Minnesota's insurance plan of last resort nears end of line

Donna Devine is tired of being branded as "uninsurable" more than a decade after being treated for cancer.

"It didn't seem fair," said Devine, 48, of Edina. "I haven't had any recurrence. But it doesn't matter to the insurance companies. They don't look at you as a person — they look at you as a risk pool."

Until now, Devine's only option has been to buy insurance through a state-run program that helps those with pre-existing conditions or who have been denied traditional coverage. The program, called the Minnesota Comprehensive Health Association (MCHA), serves about 26,000 residents, but it will be phased out in 2014 when insurers will be required to take all comers under the Affordable Care Act.

"The good news is that the people we've cared for for years will now be able to go to the market and buy regular coverage, just like you and me," said Kirby Erickson, executive director of the high-risk insurance program.

State officials have spent months working on a plan that would quickly move enrollees out of the MCHA program and into the private market.

The challenge will be to do so without interrupting care or flooding the market with people with high medical needs that could cause premiums to spike.

People have turned to the state's high-risk program if they have used up their COBRA benefits or need to buy coverage for spouses and dependents.

The program also is available to self-employed workers, legal immigrants or those who are older than 65 but don't qualify for Medicare. Many have ongoing illnesses, pre-existing conditions or have had organ transplants — all of which make it hard to get insurance under today's rules.

"These are huge issues for a very targeted population," said Lynn Blewett, a professor of health policy at the University of Minnesota who studies national trends in health insurance. "MCHA has been an important part of Minnesota's safety net in that we have a very stable high-risk pool that's well established and has worked well over time."

Erickson expects "vast numbers" of MCHA enrollees will eagerly choose to shop with brokers or use the new competitive online insurance exchange, known as MNsure, where some will qualify for premium discounts.

But those who are in the middle of chemotherapy, long-term treatment programs, or are disabled will get special attention from a team that might include nurses, pharmacists or mental health specialists.

"We are very concerned about small subsets of our population," Erickson said. "We recognize they will be anxious and reluctant to take risks. It's human nature. If I'm being treated for cancer, the last thing I want to do is change my health plan."

Minnesota's high-risk insurance program is the largest and one of the oldest in the nation, launched in 1976 to create a safety net for those denied coverage. Today, 35 states operate similar programs that cover about 220,000 Americans.

Several states, including Texas and Wisconsin with the next-largest enrollments, will stop their programs immediately at the end of the year and move people to the exchange or private market.

Minnesota officials had hoped to take several years to unwind its program, but a lack of federal funding to ease the transition has put it on a faster track. The state Department of Commerce, which oversees the MCHA program, is expected to release details of the changeover next week, but a draft of the plan calls for closing the gate to newcomers at the end of this year and allowing a transition period through the end of 2014.

Yet a small slice of Minnesotans enrolled through the state's high-risk pool could find themselves in a bind as MCHA gets dismantled. Even though the federal law won't let insurers deny coverage, there's no guarantee that certain therapies and drugs now included in the MCHA program will be covered by insurance plans on the open market on the MNsure online exchange.

Among those affected could be children with autism and others whose illnesses require intensive treatments or expensive medications, such as for AIDS, multiple sclerosis and some mental health issues.

Amy and Daron Cox fear they may be caught in limbo. Both sons have received autism diagnoses and are covered through MCHA's high-risk pool.

"We're the in-between people who get dropped by Obamacare and the exchange," Amy Cox said.

She credits an intensive two-year behavioral therapy program covered by MCHA with giving her older son the skills he needs to start first grade this fall with few signs of the autism. The younger son is now enrolled in the program and has received occupational and speech therapy.

Through MCHA, the family pays about $230 a month in premiums plus a $3,000 deductible for each child to get access to the treatments. That's on top of a traditional plan they buy to cover Daron, a self-employed IT consultant, Amy and their daughter.

Outside of MCHA, few Minnesota health plans cover this type of autism therapy out of concern over its effectiveness and cost, which can run $100,000 a year. Legislators passed a law earlier this year requiring businesses with 50 or more employees to cover the autism treatment, but that doesn't help the Cox family.

For now, the couple plans to keep their younger son enrolled in the autism program and hang onto MCHA as long as they can.

"We're hoping and praying that nothing changes for a while so we can get through it," Amy Cox said.

Although the state operates the high-risk pool, it isn't funded with taxpayer dollars.

Enrollees pay hefty deductibles plus a premium, which is capped at 25 percent above the average cost of a similar health plan. Premiums cover less than half of the actual medical costs, however. The difference is made up with an assessment on insurance companies, which they pass on in premiums to individuals and businesses.

The year ahead will be critical for the state and insurers to convince young, healthy people that buying health insurance is a worthwhile investment.

While the federal government will kick in some money to help insurers absorb the increased medical costs to cover the sickest citizens, the funds will only be available for three years, and the amount decreases each year.

"We've assumed all along that some portion of people in MCHA would come to the individual market, but we've had to guess what that number would be," said Geoff Bartsh of Medica, the health plan that covers those in the state's high-risk pool. "The goal is to encourage as many people as possible to voluntarily choose to purchase in the individual market this first year. Many may find out it's a really good deal if they do."

MCHA's Erickson, a semiretired health care executive, aims to have as many people as possible working with brokers or buying on the MNsure exchange by the end of 2014.

"It'll all come together at some point, but it's unpredictable," said Erickson. "We have 26,000 people who will make 26,000 different decisions. I can't tell you where they'll go. No one can."

Devine, who works in medical billing, is grateful the state could throw her a lifeline after she was found to have late-stage breast cancer when she was 35. But her monthly premium of $343 is more than two-thirds of her condo payment, plus a $2,000 deductible. On the MNsure exchange, she will qualify for subsidies that might reduce her costs.

She looks forward to being in charge of her own health care choices.

"I can't wait to start it," she said. "I'm going to sign up right away."

Jackie Crosby • 612-673-7335