Should state pay for newly required insurance benefits? – Star Tribune

Bipartisan bill targets popular coverage expansions that drive up health insurance costs.

Minnesota legislators should consider a process to routinely review existing mandated insurance benefits and consider candidates for pruning, Jill Burcum writes. (David Goldman/The Associated Press)

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By now, everyone’s familiar with the script for pharmaceutical ads. There’s the first part, typically featuring people frolicking in a flowery field. Then comes the quiet but rapid-fire list of potential side effects from taking the featured medication.

As someone who’s covered health care reform since former President Bill Clinton attempted it, I’ve often thought that political debates over this could benefit from having those drug-ad announcers come into the halls of Congress or the State Capitol and soberly intone the potential consequences of any changes under consideration.

Just as the ads’ lengthy list of side effects illustrates, fixes in medicine and health policy can sometimes create other problems. The good must be balanced against potential harm, requiring careful calibration. This is why legislation taking a new and unusual approach to sharpen state lawmakers’ cost-benefit calculations on an important annual matter of business — whether to expand the list of services and procedures covered by health insurance — merits the spotlight.

While I’m not yet ready to support the bill, because it calls for tapping taxpayer dollars to defray newly required benefits’ cost, the discussions it’s spurring are nevertheless an illuminating addition to the Minnesota Legislature’s 2025 health deliberations. The legislation’s lead authors, Sen. Nick Frentz, DFL-North Mankato, and Rep. Bernie Perryman, R-St. Augusta, are doing important work raising awareness about the cost “side effects” of hitting the easy button: saying yes to the yearly parade of advocates and industry representatives petitioning to add new kinds of care, services or products to required insurance coverage.

I ran across this legislation, SF 565/HF 400, while tracking a different bill that would strengthen mental health care during pregnancy and in the delicate months after childbirth. The commendable maternal health bill, SF 1085/HF 35, authored by Sen. Alice Mann, DFL-Edina, got a well-deserved airing before the Minnesota Senate’s Commerce and Consumer Protection Committee earlier this month.

But the Commerce Committee hearing that day turned out to be what Sen. Matt Klein, DFL-Mendota Heights, a physician who chairs the group, calls “Mandate Day.” The occasion is when advocates make their case to further expand the list of medical services or procedures that state-regulated health plans must cover. These are known as “mandated insurance benefits,” which explains the moniker Klein gave it.

The long list helps ensure that coverage meets enrollees’ needs. That’s positive overall. Requiring new benefits helps prevent consumers who need them from paying out of pocket. Among the 2025 session petitioners: patient advocate and industry representatives making a sound and emotionally appealing argument to cover technology that helps wheelchair users stand up.

The problem, as the Chamber and SF 565’s advocates note, is that requiring more can drive up the monthly insurance premiums that employees and employers shoulder, a problem when there’s generally about 20 new mandated services sought annually. It’s not necessarily the cost of adding one more benefit, but the cumulative effect of adding it to an already expansive list. That’s a concern as health insurance costs continue to escalate.

Many of the Chamber’s members are already struggling to provide insurance for employees, with the business lobbying group noting that highlights from its 2024 business survey drive home this point.

If costs continue to rise, 34% of respondents said, they’ll continue to offer coverage but added that they’ll be “forced to pass on cost increases to employees.” Almost a third (27%) said they’ll be “forced to reduce” the level of coverage provided to employees, while another 11% said they’ll “stop providing health insurance coverage as a benefit.”

Complaints from constituents about rising costs spurred Frentz to introduce the legislation. In an interview, Frentz said that raising awareness of mandates’ costs is a key goal, and added that his bill would provide more clarity on that than the current process.

But legislation could also take another, more controversial step: If a new mandate would result in a “net increase in per-member, per-month costs” for those getting coverage through certain private health plans, the bill would require the Minnesota Department of Commerce commissioner (think state dollars) to defray the new mandated benefit’s cost beginning in 2026.

How much could this cost? It’s unclear. Since the legislation “would only apply in theory to mandates that get proposed in the future and since we don’t know what those are or if there are any, it has no fiscal note,” said Klein, the committee chair.

Nor does there appear to be a similar program elsewhere that could provide a ballpark estimate. Neither Klein, Frentz nor the Chamber of Commerce were aware of other states that defray the cost of new mandated benefits.

Klein said he supports the bill because of the additional cost information it would provide legislators as they weigh new mandates. The legislation cleared the Commerce Committee after the hearing earlier this month, and has more committee stops ahead.

Legislators should use this time to get clearer answers on the legislation’s cost and address other concerns, such as whether there are other ways to provide mandate-cost clarity without signing up to pay for them. That’s a valid question. But so is the one that Frentz raised in the hearing earlier this month: If legislators don’t want to pay for a new mandate, then why should they expect struggling policyholders to bear the cost through increased premiums?

Legislators should also consider a process to more routinely review existing mandated benefits and consider candidates for pruning.