Ramsey County, St. Paul School District weigh fixes for UnitedHealth impasse with HealthPartners, but votes unclear

On Tuesday morning, the Ramsey County board will decide whether to use up to $1.2 million from a reserve account to make supplemental health insurance available to over 1,000 county retirees, a direct response to the ongoing battle between HealthPartners health system and UnitedHealthcare over claim denials.

About 2,300 out of 3,500 retired St. Paul Public Schools employees are also impacted by the impasse between HealthPartners and UnitedHealthcare, according to the school district, whose staff are recommending putting up to $3.5 million toward a supplemental health insurance plan for retirees. The St. Paul School Board could vote on the recommendation Tuesday night, using money from a post-employment benefits reserve account if UnitedHealthcare and HealthPartners don’t reach agreement by Oct. 15.

In July, Ramsey County officials learned that an impasse between the HealthPartners health system and UnitedHealthcare over the insurer’s senior Medicare Advantage plans could kick 2,400 county retirees and spouses out of network, effectively excluding them from Regions Hospital in St. Paul, Lakeview Hospital in Stillwater and other HealthPartners sites.

Former county workers who spent 20 years or more paying into their employee retirement benefits now face the prospect of losing access to HealthPartners cardiologists, cancer care specialists and other doctors they or their loved ones have seen for years. With a Jan. 1 deadline to break the impasse approaching, Ramsey County Board Chair Victoria Reinhardt has been urging the county’s human resources department to explore a fix.

“UnitedHealthcare keeps saying, ‘oh yeah, we’ll work this out.’ HealthPartners seems pretty strong in saying, ‘No, we won’t,'” said Reinhardt on Monday. “They are still talking, but I don’t know that they’ll come to an agreement.”

“When you’re of retirement age, generally you want to stay with the same doctors that you had before,” she added. “I’m in pretty good health, but I’m 71 years old. Things change when you get older. You don’t want to change your doctor. It’s not that simple.”

On Tuesday, the county board will debate whether to approve up to $1.2 million to cover the county’s portion of the cost of a senior supplemental plan that retirees could opt into, though that would carry higher monthly costs than their current UnitedHealthcare Medicare Advantage premiums. The exact amount of monthly payments will vary with their date of retirement, date of hire and years of service.

Employees hired after Jan. 1, 2006 would not receive a county contribution toward the senior supplemental and prescription drug plan.

“It’s different for every person, because everyone gets a different amount,” Reinhardt said. “Is it going to be a lot more? If you don’t get a county contribution, it’s going to be about double.”

The supplemental plan aims to maintain county retiree access to HealthPartners sites in 2025, though it could be extended for up to three years, according to a staff report to the county board. It’s unclear, however, if the spending proposal has the votes to pass. One seat on the seven-member board is currently vacant.

“I’m aware of the agenda item and look forward to tomorrow’s opportunity to better understand the proposal and its impacts,” said County Commissioner Nicole Frethem, in an email Monday. “I expect tomorrow’s discussion will inform my decision. I do not have an official position on the item at this time.”

About 2,400 county retirees and spouses are insured by one of two UnitedHealthcare Medicare Advantage plans, and 45% of them — or more than 1,000 — rely on HealthPartners hospitals and clinics, according to the county. To cover the cost of the supplemental plan, up to $1.2 million would come from an existing 6% payroll surcharge, currently charged to all county departments, which covers vacation pay-outs, severance pay and the costs of other post-employment benefits.

“It’s one-time money,” Reinhardt said. “And it’s coming out of the retiree benefits reserves, which are set aside for that. It cannot be used for anything else. I think it will cost significantly less than that, but you’ve got to budget for the worst that can happen.”

Open enrollment for county retirees begins in late October. If the impasse between HealthPartners and UnitedHealthcare is broken by Dec. 31, the county would host a special open enrollment period for county retirees again in January, allowing them to switch out of the supplemental plan and back to the cheaper UHC Medicare Advantage program, according to the proposal.

And if retirees opt to leave the county system entirely and subscribe to a different health insurer on their own, without a county contribution, they would still be welcome back anytime in 2025 or 2026 under a one-time exception to the policy of permanently dropping enrollees who choose to leave the county’s retirement benefits programs.

“Normally if you leave, you can’t come back,” Reinhardt said. “We wanted to make sure if people chose to leave in 2025, they’d be able to get back into the county system in 2026.”

It’s possible the next county board could choose to explore other health insurance options, though Reinhardt won’t be around to weigh in as an elected official.

Reinhardt, who has served on the county board for 28 years, is not running for re-election this November, and neither is Frethem. Former Commissioner Trista Martinson stepped down in August to accept a position in county employment. That means three of seven county board members will be new come January.

The term of the county’s contract with UnitedHealthcare is Jan. 1, 2024 through Dec. 31, 2025, with an option to renew for 2026, 2027 and 2028.

“It is anticipated we will do a request for proposals for retirement health insurance sometime after the first of the year,” Reinhardt said. “It’s a new county board. Until they see all the things that come in, you can’t promise it. But I believe that will happen. But that one will be up to the next county board.”

In July, HealthPartners informed some 30,000 seniors by letter that UnitedHealthcare has been denying Medicare Advantage insurance claims at a much higher rate — sometimes 10 times higher — than other insurers and forces unnecessary waits for medical care. The health system has said it won’t be making appointments with the insurer’s patients at all next year, even if they’re willing to pay much higher, out-of-network rates.

In addition to Ramsey County, also impacted are thousands of retirees from the city of St. Paul and the St. Paul School District.

The St. Paul Public Schools are under contract with UnitedHealthcare for another year, and the school district intends to go out for bid early next year for retiree health insurance that would take effect Jan. 1 of 2026, according to a staff presentation that will be shared with the board on Tuesday evening.

That still leaves the question of what will happen in 2025.

Time is not on anyone’s side, as open enrollment begins Oct. 15 nationally for federal Medicare recipients, including retirees who wish to purchase individual insurance plans and leave the school district plan. Medicare open enrollment runs to Dec. 7. From Nov. 11-22, the school district will host open enrollment for district retirees.

The school district sent its retirees a letter in August trying to clarify the situation while urging them to reach out to the governor’s office and the state attorney general to ask for help breaking the impasse. It’s also asked UnitedHealthcare and HealthPartners to go back to negotiations when talks bogged down.

On Aug. 27, the school district received a letter from HealthPartners encouraging the district to ask UnitedHealthcare to accept a proposal that would allow retirees to use HealthPartners sites for the duration of the school district contract next year.

There’s been no obvious progress on that front, though UnitedHealthcare and HealthPartners resumed negotiations on Sept. 13, according to district staff.

A spokesperson for HealthPartners said Monday the two sides had met, and “(we) continue to emphasize the need for change in their medical policy practices to address the coverage denial rates that are up to 10 times higher than other insurers.”

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