Make HMOs Accountable for their Public Funds

by Rose Roach

Rose Roach
Rose Roach
MNA Executive Director

MNA Executive Director

As an organization representing 21,000 healthcare professionals, the vast majority of whom are registered nurses, MNA has long advocated for reforms that make healthcare more affordable and accessible to patients who need it because the safety and care of patients is our number one priority. As part of that advocacy we have been calling for regulations that hold Health Maintenance Organizations (HMOs) accountable for public tax dollars they receive to provide coverage for those who need it most.

Yet with billions going to the HMOs every year to administer public programs, the public has no information about how much of that money is actually providing care to patients who rely on MinnesotaCare and Medical Assistance, and how much is going into CEO salaries, reserves, marketing and lobbying.

Instead of holding the insurance companies responsible for the precious tax dollars they receive from the state, our state legislature is actually handing even more money over to them, with no strings attached. This session alone, the legislature is handing over nearly $1 billion in tax dollars to insurance companies with absolutely no requirements to account for the money, to lower costs or to improve access for patients. We have no idea how much of this money will go to actually provide care to vulnerable patients, and that’s just wrong.

Now we’re allowing them to operate as for-profit companies for the first time in decades.

As advocates for patients and public health, nurses are asking what will happen to the billions of taxpayer dollars the HMOs currently hold in reserves when they convert to for-profit entities. There is no law in Minnesota to stop a nonprofit health plan from selling its assets to a for-profit health plan.

According to the Department of Commerce, the health plans reported assets of $6.8 billion, and reserves of $2.5 billion. Let me repeat that: reserves of $2.5 billion held by nonprofit health plans.

Because they didn’t have laws in place to protect funds intended to serve the public, in states like Ohio, Indiana and Georgia, insurance company CEOs received millions in bonuses and stock options when they converted a nonprofit health plan to for-profit. Yet in conference committee, the House and Senate negotiators removed language from the Health and Human Services Omnibus bill that would have protected assets meant for the public good. Nurses are asking why?

We hear so often that if there are surplus dollars, we should give them back to the taxpayers. Well the HMO’s $6.8 billion in assets were built with the tax benefits of a nonprofit organization with a mission to serve the public. That is nonprofit money gained via all the tax advantages that nonprofits receive plus a significant portion of those assets were built with public dollars therefore they should remain with a nonprofit to serve the public good and not end up in the pockets of for profit company CEOs.

The bottom line is this –  nurses are accountable to the people they serve, their patients – HMO’s, whether non-profit or for profit, must be held to the same standard and be accountable to the people they serve, the public.  It’s long past time for full transparency and accountability when it comes to guaranteeing healthcare dollars are spent on healthcare.

*Delivered at press conference May 4, 2017


1 Comment

  1. Birth of The HMO How we got US health care

    How did the US get the world’s worst health care

    A lobbyist, a crooked president, a snap
    decision – and a pile of lies. In 1971, Edgar Kaiser, the son of the founder of Kaiser Permanente, one of the first big HMOs, went to see John Ehrlichman, a top aide to President Nixon, to lobby the Nixon White House to pass legislation that would expand the market for health maintenance organizations (HMOs). Ehrlichman reported this conversation to Nixon on February 17, 1971. The discussion, which was taped, went like this: Ehrlichman: I had Edgar Kaiser come in…talk to me about this and I went into it in some depth. All the incentives are toward less medical care, because the less care they give them, the more money they make. President Nixon: Fine. The next day, Nixon publicly announced he would be pushing legislation that would provide Americans “the finest health care in the world.”

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