PREETHI RAO, FEDERICO GIROSI, CHRISTINE EIBNERAssessing the Impact of Individual Market Reforms in MinnesotaResearch ReportPREPUBLICATION COPY. [DATE: JANUARY 24, 2024] This document has not been edited, proofread, or finalized.PREPUBLICATION COPY. [DATE: JANUARY 24, 2024] This document has not been edited, proofread, or finalized. iii About This Report The Minnesota Council of Health Plans was interested in understanding the potential impact of efforts the state might take to improve health insurance enrollment in the state. In this report, we used RAND’s COMPARE microsimulation model to estimate the impact of state-funded individual market subsidy enhancements, as well as the replacement of MinnesotaCare, the state’s Basic Health Program (BHP) in favor of a similarly-structured individual market plan. For each policy scenario, we estimated enrollment, premiums, and federal and state spending. This research was funded by the Minnesota Council of Health Plans and was carried out within the Payment, Cost, and Coverage Program in RAND Health Care. RAND Health Care, a division of the RAND Corporation, promotes healthier societies by improving health care systems in the United States and other countries. We do this by providing health care decisionmakers, practitioners, and consumers with actionable, rigorous, objective evidence to support their most complex decisions. For more information, see www.rand.org/health-care, or contact RAND Health Care Communications 1776 Main Street P.O. Box 2138 Santa Monica, CA 90407-2138 (310) 393-0411, ext. 7775 RAND_Health-Care@rand.org Acknowledgments We gratefully acknowledge the support and assistance of several people in writing this report. We thank Lucas Nesse, Dan Endreson, Chelsey Olson, and Hannah Fairman for their helpful input and feedback, as well as the Minnesota Council of Health Plans for funding this work. We are grateful to Carter Price and Petra Rasmussen of the RAND Corporation and Jean Abraham of the University of Minnesota for their thoughtful reviews of this work. PREPUBLICATION COPY. [DATE: JANUARY 24, 2024] This document has not been edited, proofread, or finalized.PREPUBLICATION COPY. [DATE: JANUARY 24, 2024] This document has not been edited, proofread, or finalized. iv Summary Starting in 2025, Minnesota could experience disruptions in its health insurance marketplace due to the sunset of enhanced federal tax credits available through the Inflation Reduction Act (IRA) of 2022 and the expiration of state funding for its reinsurance program. With reduced tax credits, fewer people might enroll in marketplace plans, potentially leading to higher premiums and market instability. The expiration of reinsurance, which partially offsets insurers’ claims costs for people with high expenditures, could exacerbate these issues. In this report, we estimate the effects of implementing state-funded subsidies to str...
