Minnesotans who have put up with confusing information and skyrocketing premiums are at the mercy of negotiations with the federal government.

Statement by the Minnesota Council of Health Plans on the state’s effort to lower premiums for people who buy their own health insurance policies

“Like many Minnesotans, I am deeply concerned about recent events that created new, unexpected hurdles as the state works to lower premiums for people who buy health insurance on their own. Without federal approval for what’s called a 1332 waiver, these Minnesotans will pay about 20 percent more for their policies than necessary.

Unfortunately, despite concerted effort, we are extremely late in the process and still without the clear federal approval required by state law. The state is in a difficult position. Formal federal approval is still missing and government employees suggest that that approval of the waiver means cuts to MinnesotaCare funding.

We are just more than a week away from when rates are scheduled to be announced and letters get mailed to current policyholders. Until all contingencies are understood and resolved, waiver rates won’t be final. Minnesotans who’ve been at the center of confusing information and skyrocketing premiums are now at the mercy of negotiations with the federal government.

Regarding MinnesotaCare, we supported reinsurance as a practical step to reduce premiums and ensure options for people buying insurance on their own. At no point was it considered as a transfer of federal effort from the state’s MinnesotaCare program. Minnesota’s insurers did not seek the waiver to reduce federal spending, but instead, to slow our community’s rising insurance premiums and stabilize options for Minnesotans. We still hope for approval of the state’s waiver request without any strings attached.”

-Jim Schowalter, president of the Minnesota Council of Health Plans

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Be aware of mental health care needs 24/7

As Mental Health Month comes to an end the work to improve our mental health and overall well being continues.

Unfortunately, stigma, shame, misinformation and misunderstanding surrounding mental health still exist. It stops people for getting help. It affects how we see people who have mental illness. And it limits how we talk about mental illness and wellness, further isolating people with the disease.

Here are some programs and ideas to help you better understand mental illness. Take a look and share with your friends.

Hilarious World of Depression. This podcast is about depression. And laughs. From its website: Depression is an incredibly common and isolating disease experienced by millions, yet often stigmatized by society. The Hilarious World of Depression is a series of frank, moving, and, yes, funny conversations with top comedians who have dealt with this disease, hosted by veteran humorist and public radio host John Moe. If you have not met the disease personally, it’s almost certain that someone you know has, whether it’s a friend, family member, colleague, or neighbor. Depression is a vicious cycle of solitude and stigma that leaves people miserable and sometimes dead. Frankly, we’re not going to put up with that anymore.


Make It OK. This campaign increases public awareness of helpful mental health care by helping people to talk more openly about mental health.

The 45-minute Make It OK presentation provides helpful, simple tips for talking friends and family members. In addition to taking the pledge, you can learn more about reducing stigma.


Mental Health First Aid© (MHFA.) This in-person training for youth and adults teaches how to assist people who are in crisis or are at risk of developing a mental illness. This eight-hour course teaches how to identify signs of addiction and mental illness, and how to evaluate the situation and provide help.

MHFA also gives people who take the course connections to local professionals who can help


Psychological First Aid (PFA.) Take the course used by first-responders and others to help children and adults experiencing immediate mental trauma. This trauma can come from violence, public health emergency, disaster or other event.

PFA is sponsored by the Minnesota Department of Health Office of Emergency Preparedness. You can take the course as a six-hour interactive online course or use the online manual.


Question, Persuade, Refer (QPR.)  These three simple steps  can help prevent suicide. Just as people trained in CPR and the Heimlich Maneuver help save thousands of lives each year, people trained in QPR learn how to recognize the warning signs of a suicide crisis. QHR also teaches you how to question, persuade and refer someone to help.

Learn QPR in an hour at QPR’s website.


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ACOs build toward the future

What happens when you realize doctors and insurers, patients and employers are all on the same side? Great care that’s less expensive.


Read how an ACO pioneer is reinventing care for Minnesotans.


Taking health care personally
When you ask an insurance company vice president about the benefits of accountable care organizations, or ACOs, you expect to hear talking points and impressive figures. But Christine Finn, vice president of sales communications at Medica, says something unexpected. “I belong to an ACO,” she says. “When I go to the doctor, all my records are in one place — I don’t have to say the same thing over and over.” If you’ve ever filled out the same form in a new doctor’s office for the umpteenth time — and chances are you have — you’ll understand why simply not repeating yourself makes such a huge difference.

Chris Finn, Medica

Ken Horstman, University of Minnesota

Lisa Span, Medica


Chris has responsibility for sales communications at Medica, but she talks about her ACO from a patient’s perspective. That’s as it should be, she explains. “The accountability in ‘accountable care’ is something we take personally,” says Chris. “Medica, with our health care provider partners, takes accountability for driving improvements in health care that affect our members. Including me.”

Today, nearly 50,000 receive their health care through one of six ACO networks and eight leading health systems — Altru, Essentia Health, HealthEast, Fairview, Mayo Clinic Health System, North Memorial, Park Nicollet and Ridgeview Community Network.


Starting from common ground
The basic principles of accountable care organizations, like Medica’s, are easy to understand. First, ACOs assume that insurers, employers, medical professionals and patients can and do want to achieve better medical results at lower prices. With that fundamental agreement in mind, ACOs set up payment structures that reward quality and efficient care — then pass any resulting savings on to everybody involved.
“Medica was the first health plan in the region to align with a health system to develop an ACO,” says Chris. Back in 2012, Medica’s partnership with Fairview Health Services was innovative and market-leading. Medica’s partnership with Fairview was so successful that the insurer decided to double down on the collaborative model.
“By now,” Chris says, “we’ve had ACOs in place long enough to prove they’re delivering meaningful improvements.” Members enrolled in ACOs average:

  • a 12 percent increase in the use of preventative services
  • nearly 14 percent fewer ER visits
  • 16 percent fewer hospital admissions
  • increased use of affordable generic medications

“We’re not just giving lip service to efficiency. With our ACO partners, we’re keeping people healthier, for less.” How much less?


Employers who choose ACOs are spending up to 15 percent less than they would with broad-network plans and employees enroll year-after-year. That’s how ACOs quickly became one of Medica’s most popular health insurance options.


Better care for less
Better care for less sounded like a very good bargain to large employers, for whom health insurance is a massive and growing expense. The University of Minnesota, one of the best research institutions in the nation and the world, is also the state’s sixth-largest employer.


“When ACOs came along a few years ago, we saw them as a way to address care and cost all in one package,” says Ken Horstman, the university’s senior director for total compensation.


But the ACO model could be a challenge for University employees to accept. Like many other Minnesotans, U of M employees had been accustomed to “open-access” policies, which let them see any doctor or hospital they preferred, and enrolling in an ACO plan would mean choosing from a smaller selection of in-network care providers. “We did not know what the first-year experience would be,” Ken says, “but 95 percent of the employees who chose the ACO plan stayed in it the next year.”
Employees liked it, and the University did too. “After the first year,” Ken recalls, “we looked at the utilization experience, risk reduction and average medical cost for employees and families who’d switched into an ACO and compared it with their experience from the year before, under a broad-network plan. The same employees, on average, had lower costs with the ACO.”


With results like those, Ken and his colleagues decided to encourage even more university employees to join ACOs. “We’ve made a commitment that we’re going to support more of the overall premium for our employees who choose ACO plans,” he says, “in the belief that members’ experience with the ACO will continue to be positive and that their overall health will be supported.” This year, about 15 percent of the 38,000 people insured through the University are enrolled in ACO networks, and Ken anticipates that more will make the leap as time goes by.


Like Chris Finn, Ken knows the benefits of ACOs from personal experience. “I took my family into the ACO this year,” he says. “I got a call from my clinic and from an ACO representative to encourage us to stay in touch if we had questions. My son got a call from them saying that they’d noticed a gap in care for his asthma, and offered to help him get that taken care of.” Before joining the ACO, Ken observes with delight, “the only time we ever got a call from a clinic ever at our house, it was from our dog’s vet! This was the first time I’d ever received a call from a medical provider without asking for it.”


The benefits of partnership
Why are Medica’s ACO partnerships working so well? Better health care happens when you start from the assumption that everybody — employees and their employers, doctors and nurses, hospitals and insurers — is on the side of wellbeing. For insurers and health care providers, traditionally at odds, that shift to agreement has been particularly fruitful.
“I love this work because we’re coming at it with a new mentality,” says Lisa Spann, Medica’s director of market and product efficiencies. “We’re not going into it with our traditional mindset. Instead of looking at health care from an insurer’s perspective, we sit down together with providers. By having these conversations together, the dialogue shifts. We start asking, ‘How would our members experience this? What really matters to them?’ The ACO is more than just a new model for reimbursing providers,” she adds. “It enables real creativity.”


Lisa’s work brings her into contact with Medica’s six ACO partners every day, so she understands the difficulties — and the rewards — of crossing old institutional boundaries to put wellbeing first. When she thinks about the future of health care in Minnesota and beyond, she sees challenges. “There’s a long way to go,” Lisa admits. “But we’re tackling the first step. We’re creating infrastructure between payer and provider, and establishing real trust. Once we’ve got that, we can tackle any problem.”

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State’s insurance premium subsidy program a reality

Eligible Minnesotans who buy health insurance on their own see discounts now … Most Minnesotans who buy health insurance on their own are now paying 25 percent less in monthly premiums, thanks to the Premium Subsidy Program law passed by the Minnesota Legislature and signed into law by Governor Dayton. Throughout 2017, the state is picking up 25 percent of the premium for eligible Minnesotans.

The discount starts when the individual’s 2017 policy became effective. Policyholders with Blue Plus, HealthPartners, Medica and PreferredOne are seeing the discount in what they owe in May. People with UCare insurance saw their first discount in April.

Jim Schowalter, president of the Council of Health Plans said, “In just a few months, the legislation has gone from idea to reality. Local insurers have done the programming and changed the bills so the state’s premium assistance goes to help Minnesotans.”

People who buy health insurance on their own do not have to do anything to get the discount; the health insurer automatically includes it for people who are eligible. In some cases, the credit from the discount is more than the amount owed for May. If that happens, no payment is needed and no money will be withdrawn from the accounts of people who pay with electronic funds transfer. People who use automated bill pay through their personal bank will want to change the scheduled payment to match the balance due.

People who already get federal help paying their premiums or get insurance through Medicaid, MinnesotaCare or Medicare aren’t eligible for this state help.

The Premium Subsidy Program is managed by the state’s health insurers on behalf of the State of Minnesota. Rules for administering the program were developed by Minnesota Management and Budget and reviews will be completed by the State’s Legislative Auditor. Health insurers are doing the programming and logistics for their policyholders on behalf of the state. This program lasts throughout calendar year 2017.

Here is the latest information on the state’s 2017 premium subsidy and 2018 reinsurance programs.

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Local health insurers report operating losses over $680 million


Minnesota health insurers reported $687 million in operating losses for 2016, according to information released today by the Minnesota Council of Health Plans. Medical reserves were tapped to pay for doctor visits, nursing, hospital stays, medications and other care.

Download a PDF of the news release here.

By law, insurance companies and HMOs file yearly financial reports March 1 and April 1. The Council’s analysis combines data from the two reports and adds numbers from people who get insurance from large employers. These data provide the most complete and up-to-date picture available on health insurance in Minnesota.

“While information throughout last year pointed to some financial problems, $687 million is a much bigger number than I expected,” said Jim Schowalter, Council president. “Yet our medical bills got paid.”

Overall, revenue from premiums increased 4 percent over the prior year to nearly $25.9 billion, while expenses increased 6 percent to $26.6 billion. State public programs accounted for more than half of the overall red ink, followed by continued losses in the individual market. Insurance employers provide remained steady. On average, health insurers paid $763 per second for care. To pay those bills, insurers withdrew nearly $560 million from state-mandated medical reserves.

Gap between premiums, expenses remains for Minnesotans who buy health insurance on their own
For the third straight year, premiums fell short of expenses for Minnesotans who do not get insurance through work or government-supported programs like Medicare or Medicaid. In 2016, individual market expenses were $275.3 million more than premiums paid. This loss was reduced to $222.7 million through federal help that pays some big medical bills. That help ended for 2017, making this the first year that premiums had to include all expected medical expenses. The number of Minnesotans who bought health insurance on their own last year decreased 18 percent. On Dec. 31, 2016, about 4 percent of Minnesotans or 236,824 people bought policies directly.

Medical reserves pay $374 million in care for Minnesotans with public insurance
Expenses for people in state-funded health insurance exceeded revenue as well. Payments from the state for care needed by children and families ended the year $356.7 million short of expenses. Other state-supported insurance for people who are disabled or elderly and need extra help increased the shortfall by $17.4 million.

For 2016, the Minnesota Department of Human Services (DHS) changed how it bought health insurance for children and families, announcing $450 million in savings through competitive bidding. In the new contracting arrangement, health insurers hired by the state continued to be responsible for all expenses as in the past, but 2016 payments from DHS fell far short of paying expenses.

“The state wanted to save money and it did,” said Schowalter. “The aim for the future should be working together so that taxpayers, businesses owners, individuals—whomever is paying the bill—saves money, too. Those savings require finding ways to reduce the actual expense of care we need.”

Results drive past, future decisions effecting 4.8 million people
Numbers released today provide the context for difficult decisions of the past year that effected both Minnesotans who buy insurance on their own and those who get it with help from the state.

Schowalter cited fewer choices for individuals when choosing insurance, painful 2017 premium increases, and longer drives to get care for some Minnesotans. These changes prompted action at the beginning of the year by Gov. Dayton and legislators to pay 25 percent of the premium for many people who are buying insurance on their own in 2017 and take steps to help ensure these Minnesotans can get insurance and care closer to home in 2018.

While decisions coming from St. Paul and Washington, D.C., may still affect 2018 health insurance for some Minnesotans, employer-sponsored insurance for more than 3.2 million people is expected to be less effected. Employer insurance was the first to benefit from payment changes that reward well being over the number of tests or procedures done. They have also experienced the success of partnerships with high-value networks of hospitals and clinics, as well as insurers’ support of start-ups that offer new ways to get people the care they need. Health insurers are using what they learned from work with employers to make excellent care less expensive for all 4.8 million they serve, no matter who pays the medical bills.

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Show Me the Numbers—audits of health insurer filings and reports

By law, insurance companies file year-end reports on March 1 and April 1. Like financial reports prepared by governments and businesses, health insurers’ statements are audited, regulated by law and are completed using standard accounting practices. The standards, rules and definitions come from the Financial Accounting Standards Board, National Association of Insurance Commissioners and the State of Minnesota. All the oversight and rules are to make sure the information is consistent over time and across organizations.

There is a huge penalty for any false information in filings. A company’s chief financial officer and chief executive officer must attest that the numbers are right. If false numbers are published, the company’s lead finance person could be put in jail. Literally put in jail.

We sometimes hear from people who doubt that all the money is shown in these reports. As a result, there are several additional audits to look over the shoulder of the insurer’s own accountants and outside auditors. There are different kinds of reviews used for different purposes.

Our April 2016 summary is here. Other organizations—both public and private—analyze the data, too. You’ll probably hear about some of those reports later in the year and into 2018 and 2019.

In the end, money paid to insurers pays medical bills. There are a lot of ways to compare how insurers pay for care, who gets paid and how much they get. The bottom line is still the same: our premiums are expensive because care is expensive.

-Eileen Smith

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