Minnesota DFL, GOP strongly disagree on proposed healthcare revisions

From top left,  State Rep. Greg Davids and State Rep. Jennifer Schultz. Bottom - MNsure CEO Allison O'Toole.

MNsure’s top official on Friday blasted Republican healthcare proposals at both the state and federal level, saying they represent less coverage at a higher cost. 

A key GOP leader voiced similar feelings about the Affordable Care Act, often called “Obamacare,” saying Minnesota Democrats aren’t willing to acknowledge that voters broadly rejected the plan by their support for conservatives in last November’s presidential election.

MNsure CEO Allison O’Toole made her comments in Duluth accompanied by DFL State Rep. Jennifer Schultz, Generations Health Care Initiatives Program Director Megan Halena and Executive Director Jenny Peterson, and Stephen Collins, a private insurance agent with Benes Insurance Services of Duluth. MNsure has sparked 96 percent growth in health insurance enrollment since its inception four years ago, O'Toole noted, guiding Minnesotans to obtain coverage and federal tax credits to offset their premium costs.

“Thousands of Minnesotans could not afford to protect themselves without these tax credits,” O’Toole said. “We did this against all odds. We had a lot working against us – not only the political rhetoric in D.C. and our capital in St. Paul, but we saw Blue Cross pull out of the market, which left about 103,000 Minnesotans out in the cold to choose a new carrier. We had insurance companies for the first time ever in this country impose enrollment caps on new enrollees.”

Schultz said recent GOP proposals would degrade what MNsure offers.

“The president’s budget came out and it doesn’t look good for Minnesota or any other state that cares about people,” said the Duluth Democrat. “He proposed a $31 billion cut to health and human services, education, the Department of Interior and the EPA. So big cuts are coming,” she predicted.

Statewide, 68 percent of those who obtain coverage on the individual market through MNsure receive a federal tax credit. The credit averages $7,500 per year. In the region that includes St. Louis, Lake and Cook counties, the average is even higher – $8,000.

“MNsure has made great success. People who are getting HC for the very first time are so grateful,” Peterson said.

“We’re constantly improving,” O’Toole added.

“Allison is correct that we’re doing really well, and I’m getting really tired of hearing the same message from Republicans that things were better before the ACA,” Schultz said.

One problem with the current program, Collins pointed out, is the lack of a graduated income scale to determine who is eligible for a subsidy and who is not. Per federal rules, the system is set up as a cliff – so if applicants earn $1 too much, they receive nothing. O’Toole said that won’t change under the new plan, and subsidies will be cut in half.

Rep. Greg Davids (R-Preston) evaluates MNsure far differently, calling it “the biggest disaster in Minnesota history.”

“We spent $440 million (to develop MNsure) and the program failed. It’s an unmitigated disaster,” said Davids, author of a House bill that would create a state-funded reinsurance pool to support private insurance companies. He also supports a separate Republican bill that would eliminate MNsure. It calls for Minnesotans to buy their insurance on the federal insurance exchange, which already is done in Wisconsin, and save the cost of MNsure.

That’s a point of contention between Minnesota Democrats and Republicans. Democrats say MNsure is designed to determine which applicants are eligible to receive Minnesota Care, a public funded program for the working poor who pay according to a sliding-fee based on their income and family size. If MNsure is eliminated, they contend, the state will have to start from scratch to create new software that identifies working poor persons who are eligible for that assistance. It’s not something the federal insurance exchange can do. That change would cost the state $5 million, Schultz said. But according to Davids, eliminating MNsure would save the state much morer. It is budgeted to spend $41.4 million this year – about $103 per enrollee. Funding is through a 3.5 percent user fee on insurance policies.

It’s not currently known how soon revisions to Obamacare and MNsure might be implemented, but both parties are steadfast in promoting their own healthcare vision.

“We’re going to be open for business on Nov. 1,” O’Toole said, referring to MNsure. “Any changes made at the federal level likely won’t be implemented by this fall.”

“I’m hopeful our leaders won’t take us backwards,” she added. “Because of the work being done by MNsure and our partners and the ACA, there are about 400,000 Minnesotans who have gained coverage and have protected themselves against crushing medical bills and ailments. We cannot abandon them at this point.” O’Toole said.

Schultz opposes both the GOP reinsurance plan and proposals to eliminate MNsure.

“We wouldn’t have any control, and rates would be determined by the federal government and could go up with no state control over the product or customer service. It doesn’t save any money going to the federal exchange,” she said.

Minnesota should not allocate hundreds of millions of dollars when there’s so much uncertainty about the level of federal healthcare funding that might emerge, Schultz added.

O’Toole and Schultz both said the reinsurance bill offers no guarantees that private insurers will sell policies on the individual market at a reasonable price with reasonable deductibles. Gov. Mark Dayton has expressed the same view. In an interview, Davids countered that insurers may drop out of the individual market without some sort of assistance.

“If we do nothing, we won’t have a market in 2018,” he said. “My constituents have lost doctors, clinics and hospitals, and their premiums have skyrocketed.”

Schultz said she favors an alternative plan, called the “MinnesotaCare buy-in model,” that would allow residents to purchase healthcare coverage through a statewide pool.

“It’s affordable with reasonable deductibles and cost sharing,” she said.

Davids said her proposal is evidence that Democrats hate private insurance companies and won’t be happy unless they can establish a single-payer plan. Low reimbursement rates to be paid by the MinnesotaCare buy-in model would spell doom for healthcare providers, he predicted. 

“This would put more people on a plan that pays providers half of what Medicaid does. Their plan doesn’t work, and it will shut down hospitals and clinics across the state,” Davids said.

Schultz and O’Toole urged Minnesotans to keep abreast of all new healthcare funding proposals, suggesting Republican plans will reduce subsidies and increase costs for everyone.

“My message to consumers is to tune in to this debate because there’s a lot at stake,” O’Toole said.

“Democrats got us into this mess, so why would people turn to Democrats to get us out of this mess,” Davids questioned. If his bill doesn’t pass, he added, there might not be any carriers offering individual policies next year in some Minnesota counties.