Four MN Insurers to Return $73M to State

HealthPartners, Medica, Blue Cross and Blue Shield of Minnesota, and UCare last year agreed to cap their 2011 profits from insurance coverage to low-income Minnesotans at an amount equal to 1 percent of revenue; they pledged to return the rest to taxpayers.

Four of the state's largest health care insurers will collectively return $73 million to taxpayers as a result of an agreement made last year, Governor Mark Dayton's office announced Tuesday.

HealthPartners, Medica, Blue Cross and Blue Shield of Minnesota, and UCare-which manage the Medicaid and MinnesotaCare government health plans-agreed last year to cap their 2011 profits from the two plans at an amount equal to 1 percent of revenue and return the rest to taxpayers.

About half of the money will go to the state general fund, and the rest will be returned to the federal government, which provides matching dollars to the state for Medicaid and MinnesotaCare, according to a Star Tribune report. MinnesotaCare is a program aimed at providing insurance coverage to low-income, working Minnesotans.

Based on financial reports that the four companies filed with the state, Bloomington-based HealthPartners will pay $31 million, Minnetonka-based Medica will pay $25 million, Eagan-based Blue Cross and Blue Shield of Minnesota will pay $9 million, and Minneapolis-based UCare will pay $8 million. The financial reports will be audited and verified by firms contracted by the Minnesota Department of Commerce, Dayton's office said.

“At a time when state budgets grow ever tighter, it is more important than ever that we get a handle on escalating health care costs,” Human Services Commissioner Lucinda Jesson, who negotiated the 1 percent cap, said in a statement. “Going forward, the Department of Human Services will continue to look for ways to do business in smarter, better ways for the people of Minnesota.”

When former Governor Tim Pawlenty was in office, each of the four nonprofit health insurers was awarded a three-year contract to manage the state health plans; the contracts expired in 2011. Dayton's office said that these contracts are now competitively bid-an approach which, along with other health care reforms, will generate more than $500 million in savings for the state and federal governments.