Divided Task Force Recommends Expanding Minnesota Health Care Program

Published February 25, 2016

The Minnesota Health Care Task Force is recommending the State Legislature enact up to 33 policies expanding public funding of health insurance in its current session, which lasts from March to May.

The task force approved the recommendations in January by a vote of 20–5, with four members abstaining.

The task force proposals include expanding MinnesotaCare coverage from 200 percent of the federal poverty line (FPL) to 275 percent. MinnesotaCare is a public health care program “funded by a state tax on Minnesota hospitals and health care providers, federal Medicaid funds and enrollee premiums,” according to its website. If lawmakers accept this recommendation, individuals making $32,368 annually, or a family of four making $66,688 annually, would become eligible.

The task force also called for removal of the sunset clause from the state’s 2 percent medical provider tax, which currently funds MNsure, the state-run Obamacare health insurance exchange. The tax currently brings in an estimated $1.5 billion every two years and is set to expire in 2019.

Expert Dissents

The 29-member task force includes seven appointees by Minnesota House and Senate Republicans, plus 22 chosen by Gov. Mark Dayton (D), members of Dayton’s cabinet, and Minnesota House and Senate Democrats.

Peter Nelson, director of public policy at the Center of the American Experiment, a Minnesota-based free-market think tank, voted against the recommendations.

“My goal for the task force was to try to create opportunities for people who are right now on a public health program to have the opportunity to buy private coverage in the marketplace, and that was rejected,” said Nelson.

Nelson says increasing MinnesotaCare coverage to 275 percent of FPL will prevent more people from being able to buy private insurance.

“We are the only state currently with a basic health plan, and what that means is that we basically have a Medicaid program that runs all the way to up 200 percent of the federal poverty guideline,” Nelson said. “People under 200 percent of the federal poverty guideline … if they want help in buying health insurance, they can’t buy private coverage in Minnesota.”

Nelson says Minnesota should adopt a system that allows individuals making between 138 and 200 FPL to buy health insurance in the private marketplace, which is similar to what other states permit.

“My vision for Minnesota has been basically to replace MNsure with some other, simpler mechanism,” Nelson said. “If you create a tool that’s limited to qualifying people for tax credits when they buy insurance, you can offer the tax credits without upsetting anything in the insurance marketplace.”

‘Bad Budgeting’

Nelson also opposed the task force’s recommendation to remove the sunset clause from the medical provider tax that currently funds MNsure, because that tax revenue is separated from the regular budget and can be easily abused.

“There is no reason to set apart our healthcare programs,” said Nelson. “It’s just bad budgeting; it’s not transparent; and there’s no way the average citizen can understand the budget when you set up these separate funds.”

Keeping the State Exchange

Nelson says he approves of the task force’s recommendation to retain the state health insurance exchange, MNsure, because the only way Minnesota could transition to the federal exchange would be to get rid of MinnesotaCare, which is functionally incompatible with HealthCare.gov.

Nelson says transitioning to the federal exchange would be bad for Minnesota if the federal government enacts policies undermining competition in the exchange marketplace.

Nelson says if the insurance exchange remains state-run, “it may leave us with more health care freedom in that marketplace than in the State of Texas,” which is on the federal exchange.

Keegan D’Alfonso ([email protected]) writes from Cedarville, Ohio.

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