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After addressing instability in the health insurance market, lawmakers try to finalize HHS omnibus bill

Saving the individual health insurance market from imploding under the weight of Obamacare regulations topped the Legislature’s list of to-dos this year.  In January, a bipartisan bill passed to provide immediate premium relief to help people afford this year’s 50 to 67 percent premium hikes.  In April, Republican legislators passed a new state reinsurance program to stabilize the market for 2018 and 2019.  The program essentially reintroduces the federal reinsurance program that ended last year.  Despite some misgivings, Gov. Mark Dayton allowed the legislation to become law without his signature because he feared vetoing it might destabilize the market further.

Reinsurance made sense this year because it could be quickly reintroduced to meet deadlines for pricing 2018 plans, but there are likely better ways to address high risks.  American Experiment is actively researching and advising both state and federal lawmakers on various strategies to stabilize individual insurance markets.

Like every other budget bill, the Health and Human Services (HHS) Omnibus bill earned Governor Dayton’s veto and remains part of the final negotiation.  As passed, the HHS bill would cut spending by $482 million, impose stronger eligibility checks on people enrolling in public health care programs, and close MNsure and move to the federal health insurance exchange.

Strengthening eligibility checks is one of the more important elements of the bill.  This is an issue American Experiment worked on in 2016 after an audit from the Legislative Auditor found that 38 percent of the people they tested “were not eligible for the public health care program in which they were enrolled.”  The Legislative Auditor estimated the overpayments due to eligibility errors ranged from $115 million to $271 million over a five-month period.  Over a two-year budget cycle that amounts to $1.3 billion on the top end.  The House and Senate assume their tighter eligibility oversight will save $140 million.

Closing MNsure might be good policy, but it’s highly unlikely it will happen because that would also mean the end of federal funding for MinnesotaCare—the public health care program for low-income working adults.  That’s because the federal government’s health exchange cannot accommodate MinnesotaCare.

The rest of the HHS bill is the usual hundreds of pages—585 to be exact—of changes to the alphabet soup of programs under the jurisdiction of HHS.  Mostly tweaks with a couple program overhauls intermixed.

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