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MCHA Basic Facts & Transition

Background on MCHA

Minnesota Comprehensive Health Association (MCHA) is the state’s high risk pool that provides health insurance coverage to individuals as a plan of last resort when they cannot get coverage in private markets. MCHA is considered a model high risk pool in the nation.

  • MCHA was created by the Minnesota legislature in 1976 and was one of the first two operational high risk pools in the nation.
  • MCHA is one of the largest state high risk pools with 25,815 members (as of December 2012)
  • MCHA is a non-profit company.  MCHA contracts with Medica for plan administration. 

MCHA Public Meeting Archives

MCHA Public Meeting | Videoconference on July 22, 2013  - (Archived Presentation .wmv) 

MCHA Public Meeting | Videoconference  on July 30, 2013  - (Archived Presentation .wmv)

Minnesota Comprehensive Health Association Frequently Asked Questions. Click on the question to view the answer.

  • Who is covered by MCHA?

    MCHA covers Minnesotans that cannot obtain insurance through other means such as:

    • Individuals who are rejected in the private market due to a health condition or for other reasons
    • Individuals who are self-employed 
    • Employees of employers that do not provide employee health coverage
    • Dependents of employees working for companies that do not provide dependent coverage
    • Individuals who have been laid off or terminated from employer coverage
    • Individuals over age 65 but not eligible for Medicare
    • Former employees of bankrupt companies
    • Lifetime/annual maximum benefit reached
    • Health coverage cancelled by their insurance company – employers dropping group coverage
    • Insurance companies that become insolvent

    In addition, MCHA insures those individuals that lose group coverage and are eligible under either the:

    • Health Insurance Portability and Accountabiltiy Act (HIPAA), or
    • Health Coverage Tax Credit (HCTC) program for workers who lost jobs due to increased imports, foreign trade, etc.
  • How is MCHA funded?

    MCHA receives its funding from two main sources:

    1. Health insurance premiums paid by members
      • Premium rates for MCHA policies must be set between 101% and 125% of weighted average for comparable policies.  Currently, rates are at approximately 111% of the market price for most deductibles plans.
      • The premiums cover approximately 43% of the costs of MCHA 

    2. Subsidy mechanism
      • The remaining losses not covered by premiums are assessed to each health insurance company based on its amount of health insurance premiums written in Minnesota. 

        Additional sources of income:  

    3. Healthy Minnesota Contribution Program (HMCP) – HMCP provides adults without children who have income at or above 200% of the federal poverty guidelines (FPG) through 250% FPG (about 670 individuals) with a monthly defined contribution to use towards the purchase of private health insurance or insurance through MCHA.   Losses are tracked separately and are reimbursed out of the health care access fund. 

    4. Federal grants – In the past, MCHA has received federal grants that the Center for Medicare & Medicaid Services (CMS) provides to each of the 35 state high risk pools.  In 2012, $1,690,592 in federal grant funds were applied to MCHA operating losses;  MCHA uses the rest of the federal grant funds it receives for a low income subsidy program that provides premium refunds to low income individuals enrolled in MCHA; in 2012, MCHA provided low income subsidies totaling $1,159,000.
  • What is happening in 2014 with MCHA Transition

    Under the federal Patient Protection and Affordable Care Act (ACA), beginning in 2014, MCHA will not be needed to perform this function in the market due to:

    • Guarantee Issue – Beginning in 2014, health plans will no longer be able to reject someone due to a preexisting health condition.
    • No preexisting condition exclusions – Beginning in 2014, health insurance plans can no longer exclude individuals based on a preexisting condition.
    • Lifetime/Annual Limits – Lifetime and annual limits have already been eliminated on most plans, except plans that received federal waivers. The plans with federal waivers will expire in 2014.
    • Open Enrollment and Special Enrollment Opportunities – Individuals will have the opportunity to enroll in coverage during open enrollment periods as well as other times of the year if they have a life change, including changes in income, etc.
    • The Health Care Tax Credit (HCTC) Program is currently set to expire January 1, 2014.

    There are special eligibility categories in MCHA that will need to be addressed as part of this transition:

    • HIPAA Eligible enrollees (MCHA is designated as the state alternative mechanism for HIPAA compliance.  Federal guidance is needed to determine how this designation is changed.)
    • HCTC Program participants (If program extended beyond January 1, 2014.)
    • MCHA Medicare Supplement policyholders (429 members as of December 2012. These individuals are not eligible to enroll in the Exchange.)
  • Is there a process to develop a phase out of MCHA coverage?

    The Minnesota Insurance Marketplace Act (2013 Session Law Chapter 9) directs, “the commissioner of commerce in consultation with the board of directors of the Minnesota Comprehensive Health Association, has the authority to determine the need for and to implement the eventual appropriate termination of coverage provided by the Minnesota Comprehensive Health Association under Minnesota Statutes, chapter 62E. The phase-out of coverage shall begin no sooner than January 1, 2014.”

    As authorized by the Minnesota Insurance Marketplace Act, the Commerce Department, in consultation with MCHA, has begun the process to determine the need for and to implement the eventual appropriate termination of coverage provided by MCHA. The transition of coverage (including phase-out) from MCHA to the health insurance markets shall not begin sooner than January 1, 2014. The transition process will include an opportunity for public notice and comment on a draft transition plan.

  • What are the goals in developing a transition plan for MCHA coverage?

    The initial goal of a transition plan, as required under the Minnesota Insurance Marketplace Act, will be to determine the need for and to implement the eventual appropriate termination of coverage provided by MCHA, with any phase-out of coverage not to begin sooner than January 1, 2014. The Commerce Department goals in developing a transition plan will include the following:

    • Review and analyze key financial, operation, enrollee, and other data;
    • A safe and orderly transition process;
    • Ensure the least amount of disruption to the enrollees;
    • Minimal disruption to the health insurance markets;
    • Regular and accurate communication and outreach to assist enrollees in their transition process;
    • Minimize MCHA tax and cost burden on the public and health insurance markets;
    • Sufficient notice to current enrollees to take advantage of opportunities available in the marketplace in 2014; and
    • Opportunities for public comment and feedback.
  • What is the timeline for the MCHA transition?

    The Commerce Department, in consultation with MCHA, will develop and implement a safe and orderly phase-out plan for the MCHA transition under the following timeline:

    April 1 - June 15, 2013 Begin analysis for draft transition plan, including public input and comment and stakeholder meetings.
    June 30, 2013 Release Draft Transition Plan for public comment
    July 1 - 31, 2013 Public Comment on Draft Transition Plan
    August 31, 2013 Issue Final Transition Plan
    Sept. 1- 30, 2013 MCHA enrollees provided information for open enrollment period 
    Oct. 1 - March 31, 2014 Open Enrollment Period for MNsure

    For additional information, please see the detailed timeline (.pdf). 

  • How can the public provide comments and input on the MCHA transition?

    There will be a variety of opportunities for the public to give comments on the MCHA transition. Starting May 1, 2013, comments can be submitted to After a Draft Transition Plan is released on June 30, 2013, public comments can be submitted concerning the plan to the Department during July 1 to July 31, 2013. MCHA will update enrollees about opportunities for public comment, including public meetings. The Commerce Department will issue public notices and post information on its website.

  • What will be included in an MCHA transition plan?

    Generally, an MCHA transition plan will seek to achieve the goals for transitioning MCHA enrollees. It will identify the ongoing needs of MCHA enrollees, coverage options that are available in the marketplace, a timeline when MCHA members might be expected to find new coverage in the market. The plan will set out the expected timeline for phase-out of MCHA, the supports that can be provided to MCHA enrollees to ease the transition, any financial needs of MCHA for the enrollee transition, and communication, outreach plans and strategies to ensure a safe and orderly transition of MCHA enrollees. 

  • Why would MCHA need to be kept open past January 1, 2014 if people can enroll in any health plan regardless of preexisting health conditions as of that date?

    MCHA has approximately 26,000 members, many of whom have serious ongoing health conditions. The Department, in consultation with MCHA, is working with stakeholders to determine the most effective and responsible manner to transition members from MCHA to the private markets while they are in the midst of a course of treatment without causing hardship, including developing education and outreach efforts to inform consumers of upcoming changes.

  • Why does MCHA need to phase out at all?

    With the advent of the ACA’s requirements of guaranteed issue in the entire market, which means that insurance companies can no longer deny coverage to individuals with pre-existing conditions, the reason for MCHA's existence as the insurer of “last resort” to provide coverage for individuals who cannot purchase products in the private market is going away. Additionally, a significant portion of MCHA enrollees who do not have large ongoing claims may look to leave MCHA as new opportunities and subsidies are available in the new insurance market beginning in 2014.

  • How can the public contact the Commerce Department on the MCHA transition?

    Consumers who are interested in providing feedback on the MCHA transition can direct comments to

    For information regarding MCHA, visit the Minnesota Comprehensive Health Association website.

Answers to questions from Minnesota Comprehensive Health Association (MCHA) Public Meetings conducted from May 1 through June 15. Click on the question to view the answer.

  • Health insurance companies can no longer deny insurance to those with a pre-existing condition, correct?

    Correct. Beginning with health plans purchased during open enrollment and effective January 1, 2014 or after, insurance companies can no longer deny  coverage,  limit your benefits, or adjust your premium cost due to a pre-existing health condition. Companies also cannot deny you coverage based on:

    • MCHA enrollee status
    • no current insurance coverage
    • lifestyle standards, like height or weight
  • How long will MCHA remain open?

    The Department of Commerce is currently evaluating options for how to wind down MCHA in a safe and orderly transition process for current enrollees.  MCHA will remain available to current enrollees throughout 2014.  However, the final transition plan will identify how the transition process will work during and after 2014, and when MCHA will close permanently.  Some advantages in transitioning from MCHA to a new health plan include:

    • Preventative care will be covered in health plans purchased during open enrollment, effective January 1, 2014 or after
    • There is no limit to coverage (there is a limit with MCHA coverage)
    • For most enrollees, we anticipate the rates will be lower. Your premiums through MCHA are always 101% - 125% higher than the market rate, and this will not change in 2014.
  • How do I find someone to help me transition from MCHA to a new health plan?

    The final transition plan will include strategies for transitioning to new health coverage.  Before October 1, 2013, MCHA will send all enrollees a list of Navigators, In-Person Assisters, Agents, and Brokers for an individual to contact for help.  In addition, Minnesota’s Health Insurance Exchange, MNsure will have a list of many of these individuals on its website and the MNsure help line will be open September 3, 2013 to answer questions about open enrollment.

  • Will individuals turning 65 in 2014, 2015, 2016 have to transition off MCHA by March 31, 2014?

    At this time, individuals turning 65 in 2014 do not have to transition off MCHA if the individual prefers to stay with MCHA coverage. The Final Transition Plan will identify a possible transition process for individuals turning 65 in 2015 and 2016. However, you are encouraged to explore your health insurance options during open enrollment on October 1, 2013 to see if a better plan or rate is offered through another health insurance company.

  • Will there be a MCHA rate increase?

    MCHA will communicate with all its enrollees in November 2013 whether there is a rate increase that will be effective January 1, 2014 – December 31, 2014.  

  • Can I keep the same doctor?

    Whether your doctor is part of the network of your new insurance coverage will depend on which plan you choose. You will need to research the different health plans and the networks available to you.  The MNsure website or your insurance broker/agent will have this information when you begin to research new health plans during the open enrollment period, October 1, 2013 . You will be able to look for your doctor in the plans offered and choose the option that will work best for you.

  • What is MNsure?

    MNsure is Minnesota’s Health Insurance Exchange, where Minnesotans can shop for health insurance, and compare coverage and cost. We encourage you to visit for complete information.  In addition to purchasing health coverage online, Minnesotans who choose to use MNsure will be able to learn whether they qualify for various public programs or tax credits to help pay for insurance. Individuals also have the choice whether to buy plans outside of MNsure; this is similar to the marketplace as we know it today. 

  • What is the advantage of buying health insurance through MNsure vs. going outside of MNsure?

    Please visit for all information related to the new health insurance exchange and its benefits.  Some advantages for going through MNsure include:

    • MNsure is a one-stop place to shop for health plans from a variety of health plan companies
    • Plan options will be displayed side-by-side for easy comparison
    • Purchasing coverage through MNsure will let you know if you qualify for tax credits or financial assistance – and, tax credits can only be obtained if you purchase your health coverage through MNsure.
    • You may also qualify for a low-cost or free plan through MNsure
    • Easy enrollment,  you apply and enroll online in health benefit plans
    • You know the potential cost of each plan will be
    • MNsure will give you examples of average costs for common health services
    • Plans on MNsure will have quality ratings for hospitals and clinics in your community
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