ST. PAUL - State Rep. Steve Gottwalt, R-St. Cloud, today presented a health care reform bill (HF1865) that would improve how Minnesota provides health care coverage to low-income adults, while saving the state an estimated $100 million per year.Gottwalt has often told me that there are smarter, more cost-effective ways to deliver health care to those in need. The fact that a Republican actually got a cost-effective initiative past a democrat-controlled committee in the current political climate is no easy feat.
Gottwalt presented the Healthy Minnesota Plan (HMP) to the Health Care and Human Services Policy and Oversight Committee, which unanimously approved the bill, moving it on to the Health and Human Services Finance Division.
The HMP would cover 84,000 Minnesota adults currently on MinnesotaCare with a more generous private market benefit package, and a deductible covered mostly by the state. The plan would pay providers market rates for the health care they deliver, eliminating cost-shifting, and opening more health care access to those enrolled in the plan.
The HMP would save state administrative costs, provide greater flexibility for the enrollee, tap into savings of large private insurance pools, and fit well with other health care reform initiatives. Gottwalt described the bill as a “demonstration project that will improve care for 84,000 Minnesotans, and save the state about $200 million in the coming biennium.”
“The plan benefits consumers, providers and the state,” Gottwalt said. “Even if Minnesota were not facing a huge budget deficit, we need to explore better ways of covering more Minnesotans in a manner that is financially sustainable and engages consumers more directly. The private market can deliver better access to high quality, cost-effective health care.”
Gottwalt said Minnesota currently spends about $7,000 per year for every adult enrollee on MinnesotaCare. He said conservative estimates show the HMP will save the state more than $1,000 per adult enrollee, or about $100 million per year ($200 million per biennium).
“The savings actually grow over time,” Gottwalt said. “We think this approach could be used to provide coverage to other public enrollees, saving even more.” Given the current state budget deficit, this is seen as a sustainable way to provide coverage to people in need while saving the state significant money.
Gottwalt said the HMP generates state savings several ways, starting with tapping into larger, private insurance pools to capitalize on more efficient administrative, education and enrollee services now provided by the state.
Also, the cost to the state for covering most of the deductible under the HMP is based on actual expenditures, not a per-member-per-month capitation payment. The Healthy Minnesota Plan Account (structured as a Health Reimbursement Account or HRA) requires the state to maintain a reserve, but not full funding up front. HF1865 does not include copays, but it is structured to be flexible in addressing cost sharing issues.
The HMP offers an even greater level of benefits than currently available under MinnesotaCare, including dental, vision and pregnancy coverages. The plan provides first-dollar coverage of primary and preventive care, all the covered benefits of MinnesotaCare, and a $5 million lifetime maximum (much stronger than MinnesotaCare's $10,000 inpatient maximum).
“Instead of being denied access to care by providers who do not get paid enough from existing Minnesota public programs, these enrollees will now be considered on par with other privately insured people,” Gottwalt said. “Also, these enrollees will have a debit card with which to pay eligible expenses within the deductible. No more being shunned for lack of a cash co-payment or deductible payment. And, unlike MinnesotaCare, the Healthy Minnesota Plan major medical coverage is completely portable; it belongs to the enrollee.”