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Did Dayton pick ‘winners, losers’ with his health care decision?

The switch to the new law is essential as a transition from a “broken market” to a “fair market,” says economist Jonathan Gruber, a MNsure consultant.

MIT economist Jonathan Gruber: “Some people are going to pay more, [such as healthy people who] benefited from existing discrimination in insurance markets.”
REUTERS/Brian Snyder

So, is Gov. Mark Dayton choosing winners and losers with his decision Monday not to implement President Obama’s administrative “fix”?

The answer, of course, depends to a large extent on the person asked.

Obama’s “fix” gave states the flexibility to allow those with substandard health insurance to keep their plans for a year, but Dayton opted not to take that route after hearing opposition from health plan providers.

Jonathan Gruber, an MIT economist who did modeling for MNsure, said there are some losers because of the new Affordable Care Act, but all the new people who will get coverage outweigh that distinction.

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“There are some people who will be losers, but they’ll be vastly outnumbered by the winners,” Gruber said.

As Gruber has noted in the past, he said it’s important to look at the intent behind the new law. The goal, he said, was to pass fair insurance pricing so the sick and healthy pay the same thing for coverage.

“By definition, some people are going to pay more,” Gruber said, such as healthy people who “benefited from existing discrimination in insurance markets.”

“That’s not a bug — that’s a feature,” he said of healthy people paying more, and the transition from a “broken market” to a “fair market.”

Gruber also pointed out that people whose coverage changed under the new standards aren’t “pure losers” because they’re getting more benefits in return.

He acknowledged the situation of a 50-year-old man who doesn’t need maternity care but has to pay for it. But, Gruber added, perhaps that man might need mental health coverage in the future, which is also a new standard under the law. There has to be an essential set of benefits to end discrimination in the market, he said.

GOP Sen. Michelle Benson, a legislative health reform expert, said Republican fears are about the president’s health reform efforts are turning out to be true.

“I think long-term the losers are the people of Minnesota,” she said. “We knew people were going to lose their health insurance since the ACA was written.”

“All of the bad things we said were going to happen are happening,” she added.

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Last week, Dayton praised President Barack Obama for putting forward an administrative “fix” that would allow people with substandard health insurance to keep their plans for a year.

But on Monday, after hearing concerns from Minnesota’s major health insurers, the governor reversed course and said the state wouldn’t implement the optional reprieve.

In agreeing that re-instating policies that no longer exist would be practically impossible for insurers, the governor said he also believes that the move would “likely cause more expensive health coverage for Minnesotans.” Dayton also praised the additional consumer safeguards the new coverage would provide.

Minnesotans would likely have to pay higher premiums if the fix went forward, the plans said, because it would skew risk in the market.

So, things are back to the way they were. Obama’s contentious announcement won’t affect Minnesota. But some Minnesotans will have to pay more anyway, and that was apparent from the beginning.

More than 140,000 Minnesotans recently were notified that their coverage was changing because of the higher standards of the Affordable Care Act, and the new standards would likely cost more.