Risk Level Pricing

Risk Level Pricing and Supplemental Health Care Subsidies in Minnesota

What is Basic Health Care? Under the Basic Health Plan model, the State contracts with at least one or more private health insurance carriers to provide medical coverage to qualified individuals. Premiums are typically set at affordable rates, and the policy is robust, offering at least bronze-and-silver-level coverage for individuals with lower than ideal income… but great health! The program is designed to help offset the impact of premium increases on low-income families.


This year, three new Minnesota policies

have been added to the Basic Health Plans list. The Minnesota Health Options plan allows policyholders to get health insurance comparable to those offered in the District of Columbia and Minnesota. The District of Columbia and Minnesota also have long-term, catastrophic health plans that may be renewed annually. Although all three plans now offer basic coverage for dental, mental health, prescription drugs, and home health services, they do not have “dental discount plans” as many other states do, like the Washington Health Insurance Pool.


In addition to helping families and individuals get insurance

Basic Health Plans also reduce financial risks to the state. Each family’s financial risk is examined to identify possible new premium hikes. For example, some states have found that raising rates by a certain percent will result in an increased amount of out-of-pocket expenses for policyholders. Other states are concerned that high claims will result in “unnecessary” hospitalizations or a delay in receiving necessary treatment. By making these financial risks more visible to policyholders, health plans can help to mitigate these concerns.


In addition to the financial risks identified above

some policies have direct benefits for low-income families. Some Medicaid programs subsidize medical costs for uninsured or underinsured individuals. Even after an individual is insured through one of these programs, he or she may still face some budgetary challenges. Many states, including Minnesota, have long-term Medicaid plans that will supplement Medigap premiums for low-income families and provide health insurance protection even when an individual’s income is too low to qualify for federal Medicaid.


While Minnesota, like many other states

has considered various revenue-neutral solutions to reduce our long-term debt burden, our state has chosen to expand Medicaid. By expanding Medicaid, Minnesota will not only relieve pressure from our already overflowing health care system but will also create another stream of income for low-income families. By providing health coverage for more people, we will also reduce the burden on our already strained resources. By providing health care benefits to more people and more families, the federal government will be able to alleviate the current downward trend in health care costs while simultaneously reducing its revenue supply.


One of the reasons that Minnesota has chosen to expand Medicaid

is because it increases access to quality health care. By investing additional financial resources into our communities through Medicaid and the State Children’s Health Insurance Program (SCHIP), we can ensure that all Minnesotans have the opportunity to obtain the health care they need regardless of their current or potential income. Through careful planning and implementation, our state can ensure that our residents have access to the health care that they need and deserve. Through risk level pricing and appropriate use of subsidies, Minnesota can ensure that those who need help will have the chance to receive it.

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