MBP Letter: Senate File 1034, HHS Omnibus Budget bill

TO:  Members, Minnesota Senate
FR:   Beth McMullen, Health Policy Director
RE:   Senate File 1034, HHS Omnibus Budget bill

The Minnesota Business Partnership has some concerns with this bill. While we understand the difficulty of addressing program reductions within Health and Human Services (HHS), we also note the spending trend in this budget area is unsustainable in the long term. HHS spending is expected to continue to grow at a faster rate than the economy and projected state revenues.

HMO Surcharge

We have concerns with the surcharge on health plans that would net an additional $80 million for the state. While we appreciate the idea of maximizing federal dollars, the impact of this surcharge on health plans is uneven and will result in increased cost for private consumers of HMOs. This will increase the cost-shift from public programs to a segment of private payers. With the vast number of changes that will imminently be imposed on the market due to the federal Accountable Care Act, we have concerns about the overall impact of the surcharge on health plans in this market.

MinnesotaCare Reform

We recognize potential in the state’s transition from MinnesotaCare to a Basic Health Plan (BHP) as permitted by the ACA. This transition would draw down hundreds of millions of dollars in federal funding. The state should, however, strive to cover MinnesotaCare populations entirely with this funding. It should be more than sufficient to provide equal care to current public program enrollees without additional revenue increases. The state should provide a full accounting of federal funding and transparency relating to its use and distribution over existing and continuing public program structures. The state should not use the creation of a BHP to expand benefits or increase costs to consumers and taxpayers.

This is not meant to be a comprehensive list of our position on the numerous proposals contained in this bill, but rather highlights of some of our main concerns.