Feds need to clarify whether they're offering Minnesota a devil's bargain

Greater flexibility for state health care innovation is at the heart of Republicans' case for their latest effort at repealing and replacing the Affordable Care Act. That pitch simply isn't credible until Tom Price, U.S. secretary of health and human services, clarifies whether he has fully remedied the harm his agency has threatened to inflict on funding for MinnesotaCare — a popular, innovative state-run health program for working families.

MinnesotaCare covers about 90,000 people who make too much to qualify for Medical Assistance but who would still struggle to buy private insurance. Under the Affordable Care Act, state officials tapped into newly available federal dollars to help pay for MinnesotaCare — a move that eased pressure on the state budget while modernizing the program.

But in the past week, Gov. Mark Dayton announced that he was told by Price's agency that approval for another innovative state health program — one that could cut individual market health insurance premiums by 20 percent — could involve steep cuts to MinnesotaCare. If federal officials approved the consumer aid program and $208 million to help pay for it, the trade-off would be a cut of $369 million in federal support for MinnesotaCare. The net loss would be at least $161 million — a sum that the state can ill afford to lose.

While the connection between the two programs is complicated, the federal funding formula for MinnesotaCare involves the cost of private insurance in the individual market, which serves those who do not get coverage through employers or public programs. State Sen. Michelle Benson, R-Ham Lake, and state officials worked diligently with Price's agency to ensure that there would be no changes to MinnesotaCare funding if the consumer relief program — known as "reinsurance" — received approval.

After months of assurances, Dayton's office learned suddenly about a week ago that accepting federal dollars for the program had turned into a devil's bargain because of the hit to MinnesotaCare. That Price's agency changed course so suddenly when Minnesota did nothing wrong is disturbing. That's especially true when the main argument for Graham-Cassidy, the proposed GOP replacement for the ACA, is that it would encourage innovation at the state level.

Minnesota's reinsurance program exemplifies state innovation. It is one of two states to set up a reinsurance program and it has been lauded nationally for its quick work to keep coverage affordable. Alaska also set up a reinsurance program, and the feds approved it with minimal fuss in July. On Friday, Price's agency sent a letter to Dayton saying that the reinsurance program proposal — known as a "waiver" — has been approved. That decision had been expected in August.

Regrettably, it is unclear from the letter and Dayton's account of a phone conversation with Price how the waiver approval will affect MinnesotaCare funding. Our initial take is that MinnesotaCare will suffer. Federal officials referred inquiries to state officials, and state officials were still analyzing the letter late Friday.

The lack of clarity and the last-minute maneuvering by Price's agency raises troubling questions about his leadership, the agency's competence and whether the potential cut to MinnesotaCare is punishment because the state took advantage of an ACA opportunity. The secretary, who is embroiled in controversy over his use of private jets, is a prominent opponent of former President Barack Obama's health care law.

Minnesota ought to be rewarded, not punished, for its pioneering program. The late letter and the agency's nonanswer on Friday about MinnesotaCare creates the perception that it has something to hide. Price needs to make clear that MinnesotaCare funding will not be cut because the state did the right thing — aiding struggling insurance consumers. Until then, it should be assumed that the Trump administration is not a reliable partner for state health innovation.