Burcum: Don’t rush the decision on undocumented immigrant health coverage

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There’s a darn good reason that one of the thorniest issues to resolve at the legislative’s session’s end involves allowing undocumented immigrants to enroll in the state’s pioneering and publicly funded MinnesotaCare program.

Republicans want to overturn this newfound eligibility, which was passed by DFL majorities in 2023 but officially took effect in January. The DFL, not surprisingly, wants to maintain it.

What makes this topic especially tough to tackle: There are reasonable arguments fueling each side’s diametrically opposed positions.

In turn, that makes it difficult to hammer out a compromise. The U.S. House added to the complexity on Sunday evening, when it released a plan that would reduce federal health care funding to states providing coverage for undocumented immigrants.

MinnesotaCare dates to 1992, when it was created under Republican Gov. Arne Carlson. It serves those who make too much to qualify for medical assistance but not enough to comfortably afford private insurance.

The DFL’s support for undocumented immigrants’ MinnesotaCare eligibility is grounded in a commendable commitment: closing cracks in health care coverage for all. In addition to this moral imperative, there’s a business argument.

State hospitals and clinics are facing immense financial pressures due to workforce shortages, rising costs, tariffs on supplies and funding uncertainty at the federal level for Medicaid, the nation’s low-income medical assistance program that covers more than 78 million people.

Suddenly stripping away immigrants’ coverage in Minnesota could exacerbate the stress on health systems’ bottom line. When people get sick and don’t have access to regular care, they wind up in emergency rooms.

Most hospitals are legally obligated to provide emergency services for them, thanks to a 1986 law passed by Congress. If patients can’t pay, then hospitals grapple with uncompensated care. In turn, those costs can be passed along to the insured, resulting in higher premiums.

Coming at this issue from a different but also compelling direction are Republican legislators, who have introduced legislation to prohibit immigrants’ MinnesotaCare eligibility.

State Sen. Jordan Rasmusson, R-Fergus Falls, is helping lead the charge. He and his GOP colleagues cite higher-than-expected enrollment in the program’s early months and potential costs to the state.

Both are legitimate concerns, especially with Sunday’s U.S. House move, which could result in the state additionally losing millions in federal Medicaid funding. (As of Tuesday, state officials have yet to quantify what that loss could be if the congressional GOP plan is enacted.)

Immigrants have only been eligible to enroll in MinnesotaCare (provided they meet program requirements) since January. Like other enrollees, they may pay modest premiums based on income and family size.

As of April 24, there were 20,187 people enrolled, according to the Minnesota Department of Human Services (DHS). But according to a legislative analysis cited by Minnesota Republicans, only 7,800 people were expected in the program.

The higher enrollment raises understandable concerns about the program’s price tag. That is especially on point given that the state shoulders the cost of this coverage alone vs. sharing it with the federal government, as is the case for most other medical assistance enrollees. In an interview, Rasmusson cited other states with similar programs that are struggling to finance this coverage, with California’s coverage-related budget woes a prime example.

While the GOP has claimed that “associated costs” of the coverage “may exceed $450 million over the next four years,” DHS’ estimate is much lower, though still a considerable sum:

“Based on the first three months of enrollment (Jan-March 2025), actual spending is in line with the February forecast, which also projected expenditures of approximately $200 million in FY 2025-28. To this point, there is no evidence to suggest expenditures will be significantly higher going forward.”

One data point that’s foundational for the DHS price tag: utilization, meaning the medical care costs incurred by the new enrollees. So far, just 4,306 enrollees have had a claim, with the total costs for paid claims amounting to $3.9 million. Given the program’s recent launch, it’s premature to draw any conclusions about utilization trends. But immigrant enrollees may skew younger than traditional participants, potentially keeping costs lower.

Asked about the hospitals’ financial concerns, Rasmusson acknowledged the financial pressures but also said MinnesotaCare coverage for immigrants is an “inefficient” way to assist hospitals. That’s a fair point, but I’d counter that hospitals’ financial pressures are grim enough that we need multiple approaches.

A key point I’d add to the debate is that MinnesotaCare benefits are currently quite generous, though the program historically had an unrealistic $10,000 coverage cap on hospitalizations. Metal tiers are used to describe the percentage of care covered by a plan vs. what consumers pay out of pocket. A bronze plan would cover 60% of care costs, silver 70%, gold 80%, etc.

Current MinnesotaCare benefits are considered slightly above a platinum plan, meaning it covers 94% of care costs, which “exceeds anything on the commercial market,” the Minnesota Council of Health Plans said in a statement.

It’s fair to ask if taxpayers should provide more generous coverage for MinnesotaCare’s immigrant enrollees than many of us get through our private plans.

There may be fodder for a compromise in that question. Reducing immigrant enrollees’ benefits to gold or silver levels could potentially reduce costs without leaving them uninsured.

There’s likely not enough time to overhaul the program on that order. But it could be done over the next year if legislators’ step back and give themselves time to work it out, consider other solutions and get clarity on how congressional maneuvers could impact state health funding.

This is indeed a thorny issue, with the wrong moves leaving people uninsured and hammering hospital finances at a critical time. My prescription: Convene a task force to study the issue and report back next year with more details and data. Let’s proceed with care and get it right.