Public Option Bill Heard in Senate Committee

March 14, 2024

A bill that would expand eligibility for MinnesotaCare, allowing anyone to buy into the program as part of a public option on MNsure starting January 1, 2027, was heard in the Senate Health and Human Services Committee on March 14.  

The proposal (HF 4778, Wiklund, DFL – Bloomington) implements elements of a report by the Department of Commerce, which examined possible implementation of public option and included actuarial analysis of provider reimbursement rates. 

Reimbursement rates in the legislation are set at Medicare rates. The MMA has long advocated for any future public option program to include sustainable reimbursement rates so providers can receive adequate compensation for their services while allowing patients access to the healthcare they need.  

Supporters of the public option argue that it is needed to address the severe problem of underinsurance caused by patients purchasing high-deductible products that do not provide adequate coverage. Opponents argue that adding more Minnesotans to public programs that pay low reimbursement rates will increase financial pressures on clinics and hospitals. 

In addition to adequate reimbursement rates, the MMA policy states that any public option must decrease the rate of the underinsured in Minnesota, or the percentage of covered Minnesotans with cost-sharing burdens that exceed 10% of household income. To that end, the public option may not offer plans with actuarial values below 70%. 

The bill was laid over for possible inclusion in the Senate Health and Human Services omnibus bill. 

The committee also heard a bill introduced by Sen. Wiklund (DFL – Bloomington) that would update the medical assistance reimbursement rates for physician services and mental health services. As drafted, the bill will tie the Medical Assistance reimbursement rate to 100% of the Medicare payment rate. It would also implement an annual adjustment similar to the Medicare payment updates. 

While there is support to increase the reimbursement rates, it is unclear whether there is support to pay the large cost to do so, especially in this non-budget year session. This bill was discussed but not acted upon.