Evaluating the Potential Impact of a Public Option on Minnesota’s Hospitals and Patients

As the world emerges from the COVID-19 pandemic, policymakers are eager to find solutions to ongoing issues related to health care access and affordability, particularly in an increasingly complex health care landscape marked by ongoing challenges such as nationwide inflation and health care workforce shortages.

Minnesota, a longtime pioneer in health care access innovation, is once again considering implementing a public option in hopes of improving health care access and affordability across the state. The Minnesota Legislature is currently reviewing companion bills in the House and Senate that propose establishing a buy-in to MinnesotaCare, the state’s basic health program covering low-income Minnesotans without access to affordable health coverage. Minnesota legislators refer to this MinnesotaCare buy-in proposal as a public option, as it would establish a government insurance plan that competes against private plans on the exchange.

To understand the implications of the proposed MinnesotaCare buy-in (“Public Option”), economists at FTI Consulting modeled its effects on access to care and hospital finances across the state. We found that, under the Public Option, many hospitals across Minnesota would experience significant financial losses and increased risk of closure due to low reimbursement rates and unprecedented shifts in their payer mix, creating undue hardships for hospitals and implications for access to care, particularly in rural areas. In addition, we found that the Public Option would yield minimal improvements to the state’s uninsured rate, which is already among the lowest in the United States. As Minnesota’s policymakers assess the possibility of a Public Option, it is crucial that they weigh the implications it could have on providers and access to care, particularly in underserved, rural areas.

Download the report for the key findings and related impacts on healthcare insurance coverage, hospitals and access to care due to the Minnesota Public Option, as well as what may be in store once the Public Option is put into practice.

Click here to download the full report