MNHCF Response To State ‘Public Option’ Report

‘Public Option’ Could Threaten Minnesotans’ Access To High-Quality Care

ST. PAUL, Minn. – Minnesota’s Health Care Future (MNHCF) issued the following statement today after the Minnesota Department of Commerce delivered a report and recommendations to the Legislature regarding the proposed creation of a public option health insurance system in the state.

“As the Department of Commerce acknowledges, the report they have delivered to the legislature lacks critical information that would allow Minnesotans and their elected representatives to better understand the costs and consequences of creating the public option.

“The public option has failed in the states where it has been tried, and research warns that creating the same unaffordable new health insurance system in Minnesota could threaten patients’ access to affordable, high-quality care, especially in rural and underserved communities where it could put vulnerable hospitals at even greater risk.

“Minnesota is a leader among states when it comes to health coverage and quality care. Given the facts, it would be deeply irresponsible for legislators to push ahead with the creation of this new health insurance system that could put Minnesotans’ care at risk. We urge policymakers to instead come together to improve on what is already working to expand access to health coverage and care for every Minnesotan.”


Analysis Warns ‘Public Option’ Would Have Negative Consequences For Minnesota Patients

An analysis conducted last year by economists at FTI Consulting, an independent global advisory firm, found that creating the “public option” or “state government option,” would harm Minnesotans’ access to affordable, high-quality health care. 

  • The analysis warned that the public option would reduce the uninsured rate by only 0.5 percent but could lead to revenue losses for hospitals that are especially harmful for patients’ access to hospital care in rural and underserved communities.
  • Read the full FTI Consulting analysis here.

The ‘Public Option’ Has Failed In The States Where It Has Been Tried

In Washington state, the first to fully implement a state government public option, the system has been plagued by unaffordable costs and low enrollment. And despite bold guarantees from state officials, it has done almost nothing to lower the state’s uninsured rate.  

  • Proponents of Washington’s public option estimated public option plans would have premiums five percent to 10 percent lower than traditional plans on the exchange. 
  • Instead, public option premiums in the first year of implementation were, on average, 11 percent higher than the lowest silver plan premium available in each county on the marketplace. In some cases, public option plans cost up to 29 percent more than private plans.
  • Two years after the state government public option was implemented, POLITICO reported that “costs have not come down enough yet to make a real dent in affordability or in the rates of uninsured and underinsured” and “the policies haven’t yet achieved the kind of sweeping change that proponents had hoped.” 

Meanwhile, Coloradans continue to face higher premiums and reduced coverage options under the Colorado Option. 

  • While the statute creating the Colorado Option promised five percent premium reductions by 2023, 10 percent premium reductions by 2024, and 15 percent premium reductions by 2025, in 2023 and 2024 the program has objectively failed to achieve the promised premium decrease or the resulting affordability.
  • Colorado Option rates increased this plan year by seven percent over 2023 rates, and this is on top of a double-digit increase in Colorado Option premiums over 2022 premium levels. 
  • And since the Colorado Option was implemented, four health insurance providers have withdrawn from Colorado’s individual market, small group market, or both – leaving consumers with reduced competition and fewer health plans from which to choose.

Learn more about Minnesota’s Health Care Future here.

Minnesota’s Health Care Future is a coalition of Minnesota’s leading doctors, nurses, clinicians, community hospitals, health insurance providers and biopharmaceutical companies. We believe every Minnesota resident deserves access to affordable, high-quality health coverage and care, and we advocate for proven solutions that build on what’s working and fix what’s broken in health care.