Minnesota will open market to for-profit insurers in July; lawmakers fear $10B in losses

While Minnesota has allowed only nonprofit health insurers to sell health plans in the state since 1973, a new law will upend that rule and possibly the market, according to Citypages.

In 2017, lawmakers lifted a ban that barred for-profit insurers from selling policies in Minnesota. The ban blocked even Minneapolis-based UnitedHealth Group from selling plans in its own state.

However, under a new law set to take effect in July, some of the nonprofit health plans doing business in Minnesota could convert to for-profit or be absorbed by for-profits.

Lawmakers and Minnesota Attorney General Keith Ellison want to reverse the law, arguing that Minnesota's nonprofit health plans hold about $10 billion in assets and reserves thanks to their nonprofit status. That money was supposed to be spent on public interests, but under the new system, those funds could be dispersed however the plans wished.

"There's nothing in the statute preventing them from doing it," state Rep. Tina Schultz, D-Duluth, told Citypages. The publication cites the example of health insurer Medica, which already notified the Minnesota Department of Human Services it intends to transfer $100 million-plus to out-of-state subsidiaries.

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