Supreme Court ruling on health care subsidies tees up MNsure debate

The health care act's big win at the U.S. Supreme Court could mean the eventual end of MNsure.

Republicans at the Legislature this year called for switching to healthcare.gov, the exchange operated by the federal government for 34 states, because of technical problems at MNsure and questions about its finances.

DFLers countered that any such move would be unwise before Thursday's ruling, since the high court could have blocked tax credits issued through the federal exchange.

Now, the federal option is back on the table, said Rep. Matt Dean, R-Dellwood, adding that he wants the issue addressed by a newly created state task force on health care financing options.

"Why are we doing this expensive, troublesome, state-based exchange when we could get the same thing from the federal government without all the hassles?" Dean said Thursday.

Peter Benner, the current MNsure board chairman, said he understood the issue likely would be looked at. But he encouraged a careful review, because MNsure is designed to work with the state's MinnesotaCare insurance program, while the federal exchange might not be.

Another question is whether a move to healthcare.gov would jeopardize federal funding for the portion of MNsure used in public health insurance programs, Benner said, adding that federal funds are critical to ongoing repairs to the IT system.

"You'd have to do an incredibly detailed due diligence on the public program impact of this before anyone should start thinking at all about whether healthcare.gov is an option," he said. "People need to actually do the hard work of really analyzing this in great detail."

The state has fielded applications for a 29-member task force on health care financing, which was created as part of a health care budget signed into law by Gov. Mark Dayton this spring.

The task force will make recommendations by mid-January about how to increase access to and improve the quality of health care for Minnesotans, including a look at MNsure and public insurance programs. Dayton has said the task force should look at all options, including a switch to the federal exchange.

"Time will tell," Dayton said Thursday when asked about MNsure's future. "That's one of the challenges we face, one of the reasons this task force will be very important — to see whether it's a matter of improving the perception and efficiency of MNsure, or whether there's just a structural imbalance."

The Supreme Court's decision Thursday did not directly affect health insurance shoppers in Minnesota because the plaintiffs weren't challenging the legality of federal subsidies through state-based health exchanges such as MNsure.

Subsidies under the federal Affordable Care Act (ACA) were in question in 34 states including Wisconsin where consumers use healthcare.gov.

"I had a sigh of relief," said Kathleen Phillips, 64, of Chippewa Falls, Wis., a health law supporter who says she couldn't afford coverage without subsidies.

The tax credits have been critical to many residents of western Wisconsin, where premiums in the individual market have been among the nation's highest.

Thursday's decision also was a relief to Minnesota health care firms that have out-of-state operations.

Minneapolis-based Allina Health System, which also serves parts of Wisconsin, was "pleased with the ruling,'' said spokesman David Kanihan.

Rochester-based Mayo Clinic has operations in several states that don't have their own health exchanges, including Arizona, Florida, Georgia, Iowa and Wisconsin.

"The federal premium subsidies will continue to reduce the cost of insurance for the millions of Americans who receive them and continue to improve access to health care," Dr. John Noseworthy, Mayo's chief executive, said in a statement. "It is important that we not step back from our commitment to health insurance coverage for all Americans."

Minnetonka-based UnitedHealth Group, the nation's largest health insurer, has a relatively small presence in the individual health insurance market and didn't comment on the high court ruling. But the ruling is still significant to UnitedHealth, said Stephen Parente, a health care finance expert at the University of Minnesota.

The health law, for example, has significantly expanded coverage under the state-federal Medicaid program, Parente said, and many states are turning to private insurers to manage Medicaid care. The law also promotes new models for paying health providers, an area where United's Optum division has expertise.

"UnitedHealth Group has a big stake in the ACA, so it probably creates a lot more certainty for them," Parente said.

Christopher Snowbeck • 612-673-4744