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Feds want to give and take Minnesota health care money

Minnesota Human Services Commissioner Emily Johnson Piper said on Wednesday, Sept. 20, 2017, if federal officials cut their contributions to the MinnesotaCare insurance program that farmers and others in greater Minnesota will be hurt. Don Davis / Forum News Service1 / 2
Minnesota must get answers from the federal government immediately to avoid problems for residents who buy individual health insurance policies, MNsure CEO Allison O'Toole said Wednesday, Sept. 20, 2017. With her is Gov. Mark Dayton. Don Davis / Forum News Service2 / 2

ST. PAUL — Federal officials appear ready to approve Minnesota's request for money that would lower individual health insurance premiums, but at the same time take money away from the MinnesotaCare state-subsidized insurance program for the poor.

If Trump administration officials do as they have told state officials, Minnesota would get $208 million in federal money to subsidize insurance premiums. But Gov. Mark Dayton said Wednesday, Sept. 20, that late last week his office was informed that at the same time Washington would cut $369 million over two years from the MinnCare program that provides health insurance at a reduced cost for the state's working poor.

Farmers and self-employed residents of greater Minnesota especially rely on MinnCare, state Human Services Commissioner Emily Johnson Piper said.

While Piper said the state should have enough in reserve to fund MinnCare through 2018, a cut such as federal officials suggest would empty the bank account.

Complicating the issue is current discussion in Congress about repealing the health care law popularly known as Obamacare, and replacing it with something more to the Republican Congress' liking. While Democrats such as Dayton said such a move would be disastrous, just how it would affect state programs will not be known until legislation passes.

Also in question is a special legislative session that Dayton hopes results from a lawmakers' lawsuit over the Legislature's funding. If the session occurs, Dayton said, health care funding issues could be debated.

Dayton said that he cannot even talk about the issue with Secretary Tom Price of the Department of Health and Human Services, the first time in six years as U.S. senator and more than six years as governor that he has not been able to talk to a Cabinet secretary.

Minnesota's congressional delegation also has been trying to make sure both MinnesotaCare and individual health insurance policies get federal aid, but cannot get answers either.

"Minnesota, with a Republican-led Legislature and Democratic governor, was one of the first states to seek a waiver from the federal government to establish a reinsurance program to bring down premiums for people in our state," U.S. Sen. Amy Klobuchar, D-Minn., said Wednesday. "It is critical for the federal government to approve Minnesota's waiver application as soon as possible, without any new conditions or penalties. I reached out to Secretary Price yesterday to urge him to reverse this last-minute obstacle to our state's bipartisan effort to bring down healthcare costs."

The reinsurance program lawmakers adopted is designed to help insurers pay for large claims.

The most immediate issue is how much individual policies will cost in 2018. State law requires rates to be set early next month, with sales to begin Nov. 1. Individual policies are bought by people who do not have employer-provided insurance or are on government programs.

Insurance companies providing individual policies plan to charge 20 percent higher rates if the federal aid does not come through.

MNsure CEO Allison O'Toole said that she cannot estimate how many Minnesotans will go without insurance rather than pay higher premiums. "They will be faced with a hard choice."

In her travels around Minnesota, O'Toole said, she hears people say "they are worried about having coverage and they are worried about being able to afford insurance."

Dayton was frustrated that federal officials have not approved the premium aid and are talking about cutting MinnesotaCare funding after months of his staff working them them, and following their instructions "exactly."

The Democratic governor said Price and Republican President Donald Trump have urged states to be innovative, which he said describes the Minnesota health care programs. He also said that his staff only Friday learned that if premium relief is approved that MinnesotaCare funding would be cut.

MinnesotaCare serves about 100,000 people, with nearly twice that many buying individual insurance policies through state-run MNsure or private insurance agents.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.