651-645-0099

 

 

 

 

October, 29, 2024

Governor Tim Walz
75 Rev Dr Martin Luther King Jr Boulevard #130
St Paul, MN 55155

Dear Governor Walz,

The Minnesota Council of Health Plans and our local nonprofit health plan members—Blue Cross and Blue Shield of Minnesota, HealthPartners, Medica, Sanford Health Plan of Minnesota, and UCare—are committed to ensuring Minnesotans have access to affordable health care. The Council supported the creation of the Minnesota Premium Security Plan (“reinsurance”), which led to a stable, much more affordable marketplace for Minnesotans. Reinsurance, combined with enhanced federal subsidies, has supported a record number of Minnesotans in finding affordable coverage. However, both programs are scheduled to sunset in 2026. Without action, this “double whammy” will result in a record number of Minnesotans losing coverage. I am therefore writing to urge that your FY 2025-26 Budget Recommendations prevent tens of thousands of Minnesotans from losing coverage by funding, extending, and building upon these successful state programs.

The Council has a decades-long track record of working with policymakers to find solutions to complex problems. The Council was instrumental in creating MinnesotaCare in the 1990s and was a key partner in the successful implementation of the ACA and the creation of MNsure in the 2010s. Consistent with our goal of providing accurate data to support informed decision-making, the Council recently commissioned RAND Health Care to estimate the impact of sunsetting enhanced subsidies and reinsurance, as well as to explore ways to mitigate that impact. When enhanced federal subsidies were first adopted, MNsure estimated that this policy alone saved Minnesota families an average of $684 per year in 2022. One MNsure scenario modeled the impact on a Mankato family of two with a $72,000 income as losing eligibility for a $1,192 monthly credit. Reinsurance lowers premiums by about 20% on average from what they would have been otherwise. RAND found that without action, premiums will dramatically increase, and as many as 93,000 Minnesotans will find coverage unaffordable and become uninsured.

The Council started exploring supplemental policies and even alternative approaches to reinsurance as part of the RAND study. Much more work needs to be done, however, to ensure major policy choices are made with known impacts. While we continue our work on vetting longer-term policies, reinsurance remains the only proven, timely solution available to head off what will otherwise be catastrophic 2026 cost increases for many Minnesotans. Transfers of $276 million in 2023 and $8.83 million in 2024 out of the Premium Security Account, effectively zeroed out funding for a program authorized to run through 2027. Minnesotans who purchase their own health insurance coverage, like many farmers, entrepreneurs, small business owners, daycare providers, and early retirees, need your leadership and support to restore this funding and avoid a catastrophic increase in costs for plan year 2026.

The timing of legislative action is critically important, as our organizations are required to file 2026 rates with the Minnesota Department of Commerce in late spring and request action on this issue before March 1, 2025. Taking swift action will provide continued financial relief to Minnesotans and avoid alarming increases in their health insurance costs and the number of uninsured Minnesotans.

Sincerely,


Lucas Nesse, President and CEO

So far in 2018, we’ve been to see a doctor or others who provide care more than 13 million times. We’ve been admitted to the hospital about 124,000 times, spending nearly 600,000 days hospitalized. While the number of visits, hospital admissions and length of time we were hospitalized are all down on average compared to this time last year, the amount we spent on that care is up about 1 percent. How does this compare to care in previous years, take a look.

 

The Minnesota Council of Health Plans announced today its member companies paid $24.9 billion in medical bills on behalf of 4.9 million people in 2017. Per person, those bills were up 3 percent on average over the previous year.

Unlike large for-profit insurance companies, the Council’s seven members do not have shareholders so their revenues stay in the community. In aggregate, they collected total premium revenue of $27.6 billion for an operating gain of 0.8 percent of revenue. After including income from investments, the insurers placed $307.9 million in medical reserves to pay for future medical bills.

More people in the region enrolled in employer-based group and public insurance in 2017. Enrollment in:

Enrollment in MinnesotaCare dropped 3 percent, and enrollment decreased 2 percent in coverage where employers hire insurers to manage the plan, but employers use their own funds, not insurer’s, to pay medical bills.

“As care gets more expensive, people are doing whatever they can to find the best possible options to care for themselves and their families. For 2017, a lot of people switched between employer group and individual health insurance or the other way around,” said Jim Schowalter, president of the Council.

“More public policy changes in St. Paul or Washington, D.C., could easily lead Minnesotans to switch again, causing real difficulties for people. The constant shuffle of how medical bills get paid makes it harder for all of us to plan for the future.”

In Minnesota, premiums fully pay expenses for those buying their own insurance, but fewer Minnesotans enroll

While employer-based and public health insurance grew in 2017, fewer Minnesotans bought health insurance on their own than the year before. Enrollment was 151,364 at the end of 2017, down 35 percent from the previous December. And unlike other kinds of insurance where medical bills per person increased on average in 2017, people in this group saw their medical bills drop by an average of 15 percent per person.
For the first time since 2013, monthly premium revenue fully offset medical bills and other expenses for Minnesotans who bought their own health insurance. In comparison to previous years where combined losses ranged from 19 to 33 percent of premium revenue, the unpredictability in 2017 led to a 16 percent gain of $157 million across all insurers.

“The fluctuation between unsustainable losses and unexpected gains shows how important Minnesota lawmakers’ quick work on reinsurance was last year to help create calm for 2018,” Schowalter said. “Monthly premiums remained steady this year in part because the new reinsurance program makes it easier to predict medical spending.

“State actions helped Minnesota stabilize 2018 insurance options, but like many other states, policy decisions from Washington, D.C., mean we have lots of bumps still ahead.”

Expenses higher than payments for Medicaid, other public insurance in Minnesota
Medical bills for Minnesotans who get care through state programs totaled $5.7 billion last year, including Medicaid, MinnesotaCare, Minnesota Senior Health Options, Minnesota Senior Care Plus and Special Needs BasicCare. Enrollment reached nearly 870,000. Council member companies received $6.2 billion in payments and after all expenses had losses of $79 million, (-1 percent of revenue) cross all state-supported insurance.

When looking exclusively at Medicaid and MinnesotaCare for children and families, expenses were more than revenue for the second year. Losses were $146 million (-4 percent of revenue.) These numbers recognize known revenue and expenses for 2017 contracts.