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Dayton announces profit cap for major health plans

The four major health plans doing business with the state have agreed to a 1 percent profit cap for 2011, Gov. Mark Dayton announced today.

Any additional profits this year will go back to the state, he said. And starting in 2012, the health plans will have to bid competitively for the state's business, a process Dayton imposed earlier this year.

The four health plans are: BlueCross BlueShield, HealthPartners, Medica and UCare.

UCare has also pledged a one-time $30 million contribution from its profits to the state in 2011.

Said Dayton: “I applaud UCare, HealthPartners, Medica, and BlueCross BlueShield for their civic responsibility in recognizing the State’s dire financial condition, and helping to reduce our rising health care costs. I thank them and Human Services Commissioner Lucinda Jesson for their outstanding leadership in working together to reach this agreement.”

Dayton's office said the health plans reported "collective profits of 3.8% made on its 2010 contracts for taxpayer-funded public health programs." Those profits had been 2.6% in 2009.

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Comments (1)

Joe and Doug,
It's interesting that UnitedHealthcare is not included in this agreement. UHC is the insurer for MCHA, the state's health plan for persons with preexisting conditions. I assume that capping rate increases translates to smaller increases for everyone except those with the state plan, because on July 1 MCHA rates are expected to increase 9.1%.
How is it that the governor can cut a deal for lower rates with private insurers but not with the state's own insurer of those with medical conditions, many of whom are in the most need for health care and have to pay higher rates?
What was UHC's profit in 2010? Would it agree to a 1% cap on rate increases for MCHA? Would it agree to give any additional profit to the state?
Shouldn't all Minnesotans with insurance benefit from this arrangement, not just those with employer-sponsored plans?