May 22, 2015

Budget deal on MinnesotaCare triples out-of-pocket costs, raises premiums for working Minnesotans

The Health and Human Services budget passed by Minnesota’s Senate and House of Representatives will increase health care costs for the working Minnesotans covered by MinnesotaCare. The Health and Human Services budget ( Senate File 1458) stops well short of the House’s attempt to repeal MinnesotaCare, but it raises out-of-pocket costs and premiums. Lawmakers made these changes to a time-tested, proven tool for affordable health care despite a projected surplus in the fund that pays for it.

MinnesotaCare is a path to affordable health insurance for households earning 133 to 200 percent of the federal poverty guidelines, or $15,654 to $23,540 per year for an individual. It also covers certain Minnesotans earning less. Eligible individuals and families pay income-based sliding scale premiums. MinnesotaCare reaches people like entrepreneurs, farmers and others who would otherwise lack access to quality, affordable health insurance coverage through their work.

The cuts to MinnesotaCare amount to $65 million in FY 2016-17 and $96 million in FY 2018-19. Coverage through MinnesotaCare will have higher premiums, and the maximum out-of-pocket costs will be three times as high. While some important details are left to be determined, the average impact would be around $370 per adult in 2016. That’s more than a week’s paycheck for many Minnesotans participating in MinnesotaCare. Individual experiences will vary based on a person’s income and use of medical care.

The changes will be hardest on Minnesotans who are dealing with chronic illnesses. That’s because the higher out-of-pocket costs will add up each time Minnesotans use their health insurance coverage. For example, someone who needs to see the doctor regularly to treat diabetes or mental health issues will see their already-tight budgets stretched even further. Increased out-of-pocket costs could also discourage sick people from seeking care.

Raising health care costs for working Minnesotans is unnecessary given the state’s current resources. MinnesotaCare is primarily funded by the Health Care Access Fund. This year’s February forecast projected that the fund will remain balanced through FY 2019. That’s in addition to the projected $1.9 billion surplus in the general fund.

MinnesotaCare has provided affordable health insurance to working Minnesotans for two decades. The Health and Human Services budget undercuts this critical gateway to affordable health care for people who can ill afford it.

-Ben Horowitz, Budget Bites