Minnesota: Health Care Affordability Board
Upshot
Two companion bills were introduced (S.F. 4353 and H.F. 4307) that would establish a Health Care Affordability Board by January 1, 2023 to monitor health care costs and set total state health care spending growth targets.
An Advisory Council would be appointed by the governor to advise the Board. The Board would also establish the Office of Patient Protection to advise the state government on ways to make health care more affordable and accessible for consumers.
The text was included in the Minnesota House’s omnibus health financing package (HF 4706). An omnibus health and human services bill eventually did pass and was enacted, but it did not include the Health Care Affordability Board. The two original bills died when the legislature adjourned on May 23, 2022.
Background
Minnesota’s health care system includes a state-based Marketplace, reinsurance program, and a BHP which provide many coverage options for residents. In October 2021, the Minnesota Department of Health submitted a statutorily mandated report to the state legislature on health care spending estimates and ten-year projections. The Department found that 2021 was the third consecutive year which exhibited growth in health care spending over five percent in Minnesota, driven mostly by private health care spending.
According to a 2019 report, the Department of Health found that hospital spending was the single largest spending category at 33 percent and accounted for $1.1 billion of the $2.9 billion spending increase from 2018 to 2019. The report projected an increase in state health care spending from $56.6 billion in 2019 to $104.2 billion in 2029.
Sponsors of this legislation note that several other states have implemented health care affordability boards and spending targets, and that Massachusetts saved $9 billion in health care costs over five years as a result of its affordability board. However, Republicans in Minnesota are concerned about imposing cost growth on health care entities.
Summary
The two companion bills would establish three new entities within the Department of Health: 1) a Health Care Affordability Board; 2) a Health Care Affordability Council; and 3) an Office of Patient Protection. Additional detail on these three entities is provided below.
Health Care Affordability Board: This proposal would establish a Health Care Affordability Board to examine health care cost trends and causes, set spending growth targets, and develop recommendations to lower the rate of spending growth. The Board would consist of 13 members with expertise in health care finance, health care management or administration, consumer advocacy, health benefits administration, health care delivery, addressing health disparities, or representing the health care workforce. The Board would, importantly, set health care spending growth targets for the state and engage in other monitoring activities regarding cost, quality, and equity. This work would culminate in recommendations to lower the rate of growth in commercial health care costs and public health care spending and improve the quality and value of care.
Health Care Affordability Council: The bill would direct the Governor to appoint a Health Care Affordability Advisory Council to advise the Board on health care costs and access issues. Members would be appointed based on their knowledge of health care delivery, ensuring access for diverse populations, public health, patient perspectives, health care cost trends and drivers, research, and health care benefits management. Specifically, the council would provide recommendations on issues such as metrics related to setting health care spending growth targets; appropriate data sources; and how to assess the impacts of setting spending growth targets on marginalized communities.
Office of Patient Protection: The Board would be required to establish the Office of Patient Protection to assist consumers and advise the legislature on ways to reduce consumer health care spending and reduce complexity.