ST. PAUL, Minn. — The House Health Finance and Policy Committee on Feb. 17 re-referred House File 27 to the Committee on Commerce, Finance and Policy after testimony that split along familiar lines over a proposed MinnesotaCare public option.

Rep. Josh Backer, sponsor of House File 27, said the bill would instruct state agencies to stop work on designing and seeking a federal waiver to implement a public-option model and would cancel a $21 million appropriation tied to the waiver effort. "What this bill does is it makes it very clear to the department that they are to discontinue any work on advancing a public option," Backer told the committee.

Business groups, hospitals and some provider organizations testified in favor of the measure, arguing the waiver and an expanded MinnesotaCare public option could undercut provider payments, destabilize existing insurance markets and endanger financially stressed rural and critical-access hospitals. Dan Andreesen of the Minnesota Council of Health Plans said Minnesota is not ready for a public option because of unanswered questions about enrollment, provider reimbursement and the interaction with the reinsurance program. Mary Krenke of the Minnesota Hospital Association testified that MinnesotaCare was designed for low-income residents and warned that expanding access without income limits could reduce provider reimbursement and raise losses for hospitals.

The Minnesota Chamber of Commerce and other employer groups said commercial reimbursement rates are substantially higher than MinnesotaCare payments and that shifting a large number of lives to a lower-paying public plan could force providers to scale back services or shift costs to privately insured patients.

Speakers opposing House File 27 said the public option is a potential path to lower costs and greater access. Farmers, small-business owners and people who have relied on MinnesotaCare described affordability problems in the individual market. Cindy Vanderpoel, a Minnesota farmer who testified remotely, said MinnesotaCare "probably saved our family farm" after a 2022 cancer diagnosis and asked lawmakers not to discard the waiver authority.

Union and provider witnesses also urged lawmakers to keep options open to lower premiums and improve coverage. SEIU Healthcare Minnesota & Iowa and other labor representatives said blocking the waiver would remove one potential tool for addressing unaffordable premiums and high out-of-pocket costs for workers and families.

Committee members debated the merits and timing of the waiver work and whether the state should instead prioritize reinsurance and other market-stabilizing actions. Representative Lee Beerman urged keeping the waiver option while further study occurs; Representative Backer and supporters said the state should not expend additional resources on a plan that could harm providers and destabilize markets.

Backer moved to re-refer House File 27 to the Committee on Commerce, Finance and Policy. The committee voted by voice to re-refer the bill; the motion passed and the measure will move to that committee for further consideration.