A public option? In Minn.? Well … maybe?

Opinion editor’s note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.

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There’s always a flip side to those living-your-best-life images featured in prescription drug ads. The medication may aid an ailment, but there’s often a long list of potential side effects to consider. The decision comes down to whether the advantages outweigh the trade-offs.

That same risk-benefit calculation should be at the forefront of policymakers’ minds as Minnesota considers its next major state-level health reform: a “public option.”

This generally involves having a government-run or government-funded health insurance program that competes with private insurers. One example: allowing consumers to buy into existing programs, such as Medicaid or Medicare, currently limited to the poor or elderly. The aim is to drive down consumer costs through competition and improve access to coverage without burdensomely high deductibles or copays.

In contrast to the sweeping agenda passed last year, DFL majorities commendably took a more measured approach with this ambitious health reform. They commissioned an expert analysis of a public option’s cost and impact, though with an eye toward establishing one as soon as 2027.

The report is newly complete and available at tinyurl.com/MNpuboption. It’s a sensible foundation for future debate. But it’s not an easy read because implementing a public option is a dauntingly complex undertaking, a reality the report makes abundantly clear. While a public option appears to be doable, the report also raises fair questions about whether the state should do it.

The 65-page analysis was done by Milliman, a well-known consulting firm. It puts meaty details on what it would take to launch a public option. That’s an important step forward in a debate that’s too often driven by ideologies on both sides.

The report provides welcome clarity on several key questions, with the big one being how much it would cost. The analysis looked at two main scenarios:

• Model 1, the MinnesotaCare buy-in. Households with incomes too high to qualify for the state’s program for the working poor could buy into it and get the cost-sharing and generous benefits that the program offers.

• Model 2, the Qualified Health Plan (QHP) approach. This would establish a plan sold on MNsure that would offer benefits comparable to MinnesotaCare to Minnesotans with incomes above 200% of the federal poverty level — $29,160 for a household of one and $60,000 for household of four.

The estimated annual price tag for the first model, the buy-in, ranges from $943 million to $1.3 billion. The cost range for the second: $1.2 billion to $1.3 billion.

Substantial federal dollars would likely be available to help fund this, the analysis suggests, answering one important question about moving forward. That said, this aid would only cover a portion of the total costs — ranging from 26% to 34% for Model 1, the buy-in. Or, for Model 2, 28% to 31%.

The remainder would be picked up by the state and premiums paid by consumers. The yearly cost to state government for Model 1 ranges from $113 million to $364 million, according to a state Commerce Department summation. The same cost for Model 2: $86 million to $187 million. The higher cost estimates reflect scenarios that increase reimbursements to medical providers.

That would likely be a political reality given Minnesota providers’ concerns about low public program reimbursements for their services. The impact on health care systems’ finances is one critical public option “side effect” that must be at the forefront of any debate.

The Milliman report also doesn’t reflect administrative and information technology costs to launch a public option in Minnesota. Detail is needed on that, because it would likely be a considerable sum.

With all this in mind, the public option could be a good deal for consumers, though monthly premium savings might fall short of expectations.

Projected enrollment ranges from 107,000 to 151,000 Minnesotans. Under one Milliman scenario for Model 1, a 53-year-old Minnesotan who currently has a “bronze plan” would go from paying a monthly premium of $483 to $455, but would see an improvement of benefits that the report valued at $331 a month. Under Model 2, that person’s monthly premium would shrink from $662 a month to $455, with improved benefits valued at $331.

Commerce Commissioner Grace Arnold has sent smart follow-up questions to lawmakers. The Star Tribune Editorial Board would add to this list:

• Minnesota’s uninsured rate is 4.7%. Milliman concludes that two-thirds of those uninsured would not be eligible to enroll. Of those eligible, many may not want to pay a monthly premium for coverage. If a major goal is to reduce the uninsured rate, is there a better way to achieve this?

• What would happen to the state’s individual market and MNsure, which serves it, if the bulk of consumers migrate over to the Model 1 public option?

• Given providers’ financial health, would even the increased reimbursement scenario outlined in the report suffice? If it must go higher, that would add substantially to the program’s cost.

• Would the projected monthly premiums be affordable for consumers? Again, are there other ways to drive down out-of-pocket costs, such as targeted aid for those with lower incomes?

Renowned University of Minnesota researcher Lynn Blewett flagged another key question: What would the public option do to drive down the actual cost of health care?

None of these questions have easy answers, which is why benefits and trade-offs must be in focus. The report advances the debate over a public option, but it does not offer a slam-dunk case for implementing one.