February 16, 2012
New HMO to enter the Minnesota market
For the first time since 1998, Minnesota certified a new Health Maintenance Organization (HMO) Wednesday.
Gundersen Lutheran Health Plan Minnesota intends to operate an HMO in four counties in southeastern Minnesota: Fillmore, Houston, Olmsted and Winona.
Minnesota Health Commissioner Dr. Edward Ehlinger signed a certificate of authority to operate an HMO on February 15 for Gundersen Lutheran Health Plan, Inc., of Onalaska, Wisc., the parent company of the new HMO.
"Our role is to make sure that HMOs have the resources to meet their obligations to provide health care to their members. In this case, Gundersen has been certified and given the go ahead to start serving Minnesota residents and employers," Ehlinger said.
The Minnesota Department of Health (MDH) regulates health plans to ensure that they follow the applicable laws and rules governing financial solvency, quality of care, access to services, complaints, appeals and other consumer rights. The Minnesota Department of Commerce conducted the financial analysis of Gundersen's ability to act as an HMO in Minnesota.
Gundersen Lutheran Health Plan started in 1995 as a way for the Gundersen Lutheran Health System to finance its own employees' health care. It has more than 90,000 members and has expanded to provide benefit plans for other area businesses, and it is currently licensed to do business in Wisconsin and Iowa.
In Minnesota, an HMO is defined as an organization that provides comprehensive health maintenance services or arranges for the provision of these services to enrollees on the basis of a fixed prepaid sum without regard to the frequency or extent of services furnished to any particular enrollee. Minnesota currently has eight HMOs operating in the state - Gundersen will be the ninth. Minnesota law only allows nonprofit or governmental HMOs to operate in Minnesota.
Lawmakers have made some changes over the years to allow HMOs more flexibility, making it easier for new HMOs to enter the market. Deductibles were not allowed for HMOs until 1996 when the Legislature permitted HMOs to charge up to $1,000 per person for an annual deductible. Copays were only allowed up to 25 percent of the median provider charge, if a flat-fee copay was used, or 25 percent of the actual charge, if percentage co-insurance was used. In 2002, the Minnesota Legislature significantly increased these amounts. They raised the allowable copay to 40 percent of the median provider charge for office visits, and 50 percent of the median provider charge for drugs. The deductible was raised to $2,250 per person, $4,500 per family for the large HMOs, and $3,000/$6,000 for small HMOs, as determined by percentage of Minnesota Comprehensive Health Association assessments.
"We welcome Gundersen to the Minnesota market and are glad that Minnesotans and employers in the Rochester and Winona area will now have more choices when shopping for health care coverage," Ehlinger said.