HF3735

Purpose

This bill repeals two existing Minnesota statutes that govern (1) automatic transfers of health care program savings to a special fund and (2) a limit on year-to-year rate increases for certain health care plans. By removing these provisions, the bill eliminates the specific triggers and constraints related to health care funding transfers and rate setting.

What is repealed

• Health Care Transfer Savings and Repayment (Minnesota Statutes 2024 section 62U.10, subd. 4)

  • Previously required that when state-administered health care program savings reached $50,000,000, the Commissioner of Health would certify the amount to the Commissioner of Management and Budget. In the next fiscal year, $50,000,000 would be transferred from the General Fund to the Health Care Access Fund, with the transfer amount appropriated from the General Fund.

• Prepaid Health Plans Trend Limit (Minnesota Statutes 2024 section 256B.69, subd. 31a)

  • Previously allowed, to the extent practicable, a limit on year-over-year rate increases paid to managed care plans and county-based purchasing plans (a 0.8% reduction in Medical Assistance rates across all products). It also included forecasting provisions to determine how much rates should be reduced and, if the total reduction fell short of a specified amount ($145,150,000), a transfer of the difference from the Premium Security Account to the General Fund. The provision also referenced actuarial soundness and CFR requirements for rate development.

Main provisions and what the bill seeks to accomplish

• Eliminates automatic funding transfers

  • No longer requires a $50,000,000 transfer from the General Fund to the Health Care Access Fund when savings thresholds are met.

• Removes rate-increase constraint for certain health care programs

  • No longer enforces a 0.8% year-over-year cap on rate increases for managed care plans and county-based purchasing plans within Medical Assistance.

• Removes forecast-based adjustments and related transfers

  • Eliminates the forecasting framework that linked rate reductions to forecasted savings and the potential transfer of any shortfall to the General Fund from the Premium Security Account.

• Removes-referenced compliance requirements in these sections

  • The specific statutory requirements about actuarial soundness and the CFR standards tied to the repealed sections would no longer be mandated by these provisions.

Effects on existing law

• The repeals remove the statutory triggers for automatic transfers of health care savings and the established cap-and-forecast mechanism governing rate changes for prepaid health plans.
• Without these specific provisions, any related funding decisions or rate-setting constraints would be governed by other laws and budget processes, rather than these repealed rules.

Implications and who is affected

• Health care funding and budgeting processes for state health care programs (including components like the Health Care Access Fund and Medical Assistance rate setting) could operate under different rules or under other statutory authorities.
• Managed care plans and county-based purchasing plans that participate in Medical Assistance may experience greater flexibility in rate setting, since the explicit 0.8% trend limit and forecast-based transfer provisions are repealed.

Summary of affected statutes (for context)

• Repealed: Minnesota Statutes 2024 sections 62U.10 subdivision 4 and 256B.69 subdivision 31a

Relevant Terms - Health Care Transfer Savings and Repayment - Health Care Access Fund - General Fund - Managed Care Plans - County-Based Purchasing Plans - Medical Assistance - Trend limit calculation - 0.8 percent reduction - Actuarial soundness - CFR (Code of Federal Regulations) 42 Part 438 Subpart A - Forecast expenditures - Premium Security Account - Section 62E.25 subdivision 1 - 145,150,000 (amount referenced in the forecast/transfer provision)

Relevant Terms - repealed - automatic transfer - health care funding - rate cap - rate setting - forecast framework - premium security account - general fund transfer - health care costs - budgeting discretion