Under new health bill federal assistance could drop in greater Minnesota

One the the Capitol's grand staircases.
One of the Minnesota State Capitol's grand staircases is flanked by Marble Pillars in St. Paul, Minn. on Wednesday, Dec. 14, 2016.
Evan Frost | MPR News 2016

The U.S. House Republicans' health insurance replacement unveiled Monday has Minnesota health executives and policy makers scrambling to identify the implications for the state.

But one analysis shows that federal assistance to pay for coverage would drop in large areas of Minnesota.

Under the new plan people would no longer face IRS fees for failing to buy health insurance. Instead insurers could jack up the next year's rates by 30 percent for people who allowed their coverage to lapse for more than two months.

Just as is the case now, insurers could not turn away people with pre-existing health problems and kids could remain on their parents' plan until age 26.

At a news conference Oregon Republican Greg Walden, chair of the House Energy and Commerce committee, dismissed a question about whether the plan would leave more or fewer Americans with coverage. He said individual insurance market is collapsing.

"Facts are, we've arrived at the scene of a pretty big wreck and we're trying to clean up the mess, and if we don't intercede now fewer people have access to insurance. Period," Walden said.

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In St. Paul, Minnesota Commerce Commissioner Mike Rothman, who regulates insurance, said it's too early to determine what the GOP proposal would mean to Minnesotans.

"Most importantly we want to make sure that for Minnesota that we maintain affordability, stability and access and those things are absolutely critical," Rothman said.

The GOP proposal would distribute $100 billion to the states over ten years to stabilize their health insurance markets and help provide insurance to low income residents. Details are sketchy but it appears states could use the money to create special insurance plans for people with expensive conditions or help insurers recoup unexpected losses.

As for affordability, the GOP plan would give tax credits to more people buying non-group plans, but most would be getting less help than they are now.

Lydia Mitts is with Families USA, which describes itself as a voice for health care consumers. She hopes Americans will get involved in the health care debate now that Republicans have put specifics on the table.

"They would drastically reduce the amount of financial assistance that lower and moderate income people get to help afford the monthly cost of coverage," Mitts said. "People who are lower income and seniors have the most to lose in this plan."

A Kaiser Family Foundation analysis indicates residents in southern Minnesota and much of the western part of the state would see subsidies drop by one-quarter to one-half in three years.

For 60-year-olds in some areas, federal assistance could drop $10,000 a year. In Morrison County, where nearly three out of four voters supported Donald Trump, a 40-year-old making $30,000 would see a drop in federal assistance of $540 — a 15 percent drop.

By contrast, several Twin Cities counties which voted for Clinton would see their assistance levels rise.

The Republican proposal would also cap Medicaid payments to states. Minnesota Council of Health Plans President Jim Schowalter says those payments are critical to insuring many Minnesotans.

"About 15 percent of Minnesotans get help through state public programs and so there's a big impact to the block grants that we're also all going to be having to look at," Schowalter said.

The GOP plan is taking heat from both Democrats and the Republican party's right wing. The group Tea Party Patriots put out a news release demanding a full repeal of the Affordable Care Act, not just tweaks.

But, defending the plan, Walden said it will protect people with pre-existing conditions, not pull the rug out from under Medicaid recipients, and establish a new fund to help low-income Americans afford health care.

"We provide the American people with what we've asked for," Walden said. "And what they've asked for is greater choice, lower cost and flexibility to choose the plan that best suits their families' needs."

None of Minnesota's three Republican members of Congress made themselves available in time for this report.