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At Issue: Providing ‘pretty darn good coverage’

Published (4/10/2009)
By Patty Ostberg
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Adults covered under MinnesotaCare would be moved to private coverage under a bill sponsored by Rep. Steve Gottwalt (R-St. Cloud).

Called the “Healthy Minnesota Plan,” HF1865 would allow adults to enroll in their choice of individual health plans under contract with the Human Services Department. Plan services could cover up to $5 million in lifetime services that would include: eyewear coverage, maternity labor and delivery, dental coverage, prescriptions and preventive care.

“The intent of this plan is to provide MinnesotaCare level of benefits, and then some,” Gottwalt said, estimating the plan would cover about 84,000 adults now on public programs.

If a person doesn’t qualify for the program because of a pre-existing condition, they would be covered under the Minnesota Comprehensive Health Association. “A fairly sizable number of these people probably would end up in MCHA,” said Gottwalt.

By providing private coverage, the state would reduce its costs to ensure long-term stability for public programs and better benefits, Gottwalt said. In the long run, he said it could reduce state costs by an estimated $100 million per year.

The bill was approved March 25 by the House Health Care and Human Services Policy and Oversight Committee and now awaits action by the House Health Care and Human Services Finance Division. A companion, SF1735, sponsored by Sen. David Hann (R-Eden Prairie), awaits action by the Senate Health, Housing and Family Security Committee.

MinnesotaCare costs about $500 monthly per adult resulting in a state cost of about $6,000 a year, a number Gottwalt said is unsustainable. In the private market that would provide some “pretty darn good coverage.”

MinnesotaCare has a $10,000 inpatient maximum, while HMP would provide a $5 million lifetime maximum. Insurance for a healthy 55-year-old male would cost only about $237 a month, said Greg Sailer, president-elect of the Minnesota Association of Health Underwriters.

Under MCHA those rates go up about 25 percent, added Thomas Aslesen, the association’s director.

Under Gottwalt’s bill, the state would pay a deductible of up to $2,100. Once the enrollee has used that amount, they would be responsible for a $1,000 out-of-pocket deductible per year. The state and enrollees would also pay premiums on an income-based sliding fee schedule, just as with MinnesotaCare.

Enrollees could take more ownership in their health care by deciding where they want to spend the state-covered deductible. Because the plan would be their own health care coverage, they could take the plan with them into an employment situation where an employer could possibly pay a portion, Gottwalt said. In addition, because it would be a private plan, co-payment and deductible rates could be adjusted per individual.

Rep. Julie Bunn (DFL-Lake Elmo) questioned what would happen to an enrollee who is unable to pay the $1,000 deductible.

That is the current situation under MinnesotaCare with hospitals on the hook for those costs, Gottwalt said.

Public programs do not pay providers nearly enough to cover health care costs, and they get stuck with unpaid copayments and deductibles, he said. When costs go unpaid, cost-shifting occurs to others, perhaps making health care unaffordable.

Gottwalt added that many providers won’t see MinnesotaCare enrollees because they know they won’t be reimbursed enough. Cost-shifting could possibly be eliminated if providers know they will be reimbursed at commercial rates while creating more access for enrollees.

“Ultimately we ought to have a health care system where the public programs pay the providers the same as everybody else,” said Rep. Thomas Huntley (DFL-Duluth).

If the state pays higher rates for services in public programs, health plans should shift less cost onto consumers in private plans, added Rep. Paul Thissen (DFL-Mpls), the committee chairman.

Phil Griffin, representing PreferredOne and UCare Minnesota, said the differences in public programs have grown dramatically, noting that providers are already trying to deal with rising costs and struggling to continue current programs.

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