Minnesota Gov. Walz proposes >400% FPL subsidies *and* jumps onboard the Public Option Train!

Minnesota's new Democratic (pardon me..."Democratic-Farmer-Labor", or DFL) Governor, Tim Walz, has just posted his proposed state budget for the next fiscal year, and it includes some fantastic expansions & improvements to the healthcare system of Minnesota, including both state-level ACA enhancements and a push for a robust Public Option, along with other ideas.

The state House is also DFL-controlled, but the GOP holds a small majority in the state Senate, so I have no idea how much if any of this is politically feasible, but I love the roadmap:

Minnesotans lack affordable and comprehensive health coverage options. Approximately 349,000 Minnesotans currently have no health insurance – and far too many have been priced out of health coverage, living just one injury or illness away from bankruptcy. Rising prescription drug prices are driving up health care costs and forcing many Minnesotans to make impossible choices between buying prescriptions, paying rent or putting food on the table.

Every Minnesotan deserves access to quality health care at a price they can afford. That’s why Governor Walz’s budget includes funding to extend low-cost coverage to thousands of farmers, small business owners, and entrepreneurs. The Governor’s budget provides every Minnesotan with an additional health care option, encourages stability in the individual market, and makes health care more affordable in Minnesota.

Provide a 20 Percent Health Insurance Premium Subsidy

The Governor will take immediate action by creating a subsidy program to reduce by 20 percent the monthly premiums for Minnesotans who receive their insurance through MNSure. This subsidy will be applied directly against a consumer’s premiums. This proposal provides relief to Minnesotans with incomes over 400 percent of the federal poverty level do not qualify for the federal premium tax credit which helps lower the costs of health insurance premiums. Up to 80,000 people could participate in the program, reducing the out-of-pocket costs of their health insurance premiums.

This is a repeat of a similar program Walz's predecessor, Mark Dayton, established back in fall 2016 for the 2017 enrollment season only. It's pretty straightforward: ACA-compliant individual market policy premiums shot up a whopping 57% for 2017, and enrollees earning more than 400% of the Federal Poverty Level (FPL) don't qualify for ACA subsidies, so the state scrambled to provide funding for a flat 25% discount on premiums to those earning >400% FPL. It wasn't a sliding scale thing...to the best of my knowledge, you just enrolled via MNsure, and if you earned too much for official ACA financial assistance you had 25% knocked off your total premium.

The 25% discount was a one-time thing. Fortunately, Minnesota implemented a robust reinsurance program for 2018 and 2019, so unsubsidized premiums have been knocked back down somewhat, but they're still pretty high for unsubsidized enrollees, thus this proposal from Gov. Walz. It's 20% instead of 25%, but still pretty generous...if it's approved.

Establish a Health Insurance Tax Credit

The Governor’s proposal establishes a State Based Health Insurance Tax Credit to help ensure Minnesotans on the individual market pay no more than roughly 10 percent of their income on health care. This proposal also provides relief for consumers who do not qualify for the federal tax credit or other state-based health coverage programs. Minnesotans will be able to qualify for the credit beginning with plan year 2021 coverage. Almost 50,000 Minnesotans could be eligible to receive the State Based Health Insurance Tax Credit and see a reduction in their health insurance premium costs by 2023.

The proposed 20% flat discount would be a temporary, immediate program; it's extremely simple so shouldn't take long to implement once approved. Embedding a more formal, structured income-based supplemental subsidy on top of the ACA's APTC subsidies would get more involved, but that's really how it should be done longer-term. Since Congress is unlikely to remove the 400% FPL subsidy cap nationally, Gov. Walz is proposing that Minnesota simply do it themselves.

Again: Let's suppose the benchmark Silver plan would normally cost $600/mo at full price ($7,200/year). Right now, under the ACA subsidy structure, if you earn 100-400% FPL ($12,140K - $48,560K for a single adult), you qualify for subsidies on a sliding scale...but i you're over 400% FPL you don't qualify for any assistance.

That means that if you earn $48,560/year you wouldn't have to pay more than around 9.8% of your income, or $4,700, so you'd receive $2,500 in assistance...but if you earn $48,561, you'd qualify for NOTHING. Walz is proposing to have the state extend that 10% maximum premium up the scale. In the $600/mo example, you'd qualify for some assistance up to $60,000/year, or around 500% FPL.

Provide a Health Care Buy-In Option

Governor Walz’s budget creates a health coverage option for Minnesotans statewide by having the Minnesota Department of Human Services offer a comprehensive platinum-level buy-in product in Minnesota’s individual market 2 called ONECare. This buy-in option will have a provider network and benefit set similar to the MinnesotaCare program, including dental and vision benefits and behavioral health services, which is broader than what is currently available in the market. After an initial startup investment, consumer premiums will pay the full costs to the state for the program.

THAT'S actually the boldest proposal on the list. I'm not sure if this is the same as the actual Minnesotacare Buy-In legislation I wrote about a few weeks ago or a different program, but either way it would be similar in some ways to New Mexico's proposed Medicaid buy-in program.

There's a ton to write about this proposal, but I'm swamped this week so I'll leave it there for now.

Maintain the Health Care Access Fund

Governor Walz’s proposal maintains the Health Care Access Fund by repealing the sunset provision for the Provider Tax which would otherwise expire at the end of 2019. This proposal increases Health Care Access Fund revenues by $992 million in the FY2020-21 biennium. The Health Care Access Fund provides essential health care coverage through the MinnesotaCare and Medical Assistance (MA) programs and supports public health activities through the Minnesota Department of Health. Funding from the Health Care Access Fund will support the Health Insurance Premium Subsidy and the State Based Health Insurance Tax Credit – new programs which will target Minnesotans who currently pay full price for their health insurance on the individual market. Repealing the sunset provision for the Provider Tax maintains essential health programs for thousands of Minnesotans and provides stable funding for Minnesota’s innovative health policy initiatives that promote access to health care, improve the quality of care, and contain health care costs.

Ensure Consumer Choice and Low-Cost Options

Governor Walz’s budget ensures choice and low-cost options for Minnesotans by offering silver- and gold-level buy-in products in any region of the state where the individual market fails to provide options. These market failures – determined by the Minnesota Department of Health – include regions of the state with no product offerings. This approach ensures carriers still have a space in the private market while also ensuring that Minnesotans, regardless of where they live, have access to affordable, comprehensive coverage choices.

This is an interesting twist on the Minnesotacare buy-in proposal above. My reading of it is that he proposes offering a platinum-level public option plan (90% Actuarial Value) statewide, with Silver (70% AV) and Gold (80% AV) versions also offered in low-option regions of the state only, since those would cost less.

Leverage State Purchasing Power to Negotiate Prices and Manage Costs

No one should be forced to choose between medications and basic needs like rent, food and other necessities. Governor Walz’s budget brings down prescription drug prices, increases transparency and ensures access to comprehensive drug coverage statewide by aligning prescription drug benefits for all state health coverage programs and buyin products to better leverage the state’s purchasing power. It also ensures that regardless of the coverage program, people have access to needed medications with more consistent choices, less disruptions, transparent processes and less burden for health care providers.

Not quite the same as Maryland's "All-Payer" Rate Setting system, but it'd be a start.

Address Minnesota’s Disparities in Dental Health

Dental care is essential to overall health. The Governor’s proposal creates a simpler, more efficient and equitable model for purchasing dental benefits by establishing a common administrative structure across all state health coverage 3 programs and buy-in products and increases dental provider rates. This streamlined structure for dental benefits helps dentists serve all patients in their community, improving access to dental care for Minnesotans.

Dental coverage is often given short shrift by healthcare writers...myself included. It shouldn't be, and I'm glad to see that Gov. Walz is putting a lot of his attention on dental and oral health.

Promote Culturally Competent Services

Conventional behavioral health interventions have not yielded the same outcomes within the American Indian population as they have for others. However, traditional healing for American Indians has been very successful. Governor Walz’s proposal focuses on improving access, coordination and referral processes for traditional healing, and includes a multi-generational, multi-disciplinary approach to mental health and substance use disorder treatment.

Good for him. This is something I admit not to knowing much about.

Increase Access to Life-Saving Medication For Opioid Overdose Death Prevention

Governor Walz’s budget provides funding to increase access to naloxone, a medication used to prevent opioid overdose deaths. It can be administered via nasal spray or intravenous injection, and, if given in time, naloxone reverses the effects of an opioid overdose. Additional funding provides an increased ability to promote and expand access and training, which will save lives.

Engage Local Communities in Prevention

The Governor’s budget provides funds for grants to local communities to develop and expand the opioid pilot prevention projects best suited to their populations. Similar pilot programs are successful in Greater Minnesota, including one spearheaded in Little Falls and currently reaching eight other areas of the state. Among other successes, the program resulted in a reduction of more than 600,000 opioids prescribed to patients in 2017.

Expand Access to Opioid Treatment and Services

The Governor’s budget calls for $965,000 in FY2020 and $965,000 in FY2021 and each subsequent year to expand access to opioid treatment and services to incarcerated Minnesotans. These funds will be used to provide pre-release planning services and Medication Assisted Treatment (MAT) within the department’s existing substance abuse treatment programs. Additionally, the budget proposes $365,000 each year for three clinical program therapists and one clinical program director to provide comprehensive pre-release planning services, connect them with community-based services upon release, and follow up to track success.

Provide Mental Health Services for More Students

Untreated mental health conditions can be a significant barrier to learning and educational success. The Governor’s proposal is recommending the expansion of evidence-based school-linked mental health grants to serve approximately 7,000 more K-12 students. Grantees may deliver school-linked mental health services via telemedicine in order to expand access.

Expand Community Behavioral Health Clinics

Substance use disorder and mental illness commonly go hand in hand, but it is rare in Minnesota to be able to get treatment for both conditions in the same place. Certified Community Behavioral Health Clinics (CCBHCs) are an innovative model of care designed to increase access, improve services and serve as a one-stop shop for mental health and substance use treatment. Governor Walz’s proposal expands the use of this emerging evidence-based approach in Minnesota.

Increase Rural Counseling Services

Farmers and other rural residents statewide are experiencing high levels of stress, linked to farm production challenges, financial difficulties, changes in the social fabric of rural living, and other factors beyond their control. The Governor’s budget provides $450,000 to expand on collaborative rural mental health efforts that began in 2017, including one-on-one farmer counseling and a 24-hour hotline – critical resources that are currently not meeting growing demand. Furthermore, the budget proposes the addition of two Farm Advocates to the current team of 10 trained advisors, who provide one-on-one assistance for Minnesota farmers facing a crisis caused by either a natural disaster or financial problems.