Feds increase spending for MinnesotaCare program

People wearing PPE in a hospital hallway.
Doctors and nurses gather outside of a COVID-19 patient's room at the medical ICU at St. Mary's Hospital at the Mayo Clinic in Rochester, Minn.
Evan Frost | MPR News 2020

As many as 100,000 Minnesotans who earn too much to qualify for Medicaid and not enough to easily afford health insurance are set to benefit from a cash infusion from the federal government to the MinnesotaCare program in 2022. 

The $100 million comes from the Centers for Medicare and Medicaid Services through the American Rescue Plan — the COVID-19 stimulus package signed earlier this year by President Joe Biden. 

“Thanks to the American Rescue Plan, we are making increased investments to protect health coverage access for vulnerable Minnesotans,” said Health and Human Services Secretary Xavier Becerra in a statement. “MinnesotaCare is another strong example of the Biden-Harris Administration working hand-in-hand with states to help more Americans realize the peace of mind that comes with health coverage.” 

Becerra was in Minnesota Wednesday to promote COVID-19 vaccinations for kids age 5-11 and talk about the Biden administration’s plans to lower prescription drug costs. 

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MinnesotaCare is a program created in the early 1990s designed to subsidize health insurance premium costs for those known as the “working poor,” who earn too much to qualify for Medicaid, or Medical Assistance, as it’s known in Minnesota. After the passage of the federal Affordable Care Act, the state retained it as a “Basic Health Program,” and most enrollees pay monthly premiums. 

Basic Health Programs allow states to subsidize insurance for those who don’t qualify for Medicaid or the Children's Health Insurance Program because of their income. 

A tax on hospitals and health care providers originally funded MinnesotaCare. That tax remains in place, although most of the cost of MinnesotaCare is covered by the federal government. Republicans in the Legislature have long argued to end the tax, which now funds other health care programs, but it has survived. 

Minnesota and New York are the only states that offer Basic Health Programs. The Biden administration says it wants other states to follow their example to expand access to health insurance.