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MinnesotaCare shift to vouchers off to slow start

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Judie Nyholm
Judie Nyholm, photographed in her Brooklyn Center, Minn. home Friday, Dec. 7, 2012, was dropped from MinnesotaCare and enrolled in a voucher system after she declined to purchase private health insurance because she felt the costs were too high.
MPR Photo/Jeffrey Thompson

The Healthy Minnesota Contribution Program was supposed to shift  4,200 people from the MinnesotaCare program to a voucher system. But the program itself is having a hard time getting off the ground.

Judie Nyholm has not had health insurance since July, when the 61-year-old Brooklyn Center resident was dropped from MinnesotaCare. "One month came up, and I had $52 a month too much for one month, so they dropped me and told me that I could go on the Healthy Minnesota Contribution Program," Nyholm said.

She is the subject of an experiment being discussed on both the state and federal level. Instead of relying on state-subsidized, government-based health insurance, Nyholm became eligible to receive a state voucher of $395 monthly to buy health insurance on the private market.

Nyholm, who gets Social Security benefits and has a part-time job, said the health insurance available to her is either too expensive or inadequate. She said one option that mirrored her $30 monthly premium for MinnesotaCare  would have required her to pay a $10,000 deductible before insurance kicked in.

"If I'm making $19,000 a year with a part-time job and Social Security and I have to pay $10,000 a year for my health care, let's hope to God that I don't get sick," Nyholm said. "That's all I can do is pray that I don't get sick."

Another option was a $5,000 deductible that required Nyholm to pay $261 a month. Nyholm said that deductable is also too high, so she decided to pass on the voucher and go without health insurance.

Nyholm isn't the only one. About 1,200 of the 4,200 people who lost their MinnesotaCare coverage are getting the subsidy, well below the department's initial projections. 

Insurance business
Boys and Tyler Financial Group in Eden Prairie, Minn., offers health and retirement insurance plans. Rep. Steve Gottwalt, R-St. Cloud, the chairman of the House Health and Human Services Reform Committee, is a licensed insurance producer for Boys and Tyler Financial.
MPR Photo/Jeffrey Thompson

"We are seeing fewer people who were previously enrolled in MinnesotaCare who are purchasing coverage through the Healthy Minnesota Coverage Program," said Minnesota Human Services Assistant Commissioner Scott Leitz.

 "As people transition from programs, there's a possibility that you'll see fewer people taking up a newer program then as they transition out of an older one," Leitz said. "For some individuals, it may be that the up-front cost sharing is something they aren't interested in."

The Healthy Minnesota Contribution Program was a top priority for GOP legislative leaders when they took control of the Legislature in January 2011. They initially pushed to give vouchers to nearly everyone enrolled in MinnesotaCare. Their efforts were scaled back when Republicans reached a budget deal with Gov. Mark Dayton in 2011. The move is expected to save taxpayers $36 million over the next three years.

Republican state Sen. David Hann of Eden Prairie is chief author of the Senate bill that created the new program and also sits on the board for the Minnesota Association of Health Underwriters, which lobbied for the bill. 

Hann said the state should share more information with insurance companies about the people who need coverage.

"What some of the insurance folks are saying is that you should allow us to know who those people are who are eligible so we can go and invite them or reach out to them and say, 'here's some things you can look at,'" Hann said.

State privacy laws don't allow the Department of Human Services to share personal information about clients. DFL Rep. Tom Huntley of Duluth is the incoming chair of the House Health and Human services committee.  He wants to hold hearings on the program.

"I'm not opposed to trying some experiments and trying something new, but then you have to analyze it and say did this work or didn't it work? And it doesn't seem to be working," Huntley said.

Advocates for lower income Minnesotans said they want MinnesotaCare to again cover these individuals. But there are problems with that approach.

Expanding MinnesotaCare could cost the state more at a time when Minnesota is facing a $1.1 billion projected budget deficit. A short-term fix may not be worth it since the federal health care law will dramatically change the insurance landscape in 2014.

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