U.S. Rep. Tom Emmer (R-MN) and his home state Democratic colleagues in Congress expressed “serious concerns” about a recent notice from the Centers for Medicare and Medicaid Services (CMS) regarding the amount of 2019 federal funding allotted for Minnesota’s reinsurance program.
Minnesota received a Nov. 30 letter notifying the state it would receive approximately $84.7 million to fund its reinsurance program on the state’s healthcare marketplace, according to a Dec. 10 statement from Rep. Emmer’s office. But the lawmakers said the amount falls about $100 million short of the almost $184 million that CMS originally indicated the state would receive in 2019 for its Minnesota Premium Security Plan.
“A sudden notification that CMS would be reducing federal funding by roughly $100 million just one month before the 2019 plan year has created significant uncertainty for our state, and to date CMS has offered no explanation for why this dramatic reduction in funding has occurred,” wrote Rep. Emmer in a recent letter sent to CMS Administrator Seema Verma and U.S. Treasury Secretary Steven Mnuchin.
Joining Rep. Emmer in signing the letter were U.S. Sens. Amy Klobuchar (D-MN) and Tina Smith (D-MN) and U.S. Reps. Collin Peterson (D-MN), Rick Nolan (D-MN), and Betty McCollum (D-MN).
“We strongly urge CMS to reconsider its decision and provide a level of pass-through funding for Minnesota that more closely matches the figure provided in the original 2017 agreement,” the lawmakers wrote in their letter.
CMS in September 2017 approved Minnesota’s 1332 State Innovation Waiver to implement its reinsurance program, according to the letter. Section 1332 allows federally approved states to waive certain requirements of the Affordable Care Act (ACA) if their proposed application meets specific requirements.
Section 1332 also allows the federal government to help fund such plans via “pass throughs” – or monies that it would have spent on premium tax credits and cost-sharing reductions, among others. And according to CMS, the funding amounts may change annually.
Nevertheless, federal lawmakers representing the state say Minnesota’s federal pass-through funding for 2019 now has been slashed under its Section 1332 waiver.
“Minnesota’s 1332 waiver was an agreement with the federal government to stabilize the state’s insurance marketplace to ensure that more Minnesotans would have access to affordable, quality health care,” the congressional members wrote. “A sudden notification that CMS would be reducing federal funding by roughly $100 million just one month before the 2019 plan year has created significant uncertainty for our state, and to date CMS has offered no explanation for why this dramatic reduction in funding has occurred.”
Minnesota is among seven states to establish a state-based reinsurance program under a Section 1332 ACA waiver. According to a November report from Georgetown University’s Center on Health Insurance Reforms, the state’s reinsurance program instituted this year already has been successful by maintaining rates for 2018 and 2019, stabilizing individual market premiums, and helping to increase enrollment.
Rep. Emmer and his colleagues asked the CMS administrator and Treasury Secretary to answer several questions, including what methods were used to calculate the state’s pass-through funds for 2019; what their explanation is for the $100 million discrepancy; whether the effectiveness of Minnesota’s reinsurance program in reducing premiums was a factor for decreased pass-through funds; and what steps the state can take to avoid any other such funding uncertainty.