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Dayton touts $650 million in health insurance savings

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State officials say Minnesota is saving $650 million by changing the way it contracts for people covered by public health insurance. The state contracts with health care plans to provide coverage to low-income residents in the MinnesotaCare and Medical Assistance programs.

And for the first time, officials put those contracts out for competitive bids across the entire state, according to a news release from Gov. Mark Dayton and Human Services Commissioner Lucinda Jesson. The savings from the bidding process amounts to $450 million, Jesson said.

The state is also seeing another $200 million savings from health plans because new enrollees in those programs cost less to insure over the past year, likely because they were healthier than expected, the Associated Press reports.

More than half of the savings will be returned to the federal government, which also funds the state's health care programs. Minnesota's $250 million share will be added to the state's expected budget surplus, according to the Associated Press.

The state first began using the competitive bidding process in 2011, for health care contracts in Twin Cities metro area counties. The number of counties was expanded gradually over the past few years, and this year is the first time competitive bidding has gone statewide, according to the Star Tribune.

“The competitive bidding process is about getting the best value for taxpayers and our enrollees, and that is exactly what this procurement accomplished,” said Jesson. “In addition to hundreds of millions in taxpayer savings, our enrollees will have more choice as well as high performing plans from which to choose.”

New plans available Jan. 1

MinnesotaCare and Medical Assistance provide health insurance for more than 800,000 Minnesotans, according to Dayton's office.

The new contracts will go into effect on the first of the year. MinnesotaCare and Medical Assistance enrollees in nearly every county in Minnesota will have at least two health care plans to choose from, and metro area counties will have three plans.

This map shows which plans will be available in each county in the state.

The Star Tribune notes that UCare, which currently covers about 360,000 people, is being dropped. Current UCare clients will get help from the state to find a new plan, starting in September.

Since 2011, the state has saved $1.6 billion by reforming how public health coverage is purchased and delivered, according to the governor's news release.

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