The fate of a key state program that provides health coverage to low-income Minnesotans appears uncertain as the state begins serious efforts to implement the federal health care reform law.
The program, called MinnesotaCare, provides subsidized insurance to about 130,000 of the state’s working poor. Aspects of the current program make it incompatible with higher standards included in federal health care reform, which many states will race to enact before the 2014 deadline.
Advocates for the poor are concerned that without MinnesotaCare or a similar state solution in place, those served by the program could fall through the cracks once its federal waiver runs out at the end of the year.
“It’s going to be a total surprise to people,” Liz Doyle, associate director at TakeAction Minnesota, a progressive grass-roots organization, said about the potential end to MinnesotaCare.
“On Jan. 1, 2014, we want to be celebrating … not scrambling to deal with the confusion or the public reaction to people waking up that morning and asking, ‘Where’s the good care I had?’ ”
The Legislature could choose to end the program entirely, replace it with a separate program or wait for further funding and guidance to establish a similar federal program on Minnesota’s health insurance exchange. It also could use state funds to provide support for people on the planned health care exchange.
Officials expect the state exchange — a key mechanism of federal reform — to serve about 1.2 million Minnesotans and help expand insurance coverage for individuals and small businesses while also reducing premiums. With a supportive Democratic governor, the new DFL majorities last week introduced fast-tracked health exchange legislation.
State health care programs — including MinnesotaCare, which celebrated its 20th anniversary last year — are intertwined with the complicated federal reforms.
Early in his term, Gov. Mark Dayton expanded Medicaid eligibility to people with higher incomes, and the state has the option of increasing that eligibility further. Many low-income people who earn too much to qualify for the state Medicaid program, called Medical Assistance, can obtain affordable coverage through MinnesotaCare.
U.S. Sen. Al Franken met with state lawmakers Friday to discuss a potential federal solution for people on MinnesotaCare. Healthcare-oriented lawmakers are still waiting on federal guidelines for the program, and time is running out for the Legislature to act.
“The way this is implemented in Minnesota is very important because the rest of the nation is looking at us,” Franken told reporters after the meeting. “My goal is to ensure that we continue in Minnesota to lead the nation in the value of health care that we deliver.”
Minnesota’s public health care system will become even more complicated once the exchange has been implemented. Here’s a short, rough primer:
• With Dayton’s executive order, single, childless adults who make up to 75 percent of the federal poverty level are eligible for Medicaid, and that number will likely increase to those making 138 percent of the guideline in 2014. Under current rules, a single person at the MA limit would earn about $8,000 a year.
• Dayton’s action moved some people from MinnesotaCare to Medicaid and also secured significant federal funding.
• The state health insurance exchange, which received conditional federal approval in late December, provides additional subsidies for Minnesotans but also complicates the state health-care landscape.
• Minnesotans who earn up to 400 percent of the poverty level are eligible for a federal subsidy on the exchange. Advocates like TakeAction are most concerned about what will happen to MinnesotaCare enrollees between 138 percent (after the Medicaid drop-off) and between 200 and 275 percent of the federal limit. Those percentages represent varying levels of eligibility for the different populations on MinnesotaCare.
Preserving MinnesotaCare model
Doyle at TakeAction wants to preserve the model established by MinnesotaCare, rather than have unprepared low-income Minnesotans who are used to public programs deal with the private health indisutry through the exchange, especially if it comes as a surprise.
“Most people don’t know that this is out there,” she said. “That’s a shocking piece of information to people. The word has not gotten out there broadly.”
DFL Sen. Tony Lourey, Senate Health and Human Services Committee chairman, agreed that addressing the MinnesotaCare issue is a key concern.
“I really don’t think that putting low-income populations on the private market to fend for themselves is a wise policy decision,” Lourey said in an interview. “That concern is shared by me.”
A GOP-led effort to use vouchers in lieu of public health offerings serves as a microcosm of the difficulties many would face in switching programs. The pilot plan has seen slow beginnings.
The intricacies of any changeover are difficult to predict. Federal guidelines have been slow to appear, for example, and Republicans worked to slow federal reform implementation until the November elections.
Nobody can say for sure at this point what’s going to happen, said Mary Krinkie, a lobbyist for the Minnesota Hospital Association.
Doyle outlined a number of options beyond the basic exchange that could match the work MinnesotaCare does now.
Perhaps the most promising option for progressives like TakeAction is a Basic Health Program, a federally subsidized option that doesn’t force low-income people and families directly onto the exchange.
Some estimates show 195,000 people could be eligible for such a program, which would operate a lot like MinnesotaCare for those earning 138 percent to 200 percent of the poverty level.
“It looks a lot like something that would move the MinnesotaCare population forward,” Lourey said.
The state also could offer so-called “wraparounds” that would provide additional benefits beyond the flat exchange subsidies — perhaps up to the standards of a Basic Health Program. Phillip Cryan, who works with SEIU Healthcare Minnesota and serves on the exchange advisory task force, said state subsidies would be a less desirable option.
The funding for state wraparounds, for example, could be subject to the whim of individual Legislatures each budget cycle, he said. That sort of rollercoaster funding would be difficult to navigate biennium to biennium.
But the most distasteful option would be putting the working poor on the basic exchange. Doyle said individuals and families seeking comparable coverage to MinnesotaCare would likely face inflated premiums – potentially three times higher than now. The most basic, or “bronze” plan on the exchange, would be coverage for catastrophic health care.
Doyle, who refers to the basic exchange option as the “bronze trap,” called it a “looming untold crisis in the health care system” because of the high deductibles it could force onto Minnesotans with currently adequate coverage.
Corey Lloyd, who depends on MinnesotaCare for access to the insulin he needs to control his Type 2 Diabetes, just hopes things don’t change too drastically.
“It really, truly has helped me out tremendously. It has helped my family out,” said Lloyd, who pays about $80 a month for his premium and works multiple jobs. “It keeps me healthy.”
“I love MinnesotaCare,” he said. “I don’t know what I would do without MinnesotaCare.”
Waiting on the feds
With all the options on the table and the lack of information available to state officials, nothing is certain for now.
It’s unclear, for example, how easy it will be for state lawmakers to meet key federal guidelines this session to implement the exchange, let alone design subsidiary health programs and preserve benefits.
Update: Human Services Commissioner Lucinda Jesson spoke with MinnPost on Tuesday to update how she’s moving forward on the MinnesotaCare population.
Jesson said she met with officials in Washington last week to press the federal government for Basic Health Program funding and flexibility to continue and improve on MinnesotaCare. The state hasn’t received guidance, “so we’ve got to push forward now,” she said.
“I want these dollars to continue funding MinnesotaCare,” Jesson said.
Lourey said state lawmakers need the regulations by the February budget forecast, and Franken’s visit last week suggests lawmakers are leaning toward the BHP option.
“The feds said we can do this, but we don’t have what we need to actually put it on our books and build our spreadsheets around it, and that’s what we do around here,” he said.
“We’re going to get that soon,” Lourey added, referring to the federal guidance. “It’s a full-court press from Minnesota. Our federal delegation, our administration, our legislative colleagues … [are working on it]. Honestly, if the Affordable Care Act is going to work in Minnesota — and it has to — we need some of the framework around what this is going to look like.”
Advocates Cryan and Doyle, and Jesson herself, note the executive branch’s intention to move forward with improving care.
“We need to continue to provide assistance to all people in that near-poor [category], and we really need to look at and figure out how we continue the important work of MinnesotaCare,” Jesson said.
Lourey, who is the key exchange architect in the Senate, said he also plans to introduce legislation that would implement a Basic Health Program. The exchange bill will be heard in the Senate this week.
“It is of great interest to me and to many in the state of Minnesota,” Lourey said. “It would be a real shame to not put some type of package together that looks like MinnesotaCare.”