be not-for-profit. The new law allows out-of-state, for-profit HMOs to sell health plans in Minnesota.

  • “Public Option” Insurance Plan

Minnesota is one of two states offering a so-called “basic health plan” that covers lower- and moderate-income residents. MinnesotaCare provides subsidized health coverage to approximately 100,000 state residents, capping eligibility for a family of four at $49,000 in earnings per year.

Dayton wants to open the plan to all Minnesotans, with higher-income residents paying full price for their coverage. He said that allowing people with higher incomes to buy MinnesotaCare coverage at full price would reduce prices overall and increase competition on the individual market.

Opponents, on the other hand, said expanding government’s role in health care is a bad idea. As he campaigned for the presidency, Donald Trump said he opposed a national “public option” because it would drive away private insurers, “leaving Americans with fewer options and eventually no choices but a government-run plan.”

Source: Kaiser Health News; February 7, 2017.