Minnesota to allow all undocumented residents to enroll in MinnesotaCare

Undocumented residents in Minnesota will be eligible to enroll in the state’s publicly subsidized insurance program for low-income people, known as MinnesotaCare, under a budget agreement released on Friday night.

The proposal, which is expected to become law, will expand public health insurance access to the more than 40,000 undocumented people estimated to live in Minnesota and meet the program’s income requirements.

Immigrant rights advocates heralded the funding for an expanded MinnesotaCare after the health budget was released on Friday.

“Workers without status have made enormous sacrifices to our state, paying the highest toll to keep our state running during COVID-19. All people deserve access to health insurance,” said Emilia Gonzalez, executive director of Unidos Minnesota, in a statement.

The state aims to begin enrolling undocumented residents in 2025, said Rep. Tina Liebling, DFL-Rochester, a chief author of the health budget bill.

“This is huge to be able to offer them health insurance, and it will be huge for hospitals,” Liebling said. “Because when people show up at a hospital and they don’t have coverage, the hospital has to pay for it.”

If passed, Minnesota could be the second state to allow all low-income people to enroll in public insurance, regardless of immigration status. California will allow all undocumented adults to enroll in public insurance beginning in 2024. The District of Columbia also allows all low-income, undocumented people to enroll in public insurance.

A dozen other, mostly blue states have expanded access to undocumented children and certain adults, but have not opened access to all undocumented adults. The drive to expand access at the state level has fractured Democrats even in progressive states like New York and Maryland, according to Politico.

A significant political barrier has been the price tag. About 17% of Minnesota’s uninsured are undocumented, and the expansion is estimated to cost Minnesota about $8 million in the first two years and will jump to $100 million in the following two years as enrollment increases.

Minnesota lawmakers say they, too, had to overcome opposition: from Gov. Tim Walz.

The governor, whose proposed budget included expanding MinnesotaCare for children, resisted the plan to open access to all low-income undocumented residents, according to three DFL legislative sources.

The sources, who were granted anonymity to discuss private negotiations, say the Walz administration said there weren’t enough votes for it in the narrowly divided Senate. Except Senate Democrats are united behind the plan, the sources say, and some members said they wouldn’t vote for it unless all undocumented people were included.

Only after Democratic lawmakers insisted on moving forward with the plan did Walz relent, on the condition the Legislature accept a number of changes to the health budget bill, according to the sources.

Walz’s office declined to comment.

Asked about the governor’s opposition, Liebling said: “The governor needs to understand that the Legislature writes the bills. At the end of the day, we decide what goes in them, and he has the opportunity to veto them.”

Minnesota House Speaker Melissa Hortman said the Reformer is “misinformed” and that “the governor supports it,” when asked if he opposed the provision.

Hospital leaders have publicly supported the plan to expand insurance access, which increases the number of paying patients and encourages people to seek preventative care before ailments become more costly. But hospital leaders also complain that the large health budget doesn’t include additional increases in reimbursement rates from government insurance, which they say is less than the cost of providing care.

Liebling noted the reimbursement rate will increase, just not as much as hospitals would like.

Public option in the works

The health budget also includes funding to study an expansion of MinnesotaCare, which would allow residents above the income cap to buy into the program.

Minnesota could be the first state to offer a true public option, if it’s run by the state. The earliest Minnesotans might be able to enroll, however, wouldn’t be until 2027.

“This is a big step forward, it’s just not all the way there yet… There’s just a lot of steps,” Liebling said.

The state must conduct an actuarial analysis to determine state costs, premiums, and projected enrollment, among other details. If the state believes the program is feasible after finishing the study, then the state must apply for a federal waiver, which is necessary to begin implementing the program.

No other state currently has a government-run public-option, although Colorado and Washington have created something similar through plans run by private companies. Those programs have so far struggled to create affordable, broadly popular plans.

Walz has sought to allow all Minnesotans to buy into the public option during his entire tenure, but those plans were blocked by a GOP-controlled Senate until Democrats won the trifecta during the 2022 election.