In 1976 a long standing health program, called the Minnesota Comprehensive Health Association was initiated by the legislature to provide coverage for those
people with costly pre-existing health conditions. Without a change in federal rules this would cost the insurers
more than $ 60 million a year.
With the coming of the Federal Affordable Care Act in
2014, cover could not be refused to those with pre-existing conditions. To
balance the expenses evenly, federal law will give these health plans
reinsurance, if they have too many patients with costly care conditions.
The money comes from a fund that insurers across the
country pay into, but Minnesota will not be able to avail these funds said
Kirby Erickson, executive director of the Minnesota Comprehensive Health Association. MCHA has already
covered residents with pre-existing conditions. The present laws would allow
the residents maintain this cover.
Minnesota official's argument with the federal
government was that MCHA should be allowed to collect reinsurance payments
though present rules did not allow this.
The money that's going to be deposited by insurers in
Minnesota probably won't end up here - it will end up elsewhere in the country,
"said Erickson. "It's kind of like getting double billed."
The issue was being reviewed by federal officials, since unless the
issue was remedied, state officials feel Minnesota will be heavily penalized
for their foresight.
State Rep. Jim Abeler, a Republican from Anoka is not too optimistic.
MCHA is known as a high risk pool -and one of the states in the country to
create this program is Minnesota. It is the largest in the country with 26,000
members. Though MCHA was created more than 30 years ago, this nonprofit group is not funded by tax payer money.
Minnesota is known for the lowest number of residents who lack health
insurance, even before the health care law Minnesota is known to sort out the
most difficult of problems in the health insurance market - like getting
insurance cover for people with serious health issues. If
high-risk pools are not allowed to participate in the transitional reinsurance
program and they continue to exist for some period of time, carriers would pay
both the federal reinsurance assessments as well as assessments for the MCHA
program," state officials wrote in the Dec. 31 letter.
"An analysis by MCHA of their members whose annual
claims exceed $ 60,000 suggests that minnesta carriers would pay over $ 60 million
in 2014 to care for members of MCHA that could be paid for by the Federal
This problem could be sorted if MCHA was closed by 2014
and all the people under it could move to the Health Insurance Exchange - where
under the federal law all individuals could shop for insurance.
Through the federal exchange reinsurance could be sought
for and insurers and subscribers would not have to fund #136.5 million, which
was the assessed amount in 2011.
There are reasons why Minnesota officials don't want to
do this as they feel people under the MCHA cover will take time to get familiar
with the new marketplace, and if all 26,000 members were to move into the
health exchange program in 2014, the premiums would rise steeply, causing many
people to drop insurance cover. There are some under MCHA with serious health
"Our concern is that you don't want people losing
coverage," said Julie Brunner, executive director of the Minnesota Council of
Health Plans. You have to have a smooth transition."
Delaying the transition may be a bad idea since the
Affordable Care Act will be offering $10 billion for reinsurance in 2014, $6
billion in 2015 and$ 4 billion in 2016
"Individuals in high risk pools will have the greatest
financial incentives to participate in an exchange," wrote the American Academy
of Actuaries in its December letter. "Prohibiting this population from
participating immediately in the individual market, particularly in an
exchange, could be unfair."
But if the federal government does not allow MCHA to
collect reinsurance payments the program may have to close.
Christopher Snowbeck Pioneer Press