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PUBLICATIONS
Summary of Minnesota's
1992 Health Care Reform Law
Minnesota's 1992 health care reform law, The MinnesotaCare
Act , was crafted behind closed doors for 4-5 months before it
was introduced on March 9, 1992 and signed into law five weeks
later.
The MinnesotaCare Act:
- set price controls (growth limits) for all health care
spending (repealed in 1997)
- set statewide managed care guidelines, enacting statutory
permission to deny care for care not considered medically
necessary or cost-effective as determined by state officials or
HMO executives
- initially mandated that all physicians not in HMOs follow a
state fee structure -- the Regulated All Payer Option (repealed in 1995)
- gave anti-trust exemptions to Integrated Service Networks
or vertically integrated HMOs (repealed in 1997)
- permitted only these new vertically integrated HMOs to
calculate premiums taxes as direct patient care expenses. All
other insurers could not count taxes in the minimum percentage
of each premium dollar that must be paid out in direct care of
patients.
- placed all HMOs under the regulation of the Commissioner of
Health (all other insurers are under the Commissioner of
Commerce)
- mandated that HMOs be non-profit
(tax-exempt)
- In addition, the MinnesotaCare Act set
up the Minnesota Health Data
Institute, a public-private contractual partnership between
the Commissioner of Health and 20 private entities known as the
Minnesota Institute for Community Health Information (MICHI).
The private consortium is made up of 20+ representatives of
HMOs, group purchasers, consumers and business. MHDI was
created "for the coordination of efforts related to the
collection, analysis, and dissemination of cost, access,
quality, utilization, and other performance data..."(MN Statute
62J.451) In addition to providing public information, the
Health Data Institute provides a "members-only" intranet that
is only available to state officials and MICHI members.
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- The Minnesota
Care Subsidy Program:
- The Act also expanded Medicaid beyond those with lower
income into the middle class through a federal waiver
(permission to bypass federal Medicaid law).
MinnesotaCare is welfare. The waiver
allows the Department of Human Services to extend Medicaid
eligibility beyond the 100% of federal poverty guidelines to
275% ($45,000 income for a family of four) and to place all
MinnesotaCare recipients into HMOs. This Medicaid expansion
program is called the
MinnesotaCare subsidy
program. All Minnesota Care children and their parents have
100% Medicaid coverage and all childless adults have limited
outpatient coverage, only $10,000 of inpatient coverage.
Premium payments can be from $4/month to over $300/month. Learn about the program's
facts and
funding.
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- Impact on Minnesota's Health Care
Market:
- most Minnesotans have pre-paid health care (large premiums
to cover all health care needs) rather than insurance (low
premiums/high deductibles to cover costs of catastrophic
illness/injury)
- a public-private partnership exists between the Department
of Health and managed care organizations
- HMOs netted $26.8 million on public programs alone in 1995
(1996 Minnesota Managed Care
Review)
- Over 85% of Minnesota residents are enrolled in three major
HMOs who are joined together through the
Minnesota
Hospital and Healthcare Partnership and the Minnesota
Council of Health Plans
- State officals collect health care data without consent
- HMOs own a growing number of hospitals and clinics
- Fewer physicians practice independently
- There has been an exodus of traditional insurers from
Minnesota (at least 60% of previous insurers have discontinued
coverage in Minnesota according to 1997 testimony by the
Minnesota Federation of Insurance). World
Insurance announced on May 3, 2001 their intention to
discontinue new coverage in Minnesota
- Fewer physicians reside in rural areas
- Patients wait longer for appointments with physicians (2-3
months)
- Fewer professionals are working with patients in acute
hospital settings
- Limited provider networks cause rural residents to travel
longer distances to see the network doctor
- There is a growing emphasis on population-based health
rather than individualized medical care.
HMOs Required to
Fund Public Health Initiatives
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Citizens' Council on Health Care
1954 University Avenue West, Suite 8, St. Paul, MN 55104
Phone: 651.646.8935 / Fax: 651.646.0100, e-mail
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