What Does Trump’s Health Care Order Mean for Minnesota Companies?
When President Donald Trump signed a surprise executive order on Thursday, October 12, designed to improve health care insurance options for employers, it set off a scramble to sort out what it could mean for companies and insurers in Minnesota.
In the wake of the move, business representatives were cautiously encouraged about potential new health care options for small employers. In the short term, Minnesota insurers say that the move will have little effect on the 2018 market for individual health plans in the state.
“Generally speaking it’s really welcome news,” said Bentley Graves, Director of Health and Transportation Policy for the Minnesota Chamber of Commerce, who noted that smaller businesses continue to face challenges in offering cost-effective health care insurance for employees.
“This may present some more opportunity, but we’ll have to see what the specifics are,” said Graves. “We’ve consistently heard from those members that they need more and better options.”
The White House also plans to end so-called cost-sharing reduction (CSR) subsidies, federal payments to insurers for coverage provided to lower income individuals under the Affordable Care Act (ACA). But at the same time, there were signals that the President might still support a bipartisan deal in Congress to retain those payments.
Trump’s move is designed give small businesses greater access to association health plans (AHPs) allowing firms to band together to get insurance at more competitive prices, creating options for short-term health insurance and expanding health reimbursement arrangements (HRAs), which could be established by employers for employees to purchase health care. The specifics remain unclear. Trump’s order directs federal agencies to develop new proposed regulations over the next 60 to 120 days.
Abir Sen, co-founder and CEO of Minneapolis-based Gravie Inc., calls Trump’s move a “mixed bag.” Gravie, founded in 2013, helps employers and employees navigate and find health insurance options. In July, Gravie announced landing $14.1 million in its latest round of financing.
In an email to Twin Cities Business, Sen noted:
- “Enabling employers to give pre-tax money to their employees in a Health Reimbursement Arrangement to buy individual insurance policies is a good thing. It gives people more choices, and draws more people into the individual market pool, enhancing its stability.”
- “We are cautiously optimistic that expansion of association plans will be implemented in a way that adds to additional choices for small and mid-size businesses, especially those that are facing double digit premium increases in the traditional group market.”
- “Suspending the cost-sharing subsidies potentially hurts the stability of insurance markets nationwide, though Minnesota is somewhat protected due to the steps taken by the State government earlier this year.”
Several states launched immediate legal challenges to Trump’s order. Minnesota Attorney General Lori Swanson announced joining a multi-state lawsuit to block the federal government from cutting cost-sharing payments to insurers. On Friday, reports indicated that 18 states and Washington D.C. were part of the lawsuit attempting to block Trump’s plan.
The state of Minnesota operates MNsure, a health care exchange created under ACA where residents can shop for individual insurance policies. For 2018, four insurers – BluePlus, HealthPartners, Medica and UCare – are offering more than 80 different health plans through MNsure. The open enrollment period starts on November 1 and runs through January 14, 2018.
MinnesotaCare is a separate state health plan available to low-income Minnesotans.
Minnesota insurers say that Trump’s move won’t change health plan offerings for 2018 for individuals shopping for insurance.
“The decision by President Trump to end CSR payments will not change Medica consumer’s current health plans or change the options available to them in 2018. Consumers who qualify can still purchase a plan with lower out-of-pocket costs,” said Geoff Bartsh, vice president of individual and family business for Minnetonka-based insurer Medica, in a statement. “This decision also has no impact on premium subsidies available to the vast majority of consumers. Our premiums for 2018 anticipated this action and were increased previously to account for it. The bottom line is that we anticipated this action in our filings and we are prepared.”
Other insurers echoed that sentiment.
“UCare is committed to providing sustainable health coverage in 2018 for individuals and families buying their own insurance through MNsure. While next year’s UCare Choices rates are not affected by today’s cost-sharing reduction (CSR) news, we support continued efforts to provide Minnesotans of all incomes with affordable and stable health plan choices in the marketplace,” said Ghita Worcester, Senior Vice President of Public Affairs and Chief Marketing Officer for Minneapolis-based UCare.
Catherine Scott, a spokeswoman for Bloomington-based HealthPartners, said: “We’re still evaluating what these decisions mean, but we don’t expect to see any changes that would affect health plan choices for 2018.”
Late Friday afternoon the state of Minnesota issued a joint statement from Minnesota Department of Human Services Commissioner Emily Johnson Piper, Minnesota Department of Commerce Commissioner Mike Rothman, and MNsure CEO Allison O’Toole.
“The Trump Administration’s decision to abruptly end these cost-saving federal subsidies is very concerning. We are still working to analyze the future impacts this decision will have on the Minnesotans who rely on MinnesotaCare and individual health insurance policies,” the statement read. “It is important for Minnesotans who purchase their health insurance on the Individual Market to know that while the President’s action will almost certainly create higher health insurance costs in the years ahead, it will not immediately impact health insurance rates or federal tax credits available during Minnesota’s upcoming open enrollment period. We encourage Minnesotans who purchase their health insurance on the Individual Market to shop for coverage on MNsure beginning November 1, 2017. MNsure remains the only place Minnesotans can access cost-saving tax credits, which average over $7,000 per year.”