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Commentary: For health care, build on what works

By Matt Schmit, Red Wing, MN

Five years ago this month, the Affordable Care Act's early returns were first coming in. Eight million Americans, including over 300,000 Minnesotans, had enrolled through new online marketplaces — reducing our state's uninsured by nearly one-half.

Individuals were no longer denied care due to pre-existing conditions, and young adults gained new coverage options.

Expanded access was encouraging, but many doubted whether the "ACA" was the best fit for Minnesota, particularly given our state's historic commitment to the uninsured working, disabled, or high-risk through MinnesotaCare, Medical Assistance, or the Minnesota Comprehensive Health Association, respectively. But none of those approaches were perfect or without significant cost, either, and the ACA offered real upside.

Following the ACA's first open enrollment, the state was reeling from the failed MNsure rollout. Congress soon would cut essential federal premium stability funding, and Minnesota had yet to experience the worst of a wildly unstable individual insurance market and resulting premium spikes.

Fast forward to 2019: The ACA continues to provide expanded access and coverage of pre-existing conditions, despite successful attempts to undermine it; MNsure has proven itself a useful portal for apples-to-apples comparison of coverage options; and Minnesota's individual market has stabilized.

Various policy challenges persist, though, and the loudest political rhetoric has divided into two distinct camps: Repeal the ACA outright; or replace it with Medicare-for-All, now. However, neither approach seems to consider the downside of such all-or-none politics or policymaking.

Health policy continues to struggle with certain very specific challenges, including how to account for those with complex, chronic pre-existing conditions who are difficult and expensive to cover. Before the ACA, the market provided poor options, and, as a result, Minnesota subsidized coverage of these "high-risk" individuals. Since the ACA, those seeking coverage through the individual insurance market have borne added expense through expanded risk sharing, and now Minnesota buys down that added expense through direct state subsidy and payments to insurers via "reinsurance."

Despite the rhetoric around the ACA, it's important to keep some perspective: The dramatic premium increases of the past several years took place in the individual insurance market, which accounts for less than 5 percent of Minnesotans; roughly 17 percent of our individual insurance market is considered high-risk; and that 17 percent drives a substantial portion of premium costs.

Of course, for those in the individual market, one's "perspective" is very clear: Health insurance has become incredibly expensive and for many, unaffordable.

Although state subsidies have stabilized the individual insurance market, this approach is expensive and was intended to be a short-term "fix" while long-term solutions were developed.

Moving forward, Minnesota could refine its reinsurance regime through added accountability and cost-control measures. Or policymakers in Saint Paul and Washington might consider federal reinsurance or even stabilizing individual insurance markets through separate high-risk pools. Additionally, Minnesota could provide those in the individual market with a new "public option:" the choice to buy into MinnesotaCare — a proven, bipartisan idea for insuring working Minnesotans that has served us well since 1992.

Each of these policy alternatives involves trade-offs. But, if done right, none of them would threaten the level of instability, cost, or extended uncertainty that the current overarching repeal or replace alternatives do. Imperfect as it may be, the ACA is slowly proving that it can provide a policy framework for continued health care reform.

Matt Schmit is a former Minnesota state Senator from Red Wing, where he currently manages a consulting practice and directs the Minnesota Regional Competitiveness Initiative.

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