State Task Force Recommends Expanding MinnesotaCare, Reinstating Provider Tax

[MMA News Now, Jan. 21, 2016] A 29-member panel made up of physicians, legislators, insurers, other health care providers and consumers concluded its work Jan. 15 with a recommendation to increase MinnesotaCare eligibility from 200 to 275 percent of the federal poverty level and to reinstate the 2 percent provider tax. 

The tax, which the MMA has long opposed, is a 2 percent tax on physicians’ and other health care providers’ gross revenue. It is currently set for repeal at the end of 2019. 

The reinstatement recommendation was just one of 33 that also included changes to health care financing, MNsure, eligibility for health insurance programs, data sharing and other issues. 

The legislatively appointed Health Care Financing Task Force has been meeting for more than six months. MMA members Marilyn Peitso, MD, a pediatrician from CentraCare in St. Cloud and MMA Board of Trustee member, and Penny Wheeler, MD, president and CEO of AllinaHealth, served as members of the group.

Included in the provider tax recommendation is language calling for more stringent rules on how provider tax dollars can be used by the Legislature. Since 2004, more than $1 billion has been shifted from the Health Care Access Fund (HCAF) to the General Fund for purposes other than funding MinnesotaCare, the original purpose of the provider tax. Task force members acknowledged that shifts of funds out of the HCAF remain a significant problem, but the new statute will not prevent future raids.  

Physician members of the task force attempted to weaken the provider tax reinstatement language but were unsuccessful.  

The package of recommendations also includes provisions to increase eligibility for MinnesotaCare to 275 percent of the federal poverty level, up from the current 200 percent level, as well as a provision to extend MinnesotaCare to undocumented immigrants to 200 percent of poverty. These recommendations are intended to address affordability of coverage, particularly for low-income individuals purchasing private coverage on MNsure.The group had significant discussions about changes to the state’s insurance exchange, but ultimately recommended that Minnesotans stick with MNsure instead of shifting to the federal exchange.  

Also included in the package is language urging the Legislature to modify state law to conform with HIPAA. Minnesota remains one of the only states in the nation to operate under a different, stricter standard than HIPAA, a discrepancy that creates disruptions in securely sharing patient data for the purposes of providing and coordinating care among various providers. The MMA has long advocated for HIPAA alignment at the Capitol, though it remains controversial among some in St. Paul.

The recommendations will be formally presented to the governor later this month. It is unclear whether the package will gain any traction at the Capitol. With the state’s general fund approaching a $2 billion surplus and a $586 million surplus in the HCAF in 2017, many legislators – particularly the majority Republicans in the House – will be unlikely to repeal the sunset of the provider tax at this time. Recommendations that increase spending are also likely to face a tough path in the House.