The governor’s budget proposal and the Senate Republicans’ budget bill that passed out of Finance Committee before break contrasted a stark difference in priorities.
The Senate Republican bill has a $0 target and included additional funding only for health care enforcement within the Department of Commerce. The Dept. of Commerce was the only department not to receive an operating cost increase in the last budget cycle. The Senate bill also includes controversial policy that ties the hands of the department in their ability to assess fees to regulate financial institutions.
The governor’s proposal, on the other hand, included additional funding for operating costs as well as funding for modernizing the state’s unclaimed property system and cybersecurity upgrades.
The Department of Commerce plays an important role in regulating insurance companies and financial institutions, and underfunding the department puts Minnesota consumers at risk.
The bill will go into conference committee with the House, so it is uncertain what the commerce budget will look like by the end of session. (SF 2474)
The Senate Commerce Committee once again put together its annual omnibus liquor bill. The bill traditionally contains noncontroversial changes to the state’s liquor laws as well as liquor licenses for local establishments that require state approval.
This year’s bill is no different – it contains noncontroversial language that helps municipal liquor stores as well as provisions for liquor licenses at various local arenas and community centers.
However, controversial liquor issues remain part of the conversation, including raising the limit on the number of barrels of beer a microbrewery may sell as growlers. A number of the state’s microbreweries are at or near the state’s cap of 25,000 barrels a year and need the cap lifted to continue to grow as businesses. However, there are concerns from opponents that lifting the cap will allow microbreweries to act as large breweries while maintaining the benefits of being a microbrewery and that lifting the cap will hurt local liquor stores and other liquor establishments.
Other issues being discussed include allowing brewstilleries – businesses that act as microbreweries and microdistilleries – to obtain both a cocktail room license, needed to serve spirits, and a taproom license, needed to serve beer or malt liquor. State statute prohibits this – proponents of maintaining the prohibition argue that it protects the state’s three-tier liquor system.
Selling wine and beer in grocery stores and other expansions of the state’s liquor laws are often part of the conversation as well.
The liquor bill passed off the Senate floor with no controversial provisions. The House still needs to vote on the bill, so it remains to be seen what all will be included in the final version of the bill. (SF 2013)
Minnesota passed a program in 2017 to lower the cost of health care premiums for plans offered on the individual health insurance market. The bill allocated $542 million to insurance companies to help mitigate the risk of high-cost claims; it was a two-year program set to expire this year.
The Senate passed a bill off the floor before break that would allow the program to continue through 2022, using already allocated funds that remain unspent since the 2017 authorization.
The program was part of many factors that did lower the average cost of premiums on the individual market in 2018 and 2019; however, it also came with problems. The federal government reduced the amount of money sent to Minnesota for other health care programs by more than $200 million after approving the reinsurance program, and it unexpectedly cut another $100 million in funding last December. Further cuts to federal funding for the program may be expected.
Beyond federal funding issues, many Senate DFLers are concerned that this plan sends more than a half-billion dollars in state money to insurance companies but did nothing for direct consumer premium relief or to achieve long-term, sustained rate reductions.
A number of DFL amendments were offered on the floor that aimed to improve the bill and protect consumers, but all but one, which added a reporting requirement, failed to make it into the bill.
The bill passed off the Senate floor 37-28. The bill was heard in the House Commerce Committee and was then sent to the House Health and Human Services Committee, where it has not received a formal hearing.
Governor Walz has offered a number of alternatives to lower the cost of health care on the individual market, including a direct subsidy and tax credits for consumers on the individual market, as well as the OneMinnesota health care plan. None of these alternatives have been given a hearing in the Senate.
It remains to be seen what will happen with reinsurance and the health care conversation in general, but it will certainly be part of the discussion as the legislature moves closer to the end of session. (SF 761)
This information is also included in the HHS Section.
Right to Shop Act
The Senate Republicans’ proposal for a health care fix was heard in Commerce this year. SF 3, known as the Right-to-Shop Act, requires the Dept of Health to develop a web-based system for consumers to use to compare average costs of health care services by procedure.
Consumers would use that information to “shop around” for health care services. If the consumer opts to have their procedure done at a lower price point than the allowed amount paid, 50% of the money the insurance company saves is deposited into an account for the consumer that had the procedure done. That consumer may then use the money to pay for co-payments, coinsurance, or deductibles.
Proponents of the bill argue that it creates a win-win scenario for patients and insurance companies, as both save money and the consumer can then use that saved money to pay for other health care costs, essentially stretching their health care dollars. However, the bill puts much of the onus on consumers to find savings for the insurance company and focuses on the cost of care instead of quality, which may be detrimental to consumers. It became clear very quickly in committee that the author of the bill had not involved health care stakeholders in the conversation and that the bill needed a lot of work and further discussion before it could be moved forward.
Despite the bill being a Senate Republican priority, it was tabled in committee and missed deadlines. The companion bill has not been heard in the House, and it is unlikely the proposal will move forward this session. (SF 3)
Direct primary care
A bill that establishes a direct primary care system has passed off the Senate floor 67-0 and is awaiting action in the House.
Direct primary care service arrangements are agreements between primary care providers, typically a doctor or specialist, and a patient that allow the patient to pay for services out of pocket without going through insurance. Doctors charge a monthly fee to provide routine medical care. Other more serious, time consuming, or equipment-heavy procedures are covered by an insurance policy – if the patient has one.
Direct primary care arrangements already exist in Minnesota; the passed legislation adds guard rails to the system. A number of amendments adopted in Commerce Committee before the bill was sent to the floor made the bill more consumer-friendly. (SF 277)