Governor Dayton Urges Approval of Federal Waiver for Minnesota’s Health Reinsurance Program, Vows to Fight Trump Administration Cuts to MinnesotaCare Funding

ST. PAUL, Minn., Sept. 20 -- Gov. Mark Dayton, D-Minn., issued the following news release:

Governor Mark Dayton today urged the federal government to officially approve Minnesota's 1332 innovation waiver, to allow the state to operate its reinsurance program created during the 2017 Legislative Session. The reinsurance program would help reduce premiums by an estimated 20 percent from what they otherwise would be, for Minnesotans who purchase their health insurance on the individual marketplace.

The following is a statement from Governor Mark Dayton:

"When the Minnesota Legislature established the state's reinsurance program last spring, CMS insisted that it be made conditional upon receiving a 1332 Waiver. In June, we were told by CMS staff that our waiver application was complete. We were told several times verbally that our application had no problems with it and would be approved by the end of August. We are still waiting for that official approval and can receive no official word on when it will be received.

"The state's reinsurance plan would reduce health insurance premiums by an average of 20 percent for an estimated 165,000 Minnesotans, who will soon be shopping on the Individual Market. I thank Minnesota's Congressional Delegation and Leaders of the Minnesota Legislature, both Republicans and Democrats, who have urged the Trump Administration to approve this waiver.

"To further disrupt and possibly severely damage Minnesota's health care system, Administration officials informed us just last week that our reinsurance program would cause us to lose as much as $369 million in federal funding for MinnesotaCare, which provides health insurance for many of our state's most at-risk and vulnerable citizens. I urge the Administration to immediately approve Minnesota's 1332 Waiver Application and to rescind its intended drastic cut in funding for our Basic Health Plan."

The Minnesota Department of Commerce submitted the state's application to the federal government on May 30, 2017. Section 1332 of the Affordable Care Act allows states to apply for a State Innovation Waiver to pursue innovative strategies that provide residents with access to high-quality, affordable health insurance.

"Securing this waiver would be good news for Minnesotans on the individual market," said MNsure CEO Allison O'Toole. "These lower rates are going to help families across Minnesota get the coverage they need and deserve at a more affordable price."

Minnesotans interested in purchasing their own health insurance should contact MNsure, Minnesota's health insurance marketplace, to shop, compare and choose health insurance coverage. It is the only place where Minnesotans can apply for financial help to lower the cost of health coverage.

Bipartisan Leadership for Minnesota

Minnesota's entire congressional delegation - Senator Amy Klobuchar, Senator Al Franken, Congresswoman Betty McCollum, Congressman Keith Ellison, Congressman Tim Walz, Congressman Erik Paulsen, Congressman Rick Nolan, Congressman Tom Emmer, and Congressman Jason Lewis - have worked to secure a federal waiver for the reinsurance program. On May 17, 2017, the delegation sent a letter asking HHS Secretary Tom Price and Treasury Secretary Steve Mnuchin to approve Minnesota's waiver application. The delegation sent another letter to the Secretaries last week, reiterating the need for quick approval of the waiver.

In May, Governor Dayton along with a bipartisan coalition of state legislators also sent a letter to HHS Secretary Tom Price and Treasury Secretary Steve Mnuchin urging them to approve Minnesota's application.

Impact on MinnesotaCare

As part of Minnesota's 1332 waiver application for reinsurance, the Trump Administration has reversed course, and is proposing to cut funding for MinnesotaCare as a Basic Health Plan. This would have a significant, long-term impact on the state budget - costing Minnesota $369 million in federal funding during the next two years. In response to the decision, Governor Dayton sent a letter to U.S. HHS Secretary Tom Price, urging the Trump Administration to reverse its decision. The Governor also will review other appropriate action to protect full federal funding for MinnesotaCare.

"Like the Governor, I heard first hand from federal officials that states will be given flexibility. Instead, we are punished for being innovative," said Minnesota Human Services Commissioner Emily Johnson Piper. "It's wrong to pit the five percent of people on the individual market, who are hurting, against financial stability for a health care program serving nearly 100,000 working poor Minnesotans - particularly during a time of such great uncertainty about the future of programs like Medicaid and MinnesotaCare. I encourage Minnesota's Congressional delegation and legislative leadership to continue to push for this 1332 waiver and full funding for our Basic Health Plan to allow Minnesota to continue its bipartisan legacy of innovation and leadership in healthcare for its people."

Program - Estimated Federal Funding (FY 2018-2019)

Individual Market Reinsurance - $208 million

MinnesotaCare (Basic Health Plan) - ($369 million)

Total: - ($161 million)

Created in 1992 by Republican Governor Arne Carlson and a DFL Legislature, MinnesotaCare today provides quality, affordable health insurance for more than 100,000 Minnesotans. Following passage of the Affordable Care Act (ACA), Minnesota converted MinnesotaCare into a Basic Health Plan in 2014. Under the ACA, the federal government provides financial assistance for low-income individuals who are above Medicaid eligibility, but below 200 percent of the federal poverty level.

By adopting a basic health plan, the ACA directs the federal government to provide Minnesota 95 percent of the funding it would have otherwise spent subsidizing coverage for Minnesotans above Medicaid eligibility, but below 200 percent of the federal poverty level.

Close Communication with Federal Officials

During the past eight months, Minnesota officials have been in constant communication with federal officials to design, submit, and advocate for Minnesota's application for a Section 1332 State Innovation Waiver, and to ensure that this waiver application would not impact federal funding for MinnesotaCare. See an overview below of communication between Minnesota and federal officials concerning this waiver and federal funding.

* February 10, 2017: Minnesota Commerce Commissioner Rothman meets with Centers for Medicare & Medicaid Services (CMS) staff.

* February 25, 2017: Governor Mark Dayton meets with U.S. Health and Human Services (HHS) Secretary Tom Price to discuss the state's reinsurance proposal.

* March 15, 2017: Minnesota officials and Senator Michelle Benson participate in a conference call with CMS staff to discuss contingency language in the legislation and possible issues related to BHP funding.

* March 22 - April 3, 2017: Minnesota officials are in repeated communication with CMS regarding the final legislative language.

* April 7, 2017: Minnesota officials participate in a conference call with CMS to discuss Minnesota's Section 1332 waiver application.

* April 20, 2017: Minnesota officials participate in a conference call with CMS and the U.S. Treasury to discuss possible issues related to Basic Health Plan (BHP) funding in the waiver.

* April 25 - May 24, 2017: Minnesota officials are in repeated communication with CMS regarding Minnesota's waiver application.

* May 30, 2017: Minnesota officials submit the final waiver application to CMS.

* June 29, 2017: Minnesota officials participate in a conference call with CMS to discuss Minnesota's waiver application.

* June 30, 2017: CMS indicates to Minnesota officials that the waiver is complete.

* July 11, 2017: Governor Dayton meets with Secretary Price and Seema Verma, Administrator of the Centers for Medicare and Medicaid Services to request quick approval of Minnesota's waiver application.

* July 11, 2017: CMS asks technical questions regarding the actuarial analysis in Minnesota's application.

* July 12, 2017: Minnesota officials respond to CMS's technical questions.

* July 26, 2017: Minnesota officials ask CMS whether federal public comments were received regarding Minnesota's waiver application, and whether Minnesota needed to respond to any comments. CMS replies no to both questions.

* July 26, 2017: CMS requests proposed health insurance rates for the individual market with and without reinsurance.

* July 30, 2017: CMS requests an explanation of why Minnesota was requesting mid-August approval of the waiver.

* August 1, 2017: Minnesota officials respond to CMS, providing proposed health insurance rates for the individual market with and without reinsurance, and explaining Minnesota's request for expedited approval of the waiver.

* August 16, 2017: Minnesota officials participate in a conference call with CMS to discuss Minnesota's waiver application.

* August 16, 2017: Commissioner Rothman discusses Minnesota's waiver application with CCIIO staff.

* August 17, 2017: CMS asks several rounds of technical questions regarding Minnesota's actuarial analysis. Minnesota officials respond to each request that day.

* August 17, 2017: Commissioner Rothman discusses Minnesota's waiver application with CCIIO staff.

* August 22 - August 23, 2017: Commissioner Rothman and CCIIO staff remain in communication regarding Minnesota's waiver application.