New State Budget Comes With Higher Costs For MinnesotaCare

ST. PAUL, Minn. (AP) — Minnesota lawmakers kept MinnesotaCare intact but not without a cost that will trickle down to some of the more than 100,000 low-income residents on the program in the form of higher monthly premiums starting in August.

The increases kicking in Saturday vary based on income, and those making less than 150 percent of federal poverty level — roughly $17,600 for a single adult — will escape the increases altogether. But others will see bill increases from as low as an extra $8 a month to as much as an additional $30, according to a letter from the Department of Human Services sent to lawmakers earlier this month.

And by January, those rises will be coupled with undetermined increases to co-pays, deductibles and other charges.

The increases were part of the state's new health care budget passed this year, a way to shore up a historically volatile funding mechanism and compromise with Republicans who sought to do away with MinnesotaCare altogether.

MinnesotaCare enrollees and advocates of the program are still weighing the satisfaction of maintaining the program against the increased costs contained in a new health care budget. And there's the lingering question of the program's future as its main funding source is set to expire by the end of the decade.

Even after the premium increases, MinnesotaCare costs remain well below prices on the private marketplace. But Sarah Greenfield, the health care program manager for a coalition of union and advocacy groups called TakeAction Minnesota, said even a small increase will hit many of the working poor residents on MinnesotaCare hard.

MinnesotaCare covers those who can't afford private insurance but make too much to qualify for Medical Assistance, Minnesota's version of Medicaid. The top earners on the program bring in less than $24,000 a year.

After losing his job three years ago, John Hesch works part-time as an anger management clinic coordinator. Getting MinnesotaCare was a financial lifeline when he wound up in the hospital for six weeks due to diabetes complications. Hesch is at the top of the income spectrum for MinnesotaCare, but he's still bracing for a $30 hike to his premiums — up to $80 monthly.

"That's a 60 percent increase," he said. "That's going to be more of a hardship."

The state's Department of Human Services hasn't yet formally notified enrollees about a premium hike — that notice will go out with the August invoices. The department expects to finalize new, higher co-pay and deductible amounts for MinnesotaCare plans in October or November.

Greenfield said saving MinnesotaCare was a big victory but she was still puzzled by the cost increases.

"It's perplexing and concerning that we would increase costs for low-income workers and their families at a time when we have a surplus," she said, referencing the nearly $1.9 billion surplus lawmakers had to work with this year. "I think that's what scares enrollees: What does that mean about a year when we don't have as strong of a budget?"

The idea originated with Gov. Mark Dayton, who suggested in his budget proposal slight increases to MinnesotaCare premiums and cost-sharing to sustain "this critical part of Minnesota's safety net for those who may need it in the future."

But with MinnesotaCare's largest funding source — a tax on health care providers — set to expire in 2019, Rep. Matt Dean said more is needed. Dean led the charge to do away with MinnesotaCare altogether, saying the program overlaps with the federal health care law that offers tax credits to buy down private health insurance.

"It's something that is not paid for long-term. We're going to have to come up with a comprehensive way to help low-income Minnesotans afford health care," the Dellwood Republican said.

The future of MinnesotaCare and that expiring tax will be a marquee item of a task force expected to be assembled over the summer. Its report back to the Legislature is due early next year.

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