Senate Committee Hears Public Option Legislation

May 2, 2024

The Senate Commerce and Consumer Protection Committee heard legislation on April 30 allowing more Minnesotans to purchase health coverage through MinnesotaCare, by offering a “public option.” 

Last session, the Legislature passed a bill to implement a public option by 2027, following a study into the applicability of a future MinnesotaCare buy-in program. An actuarial analysis of provider reimbursement rates was part of that study. 

MMA policy says it will oppose a public option if the reimbursement rates are below the Medicare standard. If the percentage of patients enrolled in a public program becomes too high, practices will not be able to continue to stay in business unless the reimbursement rates are increased. However, increased reimbursement rates would increase the cost to the state. The current legislation would establish the reimbursement at Medicare levels. 

A group of stakeholders including hospitals and health plans voiced opposition to the public option legislation. In a letter to the committee, the group argued that the study “does not express the full cost of creating, administering, and providing necessary technological support for this new state government program. On the contrary,” the letter goes on to note, “the Department made clear that the report does not capture the full fiscal impact to the state or the health care system more broadly.” 

The legislation (SF 4778 Wiklund, DFL – Bloomington) is supported by organized labor and trade unions, who argue that a public option would significantly reduce underinsurance and offer an affordable option to Minnesotans who are currently forced to purchase high deductible plans to reduce premium costs. 

The public option language was originally included in SF 4699 (Wiklund), the health and human services omnibus bill, but was removed in the Senate Finance Committee after a bipartisan vote. It is still alive in a commerce committee bill that is moving in the House.