Health care reform is one of the most difficult and thankless tasks policymakers can take on. But this week's preview of 2018 coverage costs on Minnesota's individual health insurance market shows that progress is possible when politicians set aside ideology and focus on pragmatic fixes that put consumers first.
Reinsurance appears to work, but would a MinnesotaCare buy-in be more affordable?
A larger reimbursement commitment would likely cut state's costs.
On Monday, the state Commerce Department released proposed 2018 rates for the narrow slice of state consumers who buy insurance on their own instead of getting it through an employer or a public program such as Medicare. There was good news for many of these self-employed individuals. A new state program intended to cushion them from rate hikes — one enacted at the State Capitol early this year — appears to be working as intended.
Last year, Minnesotans buying on their own faced average rate hikes of 50 to 67 percent. But if the new state "reinsurance" program is approved by federal officials as expected, consumers will face far smaller increases or even see substantial decreases.
Commerce Department officials issued a range of average rate changes for those who buy from Minnesota's major insurers. Medica customers, for example, could see anywhere from a 5 percent decline to a 5 percent increase. Without the reinsurance program, these enrollees could have seen hikes ranging from 15 percent to 29 percent.
Projections for those who buy from a Blue Cross and Blue Shield affiliate run from a 1.5 percent decline to an 11.4 percent increase. Had the reinsurance plan not been in place, these Blue Plus enrollees would have seen increases from 16.4 percent to 31.7 percent. It is important to note that these rates are not yet finalized. That will take place this fall. Nevertheless, the reinsurance plan appears to be on track to provide substantial relief.
Praiseworthy hustle on both sides of the political aisle made it happen. Gov. Mark Dayton proposed this type of program last fall and called for a special session to pass it quickly. Lawmakers didn't accede to a special session. But the Republican-majority House and Senate made reinsurance a top agenda item early in the legislative session and passed it.
Still, this is no time for either Republicans or DFLers to rest on their health policy laurels. Reinsurance is an expensive fix, with a two-year price tag of $542 million. Some also considered it a stopgap solution until congressional Republicans replaced the Affordable Care Act with their own plan. With no replacement imminent, questions must be raised about reinsurance's sustainability.
Other options — such as a MinnesotaCare buy-in — also merit fresh consideration. MinnesotaCare covers working families who make too much for traditional medical assistance but still struggle to buy private insurance. Those eligible pay sliding-scale premiums. A buy-in would allow the general public to buy into the program — paying the full cost of coverage.
A common objection to this alternative is that public programs don't adequately reimburse medical providers for enrollees' care. But state policymakers can raise these reimbursements. A key question: Would a healthy provider reimbursement increase cost less than reinsurance? State Human Services Commissioner Emily Piper suggests that the answer is yes. The estimated price tag for a 10 percent increase for MinnesotaCare providers: $45 million to $50 million a year.
The new, bipartisan Minnesota Senate select committee on health care should follow up. Lawmakers need to build on reinsurance's momentum to find consumer-first fixes. The hard work on health care hasn't ended. It's just begun.
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