Strengthening Minnesota Health Care under Affordable Care Act

Protecting and Improving Affordable Care for Minnesota Families

Over 130,000 Minnesotans rely on MinnesotaCare each month for affordable, comprehensive health coverage. MinnesotaCare enrollees are parents and children in working families who lack access to affordable, employer-based health coverage. Individuals in all 87 counties in the state rely on MinnesotaCare for their health coverage.

Minnesota has a unique opportunity to preserve, expand and improve MinnesotaCare under the Affordable Care Act beginning in 2014. Under a provision of the health care law that is uniquely designed for our state,

Minnesota has the opportunity to extend affordable MinnesotaCare coverage to thousands of additional lower-income adults — and bring far more federal funds into Minnesota to pay for it. Under the Affordable Care Act, Minnesota can make critical improvements to MinnesotaCare:

• Expand comprehensive, affordable coverage to 120,000 Minnesota adults who earn 138-200% FPL (roughly $7 to $11 an hour for a two-parent, two-child family with both parents working full-time)

• Remove the in-patient hospital cap, waiting periods for coverage, and other barriers to care

• Ensure a seamless transition for individuals on MinnesotaCare into health reform in 2014

• Attract millions of federal funds, and stretch state dollars much farther than current MN Care program

• Ensure adequate reimbursement for Minnesota providers by avoiding growth in uncompensated care

It is important that lawmakers act quickly in 2013 to take advantage of this unique opportunity within the Affordable Care Act. Failure to act to preserve MinnesotaCare in 2013 could result in the elimination of this program. The elimination of MinnesotaCare would leave thousands of lower-income Minnesotans with only the health coverage options available on the Health Benefits Exchange, which are poorly designed for lower income people. Even with financial assistance that may be available, thousands of current MinnesotaCare adults and other low-income Minnesotans would end up underinsured or uninsured starting in 2014.

Here’s why. Without a MinnesotaCare program, lower-income adults without employer-sponsored coverage would face two choices in 2014. They could purchase coverage comparable in quality to MinnesotaCare (the “silver plan”) on the new Health Benefits Exchange, but at much higher cost. Parents currently covered by MinnesotaCare would see their monthly premiums double or triple if they purchased a “silver plan” on the Exchange. Alternatively, these individuals could opt for a high-deductible, catastrophic plan (“bronze plan”) which would offer a $0 monthly premium, but force them to pay up to 40% of the cost of health care services out of their own pockets. Out-of-pocket limits for catastrophic “bronze” plans are $12,700 for a family (!) — easily a third of total income for an individual in this income range.

State-funded vouchers (“wraparounds”) could partially offset these high prices, but do not guarantee coverage and would require substantial state funding. Analyses of family budgets indicate that lower-income individuals are most likely to choose the high-deductible, catastrophic plan because it is the only affordable option for their families. This choice would result in thousands of underinsured Minnesota families —leading to uneven access to care, increases in medical debt, financial stress on households, and significant increases in uncompensated care.

Minnesota should not eliminate affordable health coverage for working families in 2014. The Affordable Care Act offers a far better alternative, uniquely designed for states like Minnesota. Lawmakers can and should act in 2013 to preserve and improve MinnesotaCare under the AGA.

Preserve and Improve MinnesotaCare under the Affordable Care Act

Affordable Coverage — State Savings — Innovations in Care — Seamless Transition — Increased Federal Funds

November 21, 2012