Minnesota: Basic Health Program Buy-In

Minnesota: Basic Health Program Buy-In

Upshot

  • H.F. 4706 would allow individuals with an income that currently exceeds 200 percent FPL to enroll in MinnesotaCare, the state’s basic health program. Most enrollees, except for children under the age of 21, would be required to pay a monthly premium based on a sliding fee scale.

  • The bill would also require the Minnesota Commissioner of Human Services to establish a smaller employer public option that leverages MinnesotaCare, beginning with recommendations for an implementation plan

  • A related bill, H.F. 11, included provisions to establish transition programs to promote affordability for consumers in the individual market leading up to the establishment of the BHP buy-in. These provisions were not included in H.R. 4706, which was reported out of the committee level but ultimately did not pass.

Background

Minnesota adopted the ACA Medicaid expansion. Therefore, all adults with an income up to 138 percent FPL are eligible for Medical Assistance (MA), the state Medicaid program. Minnesota does not offer a Medicaid buy-in program for working people with disabilities.

Minnesota also offers MinnesotaCare, a BHP that provides health care coverage for people who earn too much to qualify for Medicaid but whose income is up to 200 percent FPL. The individual must also be a Minnesota resident, a U.S. citizen or lawfully present in the U.S., not enrolled in Medicare, and not incarcerated. MinnesotaCare delivers benefits through managed care organizations. As required, MinnesotaCare covers the EHBs. Most MinnesotaCare members pay a monthly premium based on a sliding fee scale, up to an $80 monthly premium per person. The following enrollees have no premium: children under the age of 21, Americans Indians and Alaska Natives and their households, and certain military members (for up to 12 months). Some members 21 years and older are also required to pay cost sharing toward their medical costs.

In addition, Minnesota operates MNsure, a state-based health insurance Marketplace. MNSure is a robust individual market, with five health insurance companies offering qualified health plans. In 2022, consumers in every county can chose from at least 22 different qualified health plans. During the 2022 open enrollment period, 125,507 signed up for private health coverage through MNSure. This roughly 10 percent increase from the 2021 open enrollment period is due in part to increased access to APTCs. Fifty-seven percent of enrollees received APTCs averaging $517 in monthly savings on premiums. Minnesota also operates Minnesota Premium Security Plan (MPSP), a reinsurance program, through a section 1332 waiver, which has lowered premiums by about 20 percent on average.

Summary

H.F. 4706 would allow families and individuals with incomes above 200 percent FPL to enroll in a buy-in option for MinnesotaCare, beginning January 1, 2025, or upon federal approval. Eligibility would be limited to a family or individual that does not have access to an employer-sponsored plan that is affordable and provides minimum value, as defined under federal regulations. Similar to MinnesotaCare, the MinnesotaCare buy-in option would require members to pay a monthly premium based on a sliding fee scale established by the Minnesota Commissioner of Human Services. Children under the age of 21 would have no premiums.

In addition, the bill would require the Minnesota Commissioner of Human Services to establish a small employer public option that leverages MinnesotaCare. This option would be limited to employers with fewer than 50 employees. The bill does not prescribe the structure of the small employer public option. Instead, the bill asks the Commissioner to determine “whether the employer makes contributions to the commissioner directly or the employee makes contributions through a qualified small employer health reimbursement arrangement or other arrangement.” The commissioner would be required to present the recommendations for a small employer public option by December 15, 2023.

Finally, the bill would require the Commissioner of Human Services to develop an implementation plan for the MinnesotaCare public option program, which must include:

  • Recommendations for any changes to the MinnesotaCare public option necessary to continue federal basic health program funding or to receive other federal funding;

  • Recommendations for implementing any small employer option that would allow any employee payments toward premiums to be pretax;

  • Recommendations for ensuring sufficient provider participation in MinnesotaCare;

  • Estimates of state costs related to the MinnesotaCare public option; and

  • Draft legislation that includes any additional policy and confirming changes necessary to implement the MinnesotaCare public option and the implementation plan recommendations.

The implementation plan would be due by December 15, 2023. By January 15, 2024, the Commissioner of Human Services would also have to present a report comparing service delivery and payment system models for MinnesotaCare. The report would have to compare the current model with two alternative models. At least one of the models must include a state-based model in which the state holds the plan risk as the insurer.

A related bill, H.F. 11, included provisions to establish transition programs to promote affordability for consumers in the individual market leading up to the establishment of the BHP buy-in. These provisions were excluded from H. 4706. A brief overview of the transition programs included in H.F. 11 is provided in the table below.