Tuesday, April 3, 2012

Healthcare reform saves millions for taxpayers

Federal and state taxpayers received a savings of $73 million in April thanks to the voluntary 1% cap on profits agreed to last year between Commissioner of Human Services Lucinda Jesson, HealthPartners, Medica, UCare, and BlueCross BlueShield.

This return of taxpayer dollars is the latest in a series of reforms to Minnesota’s health care system, focused on providing better taxpayer value at a better price.

Payments were calculated based on 2011 financial reports submitted to the Minnesota Department of Health by health insurance companies. In accordance with Governor Dayton’s Executive Order 11-06 issued on March 23, 2011, these reports will be independently audited and verified by vendors contracted by the Minnesota Department of Commerce. Repayments from the health plans will be credited towards this biennium’s budget.

The estimated repayments for each plan are:

HealthPartners: $31 Million
Medica: $25 Million
BlueCross BlueShield: $9 Million
UCare: $8 Million

The Dayton administration negotiated 1% voluntary caps with the health plans for profits earned in 2011. This cap applies to the profit earned by the managed care companies under contracts negotiated prior to the Dayton Administration. For 2012 and beyond, the Dayton Administration implemented competitive bidding for public managed care contracts in the metro area. These competitively bid contracts, in concert with other managed care reforms, will generate over $500 million in savings to taxpayers over the next biennium.