State Representatives John Poston and Ron Kresha, along with Senator Paul Gazelka, voted last legislative session to give the gift of tax payer money to non-profit Health Maintenance Organizations licensed to sell medical insurance in Minnesota.
Edward Ehlinger, Minnesota’s Commissioner of Health, called the action reckless. Since the Republican bill was enacted in 2017, Medica, one of Minnesota’s medical insurance non-profits, has begun the process of transferring $90 million of taxpayer money out of Minnesota.
Here’s how it happened, according to Tina Liebling, a seventh term Rochestor area State Representative and a leader amongst the DFL on medical insurance issues.
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“You remember there was a big issue last fall (2016) that insurance rates were very high for a lot of people who had to buy their own insurance on the individual market,” Liebling said.
Governor Dayton suggested giving those people a twenty-five percent State funded discount. He wanted to call a special legislative session, in the autumn of 2016, to enact the legislation to help vulnerable Minnesotans. The Republicans nixed the idea.
“So we came into session in January (2017) and now the Republicans decided to go ahead and do what the Governor had wanted earlier,” Liebling said.
Kresha, Poston and Gazelka, among other Republicans, knew Dayton wanted the twenty-five percent discount for those who couldn’t get help from Obama Care. They knew he’d sign that bill. So they made a trade.
“One of the things they buried in that bill was to allow for-profit insurance to be sold in Minnesota,” Liebling said. “For many years we did not allow for-profit insurance companies like United Health to sell insurance in Minnesota.”
“They also repealed a little section of the law that required our non-profit HMOs, like Medica or Blue Cross, to use their reserves - their extra assets - only for health care.”
Liebling says that most of those reserves come from State funded programs like Minnesota Care and Medicaid.
“When somebody goes on Medicaid, for example, the State contracts with these companies to provide insurance for that person,” she said. “The Minnesota Department of Health negotiates a premium rate. It’s a very complex process and many legislators over the years have become very distrustful of how that’s done. The HMOs play with the numbers and we overpay them.”
So the overpayments pile up and the companies say they are reserves and that they belong to them. Liebling doesn’t exactly disagree that they belong to the HMOs but under the old law the reserves could be used to hold premium costs down.
“Every time the State negotiates rates with them we try to get rates that the federal government calls actuarially sound,” Liebling said. “So how much they have in reserves plays into this idea that they must be sound. They have millions of dollars in reserves and it’s mostly the taxpayers’ money. It ought to go back to being used for health care for Minnesotans.”
Once the new law was enacted the HMOs acted swiftly. In March, Medica transferred $30 million to shore up a non-profit Wisconsin subsidiary. Then, in August 2017, Medica began transferring $60 million of its Minnesota reserves to a non-profit in Pennsylvania and that non-profit will in turn transfer the money to Medica Insurance Company which is a for-profit company, according to Liebling.
Liebling has asked the Department of Health to conduct some over sight into the draining of Minnesota’s HMO reserves into other states. Commissioner Ehlinger has responded by saying that the legislation was drafted rapidly and carelessly and that the Legislature gave him no guidance on the matter. His hands are tied, he says.
“I would welcome additional legislation by the Legislature in 2018 to remedy this situation and ensure that MDH has sufficient legal authority to protect the non-profit assets, paid by all premium-paying Minnesotans, into the bank accounts of our local HMOs,” he wrote in a letter to Liebling on November 17th.
Since MDH won’t act, Liebling has asked the Governor to act to halt the transfer of the $60 million to the for-profit insurance company, but she doesn’t sound hopeful.
“The Governor and the Department of Health are too meek,” she said. “They need to stand up and not give away our money. They need to fight for the people.”
“It’s eleven percent of Medica’s entire reserves and I don’t know how they managed to get themselves in this position. We don’t even know who sponsored that bill,” Liebling said. “But that money should stay in Minnesota and be used to reduce rates for Minnesotans.”
Gazelka, Kresha, Poston and their legislative cronies don’t see it that way. They believe supporting insurance companies is more important then supporting Minnesotans.
Tina Liebling is seeking the DFL endorsement for Governor. Learn more here https://www.tinaliebling.com
This column originally appeared in the Long Prairie Learder. http://lpleader.com
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