New State Analysis: Public Option Could Cost Minnesota Taxpayers Hundreds Of Millions Of Dollars

ST. PAUL, Minn. – As some politicians ignore the warnings of Minnesota leaders and instead rush forward with legislation to create a new state government-designed “public option” health insurance system, a newly released analysis commissioned by the Minnesota Department of Human Services warns that it could cost Minnesotans hundreds of millions of dollars in higher taxes.

The analysis, conducted by Milliman, finds that “the portion of PO coverage that would need to be funded by state-based sources such as a premium tax or general tax, will be approximately $208 million in CY 2027, $246 million in CY 2028, and $273 million in CY 2029.”

A new poll finds that a majority of Minnesota likely voters do not support creating a new state government public option. The poll finds that most Minnesota voters would prefer to improve upon the state’s current health insurance system over creating a state public option. It also found that most would not be willing to pay any more in taxes (72%) or health care costs (76%) to fund the creation of a state public option – including a majority of Democratic voters, 57% of whom would not be willing to pay more in taxes and 65% of whom would not be willing to pay more in health care costs.

At the same time, a new report by Lanhee J. Chen, Ph.D., Tom Church, and Daniel Heil sheds additional light on the potential negative consequences a public option could have for Minnesotans, warning that “any significant shift in exchange enrollment to a MinnesotaCare public option would result in significant cuts to providers … This could reduce payments to Minnesotan hospitals by $2.3 billion over 10 years, with large risks for critical access hospitals and hospitals in rural areas.” The report also shows that the public option has failed to deliver on its promises in the states where it has been tried.