Federal Health Care

Reform in Minnesota
Elizabeth Lukanen, MPH
State Health Access Data Assistance Center (SHADAC)
University of Minnesota

Annual Minnesota Policy Conference

October 18, 2017
Minneapolis, MN
Minnesotas Health Care System Prior to
the Affordable Care Act

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Minnesotas Health Care System Before
the Affordable Care Act
Among the lowest uninsurance rates in the country 8% in 2008

Well functioning, but costly High-Risk Pool

Covered individuals without access to employer-sponsored insurance, denied
coverage in the nongroup market due to a pre-existing condition

Consistently high health care quality ranking

Rating restrictions which limited premium variation by health status, age, etc.

Consistent annual premium increases in the nongroup market over the last
decade that ranged from 1.0% in 2005 to 11.2% in 2008

Consistent growth in health care spending over the last decade that ranged
from 1.6% in 2010 to 7.6% in 2006

Generous eligibility thresholds for Medical Assistance (Minnesotas Medicaid

program)

MinnesotaCare, a subsidized insurance program for low-income

Minnesotans who did not qualify for Medical Assistance
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Drivers and Impacts of the Affordable
Care Act

4
What Drove Federal Health Reform?

Could be better!
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ACA Focus on Expanding Coverage

Marketplaces as a place to shop for coverage and sign up for coverage

Financial assistance for middle-income families
Expanded access to Medicaid for lower-income families
Changed the way insurance companies must operate (e.g., guaranteed
issue, prohibited lifetime limits)
Employer provisions incentives and penalties
Required individuals to have health insurance with minimum essential
benefits
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Uninsurance Rate Over Time, 20082015
18%

16% 16%
15% 15% 15%
15% 15%
14%

12%
12%

10% 9% 9% 9%
9%
8% 8% 8%
8%
6%
6% 5%

4%

2%

0%
2008 2009 2010 2011 2012 2013 2014 2015
U.S. Minnesota

Source: SHADAC Analysis of the ACS.

ACA Impacts and Policy Action in Minnesota

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Source of Health Insurance Coverage, 2015
~300,000
Minnesotans
Nongroup
Employer
~70,000 5.4%
56.3%
MNsure

Uninsured
4.3%

Medicare
16.7%

Medical
Assistance/MNCare
17.4%

Source: Adapted from Minnesotas Health Care Ecosystem: An Overview. Presentation to the Committee on Health Care Consumer Access and
Affordability by Stefan Gildemeister. July 12, 2017 9
Change in Source of Insurance Coverage,
20132015
300,000
292,117
250,000

200,000

150,000

100,000
80,829
50,000
48,755
-212,796 -61,306 -24,649 -23,597
0

-50,000

-100,000

-150,000

-200,000

-250,000
Uninsured Employer High-Risk MinnesotaCare Nongroup Medicare Medical
Pool Assistance
Note: There was a 1.3% population growth over this time period.
Source: Adapted from Minnesotas Health Care Ecosystem: An Overview. Presentation to the Committee on Health Care Consumer Access and
Affordability by Stefan Gildemeister. July 12, 2017 10
ACA Impact in Minnesota

Reduction in uninsured rate

Increased enrollment in the nongroup market, with many getting
subsides and cost sharing
Increased enrollment in Medical Assistance
Individuals with employer coverage no longer had lifetime limits
Required minimum essential benefits = more comprehensive
coverage for many, but less choice
Costly MNsure had early glitches
Closure of Minnesotas High-Risk Pool
Discontinuation of broad base of funding for Minnesotans with pre-existing
conditions
Large insurers have exited the nongroup market
Premium increases in the nongroup market (average of 50% in 2017)
Nongroup enrollees without subsidies pay a lot

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Health Care Spending Continues to Rise
$80 Actual Spending Projected Spending $75.6

$70.9
$70 $66.6
$62.6
$59.0
$60
$55.8
$52.9
$50.0
$50
(Billions of dollars)

$47.6
$45.4
$43.4
$40.8
$39.5
$40 $38.1
$36.9 $37.5
$35.4
$33.8
$31.6
$29.3
$30

$20

$10

$0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Source: Minnesotas Health Care Ecosystem: An Overview. Presentation to the Committee on Health Care Consumer Access and Affordability by
Stefan Gildemeister. July 12, 2017. Data for 2014 remains preliminary. 12
Minnesota Policy Efforts to Stabilize the
Nongroup Market
After the exit of major insurers, the Insurance Commissioner negotiated enrollment
caps with the remaining insurers to incent them to them to stay in the nongroup
market

Health Insurance Premium Relief in 2017

Health plan rebates designed to reduce quoted premiums by 25%
Financed by $312 million from the state budget reserve

State-funded reinsurance in nongroup market in 20182019

Minnesotas Premium Security Plan funds 80% of health plan claims between $50,000
and $250,000
Projected to reduce 2018 premiums by 20%
Financed by Health Care Access fund, general fund, and federal contribution

Contingent upon approval of states federal 1332 waiver

Submission of 1332 federal waiver to secure federal funding for reinsurance and
continued federal funding for MinnesotaCare

All of the above are short-term fixes without ongoing funding

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Federal Action Under President Trump

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Early Indications
Trump campaigned on repealing and
replacing ACA

Early on, there were at least 7 GOP

plans for replacing the ACA

GOP plans had mixed and sometimes conflicting provisions

Complete repeal
Roll back Medicaid expansion over time
Cap federal spending on Medicaid (e.g., fixed per capita cap or block grant)
Allow insurers to provide lower-cost, stripped-down insurance plans
Reduce or eliminate subsidies in the nongroup market
Universal Access vs Universal Coverage
Eliminate the individual mandate
Make the uninsured wait 6 months to get coverage
Soften regulations on insurers (e.g., reimpose lifetime limits)
Give states flexibility related to mandated coverage (e.g., contraceptives) and
insurance regulation
Federal Action To Date
Bills to repeal/replace the Affordable Care Act have all have failed to
pass the Senate
Focus in Congress seems to have shifted to other policy priorities
The Administration can do a lot without legislation
Non-enforcement of coverage mandate
Reduce funding for outreach and enrollment into marketplace
Delay or fail to approve state flexibility under 1332 waivers
Issue new rules/Executive orders (e.g., draft rule to roll back contraception
requirement, elimination of cost sharing reduction payments)

The administration approved Minnesotas 1332 waiver

Approval for $139 million in reinsurance funding
Discontinuation of funding for MinnesotaCare

Uncertainty regarding the nongroup market, and subsidies in these

markets may be impacting insurers' rate-setting and willingness to
offer plans in this market
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Looking Ahead

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Elizabeth Lukanen, MPH
Deputy Director
State Health Access Data Assistance Center
University of Minnesota, School of Public Health
[email protected]
612.626.1537

Check out our website at www.shadac.org and follow us

on twitter: @SHADAC