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MNsure Enrolls Millionaires in Medicaid and MinnesotaCare Programs

The Affordable Care Act was supposed to extend health coverage to millions—not millionaires. Yet while many families continue to struggle to afford medical insurance, some Minnesotans with millions in assets get free and low-cost subsidized health coverage through MNsure, the state health insurance exchange.

“It’s happening all over the nation and all over Minnesota,” said Harlan Johnson, a Pequot Lakes health insurance broker and MNsure Health Industry Advisory Council member. “I’ve looked people on the MNsure Board of Directors right in the eye and told them this. They know it, but they don’t want to deal with it.”

It’s a legal, but dirty little secret among health insurance agents and brokers who help Minnesotans apply for and pick health care plans.

“When a millionaire on Medicaid calls you and says, ‘I’m going to spend the winter in Florida. Can you help me find a doctor,’ it’s like, what?” said Dave Racer, a long time St. Paul health-care consultant.

Strange, but true. High net worth individuals who keep their taxable income below 138 percent of the federal poverty level—about $22,000 for a couple—qualify for Medicaid under Obamacare.

The reason? The Affordable Care Act eliminated the assets test to determine eligibility for medical welfare. Applicants qualify solely on the basis of their modified adjusted gross income.

“A few of them might be at $3 million or $4 million in assets,” Johnson said. “They chose to take advantage of the situation, and they’re not doing anything illegal.”

Johnson has helped about a dozen clients with a net worth of more than a million dollars enroll in Medicaid through MNsure.

“The benchmark example is people that have just turned 62,” Johnson said. “They take Social Security, that’s their only income. They have a ton of savings, and their home is paid for. On paper, if you add up their assets, they’re millionaires. But because of their income, they get Medical Assistance.”

Others, with incomes between 138 and 200 percent of the federal poverty level, can obtain coverage through MinnesotaCare, the low-premium program designed for working people.  Premiums max out at about $80 per month under the heavily subsidized program.

“If they have $500,000 or $1 million in net worth, should these people qualify for subsidies? No, I don’t think so,” said Peter Nelson, policy director for Center of the American Experiment. “I think the average Minnesotan thinks they should probably fund their own health care.”

MNsure does not track how many wealthy Minnesotans take advantage of the loophole. Yet state officials defend the policy of putting millionaires and people with hundreds of thousands of dollars in assets on Medical Assistance.

“There are many forms of assets, which can allow people to remain in their homes, close to their families and in their communities, as they age,” Minnesota Department of Human Services communications officer Karen Smigielski said in a statement. ”The Affordable Care Act was designed to provide more people with health care coverage without exhausting these assets.”

One key state legislator familiar with the issue says something needs to give.

“There’s no reason we can’t say, if you have stock-based assets or retirement-based assets in excess of this amount, you’re not eligible.  Or if you have a paid off second home, you’re not eligible. There are things we can do,” said Assistant Minority Leader Sen. Michelle Benson, R-Ham Lake.

Johnson said a handful of high net worth individuals who qualified declined to take advantage of the system and become MNsure millionaires.

“Four or five of them said, ‘No, I don’t want any part of it. I’m not going through MNsure. Just sell me a regular plan,’” Johnson said.

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