Following local lawmakers, Dayton takes up MinnesotaCare as public option

Jan. 24--Gov. Mark Dayton is proposing to add MinnesotaCare to the state's individual health insurance exchange, opening a public option for Minnesota buyers.

Dayton proposed the state-run public insurance option Monday night during his State of the State address. The governor fainted during his speech, just before he was to discuss the measure.

His plan builds on a proposal former Sen. Kathy Sheran, DFL-Mankato, and Rep. Clark Johnson, DFL-North Mankato, introduced last year to curb rising costs in the individual insurance market.

"Far too many Minnesotans who don't qualify for federal tax credits have been hit with rapidly rising health insurance costs -- from drastic increases in their premiums, to extremely high deductibles," Dayton said.

Sheran, who ended 10 years as a state senator this year, has long advocated for the state to offer its subsidized public health plan as an unsubsidized option for residents. As the former chair of the Senate Health and Human Services Committee, she spearheaded DFL efforts last year to tackle rising insurance costs, though she said Monday night she had wanted to propose a public option before Minnesota implemented the Affordable Care Act.

"MinnesotaCare is a very, very good product," she said. "It doesn't set limits on who the providers are, it doesn't set limits on caps ... it's an excellent, excellent health care product."

Sheran and Johnson's proposal would seek a waiver from the federal government to offer MinnesotaCare on the market. It also directs state officials to create a MinnesotaCare-based program that would offer comparable coverage at a slightly less-than-average premium.

MinnesotaCare would still be offered for free to residents whose income falls below 200 percent of federal poverty guidelines -- about $48,500 for a family of four.

Though the DFL-controlled Senate passed Sheran's proposal last year, it never received a hearing in the GOP-controlled House. Johnson introduced the MinnesotaCare this year with 34 DFL representatives co-sponsoring it in the House and Sen. Tony Lourey, the DFL's ranking member on the Senate Health and Human Services Committee, carrying it in the Senate.

Dayton's plan is similar, and would reportedly do away with geographic ratings when pricing insurance for consumers. That means insurance would cost the same for consumers no matter where they lived, a key factor in how insurance companies price insurance throughout Minnesota.

The governor's office estimates customers would pay an average premium of $451 for a plan that pays 70 percent of health care costs. Dayton encouraged lawmakers to take action by April 1 to ensure MinnesotaCare is added to the state insurance market in 2018.

Sheran said she was pleased Dayton is taking up MinnesotaCare, and hopes lawmakers consider the program's merits in future discussions on health care reform.

"It's a very, very attractive policy for the individual market, and it would have elements of it that we should look at even if the Affordable Care Act goes away," she said.

The governor's proposal comes as he and Republicans scramble to curb skyrocketing costs in the individual market this year. Premiums for individual insurance coverage have increased by an average of 50 to 67 percent, and insurance companies say they'll have to abandon the individual insurance market if those trends continue.

Dayton and GOP leaders have proposed short-term relief to individual insurance buyers, but both sides will likely battle over long-term insurance reform. Republicans favor reinsurance, a sort of coverage for insurance companies, to help absorb costs. They also seek to end Minnesota's MNsure health care exchange by placing the state on the federal market, and easing restrictions on for-profit insurance companies to offer coverage to consumers.

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