Minn. Budget Puts Squeeze on Nonprofit Health Plans

Minnesota’s new two-year budget cuts or delays $435-million in payments to nonprofit health plans that manage subsidized care for half a million low-income residents, reports the Associated Press.

The trims represents nearly 15 percent of the $3-billion in state contracts held by HMO’s and include funds to be withheld unless the plans meet targets for reducing emergency-room visits, hospitalizations, and readmissions.

While their battle over taxes and social spending culminated in the state’s recently ended government shutdown, Democratic Gov. Mark Dayton and Republican lawmakers were in harmony on efforts to cut health-care spending and scrutinize contracts with providers.

Lucinda Jesson, the state’s human-services commissioner and a Dayton adviser, said the cuts were made “knowing what the industry could bear.” But a spokeswoman for the Minnesota Council of Health Plans said the state moves could end up simply shifting costs to privately insured patients.

“Just reducing a premium or capping a premium or cutting what you’re going to pay doesn’t reduce the cost of health care,” the council’s Eileen Smith said. “It reduces the state’s cost, but health insurance is expensive because health care is expensive.”