Dayton cites e-mail from feds in reinsurance fight

Gov. Mark Dayton's office on Thursday released an e-mail from a federal official that appears to support the governor's argument that Minnesota received instructions on how to create a reinsurance program that wouldn't also result in less funding for the state's MinnesotaCare program.

Dayton blasted federal officials this week, saying his administration was recently told that federal approval for the reinsurance program, which would lower premiums in the individual market, will bring with it a larger corresponding cut in funds for MinnesotaCare, which covers lower-income residents sometimes described as the "working poor."

The document released Tuesday is an e-mail exchange in March between Republican state Sen. Michelle Benson, R-Ham Lake, and Jeff Wu, acting director of a division within the U.S. Department of Health and Human Services (HHS).

Wu tells Benson that funding for MinnesotaCare — also known as a Basic Health Program (BHP) — would go down, but the state would get a "pass-through" to compensate.

"You'll get a pass-through equal to the amount the BHP funding went down," Wu wrote. "Presumably, you could just transfer the appropriate amount of funds over to BHP."

A spokeswoman for HHS did not comment.

Reached by phone, Benson said of the e-mail exchange: "We believed that there would be funds sent to compensate for any loss in BHP funding."

Benson e-mailed Wu for guidance on how to write legislation for the reinsurance program, which would help lower premium increases for 2018 in the state's individual health insurance market. The final bill that became law included $542 million in state funding over a two-year period.

The state Commerce Department said the program will lower health insurance premiums by 20 percent from where they otherwise would be next year. But the program is contingent on federal approval.

HHS Secretary Tom Price hasn't publicly issued a final determination on Minnesota's application. Dayton went public with concerns this week based on information administration officials received late last week in a teleconference.

In addition to the e-mail exchange between Benson and Wu, the Dayton administration on Thursday also released an e-mail exchange from late 2016 in which an Obama administration official seems supportive of Minnesota's reinsurance plans.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck