Rhetoric Vs. Reality: Proposal To Create State Government-Designed Public Option Health Insurance System

ST. PAUL, Minn. – As some politicians push to create a new state government-designed “public option” health insurance system, supporters of the unaffordable proposal are sowing confusion about the consequences. 

  • RHETORIC: “By directing state agencies to submit a federal waiver application for the MinnesotaCare Public Option, the state can complete analysis work and the application process can inform future legislation, implementation, and funding for the program. This work is foundational to the establishment of the MinnesotaCare Public Option and can begin before state funding commitments are made to the program.” (Public Option Supporters’ Letter to Lawmakers, April 30, 2024)
  • REALITY: Supporting legislation directing the state to apply for a federal 1332 State Innovation Waiver is the same as a vote for implementing the public option. It is not a halfway step, nor is it needed to complete the state’s analysis of the policy. In reality, meeting the requirements of the federal government’s extensive checklist for a 1332 waiver is a significant undertaking, including “a comprehensive description of the state’s enacted legislation and program to implement a plan meeting the requirements of the 1332 waiver…”

As the Minnesota Department of Commerce explained to lawmakers, their report on the public option “provides only a portion of the information needed to apply for a Federal 1332 waiver to operate the program … [C]ritical decisions remain before the State could engage in more detailed discussions with federal regulators and submit a complete (and approvable) 1332 Waiver application.

A newly released 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 and 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 voters57% 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.

To learn more about the unaffordable costs and negative consequences of the public option, click here.

To learn what Minnesota health care, labor and business leaders are saying about the public option, click here.