'Blindsided' by Washington, state officials scramble to save MinnesotaCare

Minnesota officials and legislative leaders said this week they are working hard to rescue the MinnesotaCare health insurance program, adding that they were blindsided by a Trump administration decision to cut its federal funding.

The decision came — unexpectedly — two weeks ago, when federal health regulators approved a separate Minnesota plan to reduce premiums in the private health insurance market, leaving an uncertain future for MinnesotaCare, which covers 91,000 people often described as the working poor.

"The administration has been promising all throughout 2017 that they want to give states flexibility to innovate and control their own destiny," said Emily Piper, Minnesota Human Services commissioner. "And it just doesn't feel like that is what they are doing, and that is incredibly frustrating."

The decision has also sowed uncertainty for governors around the country who have similar requests pending in Washington, D.C., and thought Minnesota had federal assurances on the question of federal funding.

"It is a tough deal for a state to put the resources together for a proposal like this, get it filed and then have it changed at the last minute," said Joel Ario, a managing director at Manatt Health, a health consulting firm. "I think what this will do is really light a fire under the states to work together to get clarity from the federal government on exactly what they can count on."

And for the consumers who rely on MinnesotaCare, it means another stressful time.

"I feel like politicians have been playing kickball with my life," said Andrea Sorum, who has been on MinnesotaCare for three years. "And I am not alone in saying I lose sleep over it."

Republicans in the U.S. House passed an Obamacare repeal and replace bill that included elimination of MinnesotaCare federal funding. Similar attempts that failed in the U.S. Senate would also have stripped federal money from the 25-year old program.

Now, top officials of the Dayton administration say they are trying to get some clarity from Washington, while exploring alternatives.

"We are trying to identify the whole scope of options that we have to solve this issue," Piper said in an interview Thursday. "Because we were completely blindsided by this 180 reversal by the federal government."

The Trump administration's decision will not eliminate MinnesotaCare funding entirely, and the best estimates indicate that the program will have enough money for 2018, Piper said.

But over the next two years, Minnesota will lose $369 million if state leaders cannot convince federal officials to reverse their decision.

Officials at the U.S. Department of Health and Human Services, who were also dealing with the surprise resignation of Secretary Tom Price, have not given a public explanation for the decision. A spokesman for the agency's Centers on Medicare and Medicaid Services declined to comment when queried Thursday by the Star Tribune.

But the law gives federal officials wide discretion to interpret regulations and approve or reject state requests for "waivers" to operate innovative health and welfare programs such as MinnesotaCare.

MinnesotaCare serves many entrepreneurs, farmers, part-time employees and other low-income workers who cannot afford premiums, deductibles and co-payments in the private insurance market, even if they were subsidized.

As a musician, Sorum, 35, works three jobs and likes them all — but none provides benefits. She pays about $70 a month for MinnesotaCare premiums, which are based on a sliding income scale.

"It is the best policy I've ever had," said Sorum. "I haven't had any trouble finding care, and all of the providers that I have needed to see have accepted it."

Sen. Tony Lourey, DFL-Kerrick, said MinnesotaCare is critical for low-income workers because it is affordable and provides a comprehensive benefit set, including mental health and chemical dependency treatment coverage lacking in many private insurance plans.

"I really do feel a fundamental change in the 50-plus-year-old state-federal partnership in funding health and human services," Lourey said. "It feels like the intent is to have a chilling effect on states' innovation and what they do to serve their populations."

But federal money often comes with strings that can feel like rope, said Sen. Michelle Benson, R-Ham Lake, chairwoman of the state Senate's Health and Human Services Finance and Policy Committee.

"This was definitely a surprise, since we had gotten assurance from the regulatory authority," she said. "In order to help the Minnesota individual market, we shouldn't do with less for MinnesotaCare."

"The fact that they are still looking at it is hopeful," Benson added. "We are going to keep nudging until the decision is made."

Leslea Hodgson, who raises beef cattle with her husband near Fountain, Minn., said MinnesotaCare has been a good plan, even better than an employer plan she had once. It has been essential for both of them, especially since farming includes a risk of injury.

"When he didn't have any insurance, that was walking a thin line," she said.

But as health insurance has become a hot-button issue once again, Hodgson said she fears that politicians will be making drastic changes to the health care system over the next 10 years.

"I worry that one year we won't have affordable insurance and maybe the next year we will," she said.

Glenn Howatt • 612-673-7192