MMA Joins Others to Urge CMS to Correct Federal Funding Formula for MinnesotaCare

February 17, 2022

On February 14, the MMA joined the Minnesota Hospital Association, the Minnesota Council of Health Plans, the Minnesota Chamber of Commerce, and the Minnesota Business Partnership to again urge the Centers for Medicare and Medicaid Services (CMS) to correct how CMS calculates federal contributions to MinnesotaCare, the state’s basic health program (BHP). Based on the flawed formula CMS has used, federal funding for MinnesotaCare is lower than it should be. 

The federal government usually bases its contribution to BHP programs, such as MinnesotaCare, on 95% of the cost of the second lowest-cost silver plans in the individual market. To help address the affordability and stability of individual insurance product premiums, Minnesota implemented a state reinsurance program in 2017, expecting that federal funding for MinnesotaCare would not be affected. The federal government approved Minnesota’s reinsurance program and issued a waiver permitting federal subsidies for individual insurance products to continue as if the reinsurance program was not in place; it did not, however, approve the expected pre-reinsurance program level of federal funding for MinnesotaCare.   

Earlier, CMS acknowledged that the formula should be corrected, but the change has not happened. The joint letter urges CMS to act quickly to reimburse Minnesota for these federal savings, otherwise known as “pass-through funding.” 

All members of the MMA Congressional delegation are in support of this change. Staff will continue to inform MMA members of the progress of this advocacy effort.