NEWS RELEASE: Advocates call on state lawmakers to reinstate ban on for-profit HMOs before more changes take effect

CONTACT: Kenza Hadj-Moussa, 612-386-9556

April 3, 2019



Advocates call on state lawmakers to reinstate ban on for-profit HMOs before more changes take effect

Minnesotans and House lawmakers are working to stop the ‘health care heist’ 

St. Paul, MN—Advocates and House lawmakers are working to reinstate laws that ensure that money for health care goes toward care.


Minnesota was the last state in the nation that still banned for-profit companies from selling health insurance. The GOP Legislature repealed the state ban in 2017. It takes effect July 1, 2019.


“Minnesotans didn’t ask for this,” said Paul Sobocinski, health care organizer with Land Stewardship Project. “It unraveled Minnesota’s longstanding position that said: Money for health care should go to care—and health insurance should not be for profit business. Our elected officials are responsible for fixing this.”


Health care money for care, not profits

Changes to the state’s health care laws have already had an effect. By repealing the law in 2017, the state no longer required nonprofit health plans to use their earnings for care.


While Minnesotans struggled to afford health coverage, the repeal allowed Medica, a nonprofit health plan, to make multiple transfers to an out of state business.


Rep. Jen Schultz is among the state leaders working on this issue. One of her bills this session would reinstate language to ensure that nonprofit health plans use their revenue for care.

Rep. Jen Schultz (Duluth) is chief author of bills working to stop the ‘health care heist.’


“All net earnings of a nonprofit health maintenance organization must be devoted to the nonprofit purposes of the health maintenance organization in providing comprehensive health care. That’s really the core of this bill,” said Sarah Greenfield of TakeAction Minnesota to members of the HHS Finance committee last week, in support of Rep. Schultz’s bill (HF572).


“After this language was removed in January of 2017, within months Medica transferred money to Medica of Wisconsin—and the Minnesota Department of Health no longer had the legal basis to reject the transfer.”


“It’s straightforward,” said Sobocinski “We should expect that nonprofit health plans use our health care money for care, not profits.”


For-profit HMOs: A leap in the wrong direction


Advocates and House lawmakers are also working to reinstate the entire ban on for-profit health insurance companies, before the for-profit permissions take effect July 1. Rep. Tina Liebling is the chief author of the bill that would require HMOs to be nonprofits. UnitedHealth Group already got the green light from the Minnesota Department of Health for its HMO license.


Testifiers have noted in House committees this year that UnitedHealth Group and its subsidiaries have been cited numerous times for fraud, twice in the last month.


“With HMOs, the middlemen have middlemen. We should be cutting out health plans and roles like pharmaceutical benefits managers, not putting corporations between our patients and the care they need,” said Mary C. Turner, President of the Minnesota Nurses Association and ICU nurse at North Memorial Hospital in Robbinsdale.

“While we’re dissatisfied with the use of HMOs as a vehicle to provide health care—allowing for-profit health plans in the state is a huge leap in the wrong direction. Our patients need Medicare for All.”

“We have the choice to either give more control to corporate players, or we can cut out the middlemen and move toward publicly funded health care,” said Sobocinski.


That’s Our Money

There are major implications for taxpayers. For the first time in history, for-profit health plans would be allowed to manage publicly funded health insurance programs.


It’s a lucrative prospect. Over a million Minnesotans, about 20%, are covered by public health insurance, compared to a sliver of people on the individual market. Minnesota’s nonprofit health plans doubled their operating income last year, and made $109 million in financial gains off public health insurance programs, according to the Star Tribune.


“Health plans are making significant money off public health insurance programs. That’s our money,” said Kenza Hadj-Moussa, spokesperson for TakeAction Minnesota.


“It should go for people’s health care, or back to the public—not into the hands of for-profit companies that only exist to enrich themselves. UnitedHealth Group is legally accountable to its shareholders, not patients.”


House Legislators Take Action

While Minnesotans continue to speak out against health care and skyrocketing prescription drug prices at the Legislature, advocates and House lawmakers are working to pass critical and time-sensitive public protections.


“There are multiple ways to stop a ‘health care heist,’ depending on what happens with different portions of the law,” said Hadj-Moussa. “It will require action this session from the Legislature and even the Attorney General. The bottom line is that we’re not letting this issue fade away. Corporate lobbyists don’t get to decide our laws, the people do.”


The House Health & Human Services omnibus bill reinstates the requirement that nonprofit health plans use net earnings for health care, and bans for-profit companies from selling health insurance.


The Senate has several companion bills that have not been granted a hearing.




TakeAction Minnesota is a statewide,  independent,  multiracial people’s organization working to advance democracy and equity through organizing, political action, and campaigns. The organization has offices in St. Paul, Duluth, and St. Cloud. 






http://www.startribune.com/judge-calls-unitedhealth-coverage-guidelines-tainted/506790982/, Chris Snowbeck, March 6, 2019



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