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MinnesotaCare “Buy-in” Analysis

How does it compare to policies I buy on my own now?
Gov. Dayton’s  proposal has more in common with private health insurance than with MinnesotaCare as we know it. Here’s a quick comparison:

 

 

 

 

 

 

 

 

 

 

 

Does it add competition?
The state is not creating new competition for insurers—it’s changing the rules on how much doctors, hospitals and clinics get paid for giving care. Payment rates for your doctor, clinic and hospital services would be set by the state. In the most recent proposal, payments would be paid at Medicare rates, which are about 40 percent less than what private insurance pays.
How much less will my hospital or clinic get paid?

Asking doctors and hospitals to accept lower fees will make it even harder for people to get the care they need. The best clinic in the world can’t help you if you can’t get an appointment there. The public option assumes people who provide care will take lower payments—without increasing their prices for patients who get their health insurance through work. History suggests that this isn’t likely.

Will the buy-in make care less expensive for all Minnesotans?

Mandating lower prices for some people will make premiums more expensive for everyone else. There’s a lot we don’t know about the proposed public option, and the Council is committed to helping fill in the details. In doing so, we need to make sure the proposal brings health care within reach for all Minnesotans.

How is the Council analyzing the proposal?

 

 

We started with a few questions:

 

  1. Who will sign up? The effect of the proposal depends on how many people sign up. Will it be just Minnesotans who buy their own insurance right now, or will people who now get insurance through work sign up as well?
  2. Who will take on the expense? The goal is to lower the premiums people pay each month to bring care within reach. Will people who sign up for the new program pay enough in premiums to cover their medical bills, or will the expense be passed on to other Minnesotans?
  3. How will it work over time? Changes in health care often have unanticipated consequences. How will the public insurance option evolve over time?
What did the expert insurance analysts find?

The buy-in is set up to pay lower rates for care. Historically, doctors adjust what patients who get insurance through work pay to make up for it.

The proposed program assumes that the people who provide care will take lower payments— without increasing their prices for patients who get their health insurance through work. The table below shows three scenarios of who signs up for the public option and how much payments to doctors, hospitals and clinics go down because the state pays like Medicare.

Do you know how much my premiums would go up?

The answer depends how many people sign up with the state.

If just people who buy their own insurance now sign up, payments to doctors, clinics and hospitals nearly $700 million each year. If people who provide care do not absorb those expenses, premiums would go up for everyone else in the state—about $500 for a family of four. As more people buy from the state, premiums people pay through work will go up even more. Here’s what would happen to premiums:

Where can I get more information?

What we don’t know

How will the state set monthly premiums for the new public option? Premiums are set based on people’s age, how expensive care is in the area where they live, and how much their insurance policy requires them to pay out of pocket (the so-called “actuarial value” of a policy, with labels like Gold and Silver). What formula will the state use to set premiums?

What prices will people pay for prescriptions? Laws don’t let states to use their Medicaid discount to pay for the medications who don’t have Medicaid. What drug prices will people in the new public option pay?

How will people pay the out-of-pocket part of their medical bills? The proposal offers Silver and Gold policies. By law, Silver requires people to pay about 30 percent of their medical bills on average; for Gold policies individuals pay 20 percent. The state proposal isn’t clear if the individual would pay deductibles, copays or other options.