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It was interesting to read the May 6 commentary by state Rep. Liz Reyer and state Sen. John Marty ("It's time to remove for-profit HMOs from Minnesota") about their effort to overturn the 2017 legislation that allowed for-profit HMOs to operate in the state. Before that 2017 legislation, HMOs had needed to operate as nonprofit entities in order to be certified in Minnesota all the way back to when the 1972 legislation enabling them was adopted. Minnesota was one of the last states to hold onto that nonprofit requirement — perhaps even the last one.
While Minnesota HMOs cover only about 10-12% of state citizens with health care coverage, they are required to provide a comprehensive list of services that have to be covered for all of their enrollees. Granted, HMOs often are contracted by large employers to administer their self-insured health plans in which the health care services to be covered are determined by the employer and not by the state or the federal government. Those plans are not subject to state regulatory oversight and cover over 40% of the citizens of Minnesota who have health care coverage.
So, while the nonprofit HMOs' wagon has already left the barn and, realistically, will never return to the stable, it is nevertheless rather ironic to hear the well-respected Marty arguing for its return given the strong opposition to HMOs from so many of the supporters of his Minnesota Health Plan. So many of them have complained for years about HMOs being the sole reason for the high costs of health care coverage, often claiming that the HMOs continually are ripping off their enrollees with high administrative costs, lavish executive compensation levels and outlandish reserves. (Note: Those reserves are required by law to be sufficient to provide coverage for their enrollees for six months following their ceasing of operations. As such, the HMOs are required by law to have them, but their existence has so often been used by HMO opponents as "proof" of their negative claims regarding HMOs in Minnesota.)
Contrary to continuing claims that HMOs are the primary cost drivers in Minnesota, a quick look at the data clearly indicates that health care providers as well as Big Pharma are far and away the main cost drivers in the cost of health care as well as the cost of health care coverage.
As such, it is refreshing to hear Marty arguing for the return of the nonprofit-HMOs-only policy in place from 1972 to 2017.
Norm Hanson, of Roseville, retired from the Minnesota Department of Health in 2013. His service included work as an investigator in the HMO regulation section.
