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Insurers and hospitals oppose pharmacy carve‑out and HMO surcharge; back audio‑only telehealth extension
Summary
The Minnesota Council of Health Plans and the Minnesota Hospital Association warned the House committee that carving pharmacy and non‑emergency medical transport benefits out of managed care and doubling the HMO surcharge would raise costs for enrollees and complicate care coordination; hospitals supported extending audio‑only telehealth.
Health insurers and hospitals told the House Health and Human Services Finance Policy Committee they oppose two governor’s budget proposals — a pharmacy carve‑out from managed care and an increase in the HMO surcharge — and urged legislators to avoid changes that would undermine care coordination or raise premiums.
"Adding additional taxes to insurance increases the cost paid by enrollees and small businesses," Chelsea Olsen of the Minnesota Council of Health Plans told the committee, describing a proposal to double the HMO surcharge from 0.6% to 1.25%. Olsen said the fully insured commercial market already pays multiple health-related premiums and assessments, and that nonprofit plans operate on narrow margins; she argued that increasing the surcharge shifts costs to consumers and small employers.
The council also opposed proposals to carve out pharmacy and non‑emergency medical transportation (NEMT) benefits from the managed care model. "By carving out the pharmacy and NEMT benefits, enrollees would have to contact three different entities depending on the services they have questions about," Olsen said, arguing that care coordination under managed care improves outcomes. She asked the committee to evaluate whether carve-outs would improve the experience of more than 1,000,000 Minnesotans enrolled in managed care.
Hospitals raised related concerns and said they oppose a pharmacy carve-out that could negatively interact with the federal 340B drug pricing program that safety-net providers rely upon. "This is just a cut to safety net providers and safety net hospitals across the state," Danny Eckert of the Minnesota Hospital Association said, while also urging continued protections for independent pharmacies and improved PBM practices.
Both health plans and the hospital association supported the governor’s proposed extension of audio‑only telehealth, saying it improves access for patients without broadband or video services and is particularly useful for mental health care in rural areas.
No committee action was taken during the hearing; witnesses asked legislators to weigh enrollee experience and safety‑net provider impacts in any changes to managed care structure or fees.
