Big bump coming for MinnesotaCare users

Tens of thousands of low-income residents on one of Minnesota's subsidized health care programs will see a hefty jump in many out-of-pocket costs next year—a likely surprise to those enrollees, who received notices earlier this fall suggesting the costs would remain the same.

State officials finalized cost hikes this week effective for 2016 on MinnesotaCare that vary widely among co-pays, hospital and emergency room visits and other costs. The "working poor" residents on the subsidized program will soon pay $150 for every inpatient hospital visit and $25 for an outpatient stop; both were previously free. The cost of an emergency room visit will jump from $3.50 to $50 and a standard doctor's office appointment is set to increase from $3 to $15.

Those cost hikes, outlined in a letter sent to lawmakers and obtained by The Associated Press, contradict a notice the Department of Human Services sent this fall to all 90,000-plus households on MinnesotaCare plans. That notice, sent between September and October, included last year's lower out-of-pocket costs, labeling them as effective starting Jan. 1 and with little indication that the costs would jump.

Assistant Commissioner Nathan Moracco confirmed those letters went out, calling it a matter of "unfortunate timing." He said the increases hadn't been finalized when the state sent out federally required notices for next year's coverage. Moracco said the department will send out notices with the updated costs in the coming weeks.

Those increases will add to the increasing costs of the low-income program. Some MinnesotaCare enrollees will also be hit with monthly premium increases that range from an extra $8 monthly to an additional $30.

"These are not insignificant increases in the cost of accessing care," said Sen. Tony Lourey, DFL-Kerrick. "Each of them is going to be difficult for these low-income, hardworking Minnesotans."

The state created MinnesotaCare in 1992 to provide health care to the "working poor," serving a gap of residents who make too much to qualify for Medicaid but can't afford private health insurance.

The cost increases were part of a legislative attempt to shore up MinnesotaCare financing as the primary funding mechanism—a tax on health care providers—is set to expire by 2019. Lourey, who chairs the Senate's health care budget committee, said both hikes were the cost of a compromise with House Republicans, who tried to dismantle MinnesotaCare altogether during the legislative session.

And while the monthly premium increases approved this summer will only hit individual enrollees making more than about $17,600 a year, the out-of-pocket hikes will apply to all 90,000 households on MinnesotaCare plans.

But the co-pay increases aren't uniform across the board. Though hospital stays and emergency room visits that don't result in hospital admission will see large hikes, a routine doctor's visit will have a smaller bump and the co-pay when buying a pair of eyeglasses remains unchanged at $25.

Minnesota lawmakers didn't set the increases individually, but merely told the state to adjust the co-pays in order to reduce how much money the state pays in to each plan. In setting the cost schedule, Moracco said the department tried to deter more costly, unnecessary hospital trips and procedures. That's why the state increased the co-pay for a brand prescription medication from $3 to $20, while a generic option only increased $3, to $6.

"To be clear, this is not a plan design that we prefer to do. This is what we were required to do by the House majority in order to save MinnesotaCare," Moracco said.

Those higher co-pays weren't reflected in the notice sent to all MinnesotaCare enrollees.

Moracco acknowledged that the state could have been clearer about the brewing increases, but worried that mentioning an undetermined hike could have caused more confusion. He said the department would consider how to better notify residents about cost increases in the future.