For-profit HMOs face uphill climb in Minnesota
The historic move chipped away at the state's long-held reputation as one of the nation's premier homes for nonprofit health care.
But some doubt the move will have much practical effect, at least any time soon. For-profit insurers across the country have been retreating from the individual market in many states, and new carriers in
"I hope that allowing for-profit HMOs will create more competition, but the high concentration of provider markets in the state will make it difficult for any insurer to enter," said
There's a long-running debate over whether for-profits or nonprofits deliver better care at lower costs when it comes to hospitals and health insurance. Some nonprofit health plans tend to get very high marks, but health policy experts say it's difficult to make general statements that apply to all insurers.
Last month, the debate rekindled at the State Capitol, with DFLers saying for-profit HMOs would wrongly shift health care dollars to shareholders.
"We know that a profit motive in health care ... is antithetical to the needs of people who are very sick," said Rep.
Status quo isn't working
"Forty-nine other states have for-profit HMOs," said Majority Leader
The change on for-profit HMOs was part of a bill focused on premium rebates for some in the individual market, where about 190,000 people who are self-employed or don't get coverage from their employer buy coverage.
The federal Affordable Care Act (ACA) brought fundamental changes to the individual market starting in 2014, and the market has been volatile ever since. Insurers have boosted premiums and/or pulled back from the market in the face of financial losses.
The legislation passed last month responded to premium spikes with more than
"We have big problems in the individual health insurance market," said Rep.
Last to ban for-profits
In 1973,
"We felt that it was important for them to be more transparent and accountable to public officials," said
Over time, however, most in
For-profits were never banned from being licensed as health insurers. So large players like Cigna, Humana and
While other states pulled the plug on for-profit HMO bans years ago,
'Chicken and egg' dilemma
Feldman of the U said he was skeptical the HMO change would expand insurance options, because doctors and hospitals practice in large groups that make it difficult for newcomers to negotiate competitive payment rates. The disadvantage in paying doctors and hospitals, in turn, makes it hard for new insurers to sell coverage at competitive prices.
New insurers face a "chicken and egg" dilemma, said
Baumgarten said the chance of a carrier coming into the state specifically to do individual market business is "slim." But he said the new law could shake up the market in other ways.
Nonprofit to for-profit?
HMOs in
Changes in the
"The national companies could instead acquire an existing nonprofit HMO and convert it to for-profit," Baumgarten said via e-mail. "Or one of the existing HMOs could convert to for-profit status."
The prospect is troubling to Sen.
Reached for comment, four of the state's nonprofit health plans said they have no interest in becoming for-profits.
Neither the
"With for-profit insurance companies, and even our current nonprofit insurance companies, they reduce costs and cut corners by cutting benefit sets and narrowing networks so patients can't even choose their doctors,"
Twitter: @chrissnowbeck
___
(c)2017 the Star Tribune (Minneapolis)
Visit the Star Tribune (Minneapolis) at www.startribune.com
Distributed by Tribune Content Agency, LLC.
Protestors say Congressman Vern Buchanan is ‘M.I.A.’
Republicans Work on Plan to Replace Obamacare
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News