HUGE: Minnesota Senate passes MinnesotaCare Public Option as part of HHS omnibus budget!

As I've written about several times, last month New Mexico passed (and Gov. Lujan Grisham signed) the first "true" Public Option bill, which will allow any permanent New Mexico resident to enroll in Medicaid regardless of income via a sliding premium scale. Today there's big Public Option news in another state: Minnesota.

The main distinction between the New Mexico and Minnesota approaches has to do with which existing publicly-funded healthcare program they're based on. While New Mexico went with Medicaid (which half the state's population is already enrolled in anyway), Minnesota is basing theirs on their Basic Health Plan program, MinnesotaCare. I first wrote about this back in February.

As Louise Norris explained:

Under the ACA (aka Obamacare), states have the option to create a Basic Health Program for people with incomes a little above the upper limit for Medicaid eligibility, and for legal immigrants who aren’t eligible for Medicaid because of the five-year waiting period.

In short:

• If you earn up to 138% FPL, you enroll in Medicaid.
• If you earn 138 - 200% FPL, you enroll in a Basic Health Plan policy (BHP).
• If you earn 200% FPL or higher, you enroll in a Qualified Health Plan policy (QHP).

Federal funding for BHP programs is supposed to be equal to 95% of the total amount of advance premium tax credits (APTC) and cost sharing reduction (CSR) assistance that the enrollees would otherwise have been eligible for had they otherwsie enrolled in a QHP using the ACA exchange.

Of course, the state itself can also throw in additional funding to make the BHP plans more generous if they wish...which is a key point to keep in mind. The coverage has to be at least as affordable and at least as good as a benchmark silver plan with Cost-sharing reduction benefits applied.

...Over 1.2 million residents of the [New York & Minnesota] are now enrolled in BHP coverage, or roughly 7.5% as many as are enrolled in exchange-based Qualified Health Plans (QHPs).

...Minnesota Democrats, who now have full control over both chambers of the state legislature and the governor's office at the same time, have decided that they want to transform MinnesotaCare once again into something much bigger. Via Steve Karnowski for the Associated Press:

Lawmakers went to work Wednesday on a proposal to allow all residents to buy into the state-run MinnesotaCare health insurance program, not just low-income workers struggling to get by.

...Under the proposed expansion, premiums would be on a sliding scale that the state would develop later. The state would also develop an option for businesses with under 50 employees to participate.

The change would take effect in 2026, assuming the federal government approves, and eligibility would no longer depend on immigration status. During the transition, the bill would raise state subsidies for “gold” plans purchased through the MNsure exchange for 2024 and 2025.

Well, a few weeks ago a Minnesota House committee passed the bill in question...(which also does some other important things):

On an 11-7 vote, the House Health Finance and Policy Committee approved HF2930 Thursday after adopting a delete-all amendment. The bill’s next stop is the House Ways and Means Committee.

Sponsored by Rep. Tina Liebling (DFL-Rochester), the omnibus health finance and policy bill would lower the new spending from $791.15 million to $769.99 million over the 2024-25 biennium.

The bill, in part, would also:

• require medical assistance to cover medically necessary abortions;
• allow a designated support person for reproductive health care appointments;
• repeal laws limiting abortion access;
• add a “public option” to MinnesotaCare;
• limit-enrollee cost-sharing for prescription drugs;
• establish a direct payment system for MinnesotaCare and medical assistance; and
• eliminate deductibles, co-payments, and coinsurance for medical assistance.

...and, just yesterday, the full Minnesota Senate passed an "omnibus" Health & Human Services bill which would include the MinnesotaCare public option expansion as well:

Saint Paul, Minn. – Today a broad coalition of labor, rural, immigrant, arts and advocacy groups applauded the Minnesota Senate for passing a MinnesotaCare Public Option proposal (SF2995) in the health omnibus budget bill. The MinnesotaCare Public Option expands access to affordable health coverage by allowing more Minnesotans the option of buying into MinnesotaCare, paying a premium based on their income. Organizations and advocates urged lawmakers to adopt the House bill language (HF2930) that allows all Minnesotans without status to access MinnesotaCare. As passed, the Senate bill only allows children without status to access MinnesotaCare, leaving behind thousands of Minnesotans without status who are frontline workers.

The MinnesotaCare Public Option bill expands eligibility to Minnesotans enrolled in the individual health insurance market who earn more than the current MinnesotaCare income limit, which is 200% of the federal poverty line or $55,000 per year for a family of four. The MinnesotaCare Public Option immigrant inclusion policy would end the ban on eligibility for undocumented immigrants, allowing them to enroll in MinnesotaCare and contribute to their coverage at the same affordable premiums paid by other Minnesotans at their income level.

Setting aside the issue of allowing all undocumented immigrants to participate vs. just undocumented children, this is still a massive step forward.

From the text of the (extremely long & densely-worded) bill itself:

Sec. 18.  Minnesota Statutes 2022, section 256L.04, is amended by adding a subdivision to read:

Subd. 15.  Persons eligible for public option. (a) Families and individuals with income above the maximum income eligibility limit specified in subdivision 1 or 7 but who meet all other MinnesotaCare eligibility requirements are eligible for MinnesotaCare. All other provisions of this chapter apply unless otherwise specified.

(b) Families and individuals may enroll in MinnesotaCare under this subdivision only during an annual open enrollment period or special enrollment period, as designated by MNsure in compliance with Code of Federal Regulations, title 45, parts 155.410 and 155.420.

EFFECTIVE DATE. This section is effective January 1, 2027, or upon federal approval, whichever is later, subject to certification under section 32. The commissioner of human services shall notify the revisor of statutes when federal approval is obtained.

One key change is that it looks like they've bumped out the implementation date by a year to 2027. It's also interesting to note that while those currently eligible for MinnesotaCare (in the 138 - 200% FPL income range) can enroll year-round, the expansion restricts enrollment for those over 200% FPL to the normal Open Enrollment (and Special Enrollment) periods available for ACA exchange enrollment.

As for the sliding scale premium pricing, that hasn't been determined yet, although children up to age 20 wouldn't be charged any premium regardless of income, which is interesting:

(d) The commissioner shall establish a sliding premium scale for persons eligible through the public option under section 256L.04, subdivision 15. Beginning January 1, 2027, persons eligible through the public option shall pay premiums according to this premium scale. Persons eligible through the public option who are 20 years of age or younger are exempt from paying premiums.

It looks like the omnibus bill is now winding its way through the Minnesota House. Assuming it makes it through to full passage I'll do another update on it, since it includes a bunch of other important healthcare stuff as well.