Governor Tim Pawlenty announced today that state employees will enjoy a one-time health insurance premium "holiday" due to an excess surplus in the Minnesota Advantage Health Plan. State agencies and plan members will save $19.9 million by not paying health insurance premiums in an upcoming pay period.

“This unprecedented premium holiday is possible because management and state employees are working together to control costs and improve the quality of health care,” Governor Pawlenty said. “Minnesota Advantage is nationally recognized for being an innovative public policy solution. We are changing the way we pay for health care, emphasizing better health outcomes, and including consumers in making decisions about their health care.”

The premium holiday is attributed to the Minnesota Advantage Plan performing better than expected. Fewer claims were filed which produced a surplus over and above what is required to cover future claims.

Minnesota Advantage has helped members make wise healthcare decisions through a variety of features:

• Health Assessments that inform employees of their health status and provide follow-up as wanted and needed.
• Disease management programs that work to inform members how to prevent or better manage chronic health conditions.
• Participation in the national Bridges to Excellence program to encourage and reward medical providers who provide optimal care for a given condition such as diabetes.
• Use of the Minnesota Community Measurement program to help employees choose a clinic based on qualitative measures.

Minnesota Advantage collects premiums of approximately $452 million annually to provide benefits for 120,000 eligible state employees and their dependents. The premium holiday will save members who pay a healthcare premium approximately 4.4% of their total annual premium, or approximately $53 dollars per employee with dependent coverage.

For employees paid bi-weekly this will equate to one healthcare premium deduction. Employees and state agencies who pay premiums twice a month will experience the premium holiday on December 8, 2006 , while those who pay once a month will see their savings in January, 2007.

Minnesota Advantage continues to innovate and develop features that help members to manage their healthcare expenses, fully understand the cost of a given treatment, and most importantly, live healthy, productive lives. Some of the new features include:

• Reduced co-pays when using an expanded list of retail convenience clinics for convenient and fast treatment for common aliments.
• Introduction of Advantage Health Advisors to assist members in getting the help they need to work through serious questions about treatment options, provider selection, and health benefits.
• Use of Centers of Excellence within the healthcare industry. These centers provide high quality care in a cost effective manner for specific medical conditions.
• Implementation of QCare, a quality of care program that rewards excellence in medical practice through pay for performance. Providers are rewarded for their outcomes, not for their volume. This market-based approach is just one of many new tools being implemented to fundamentally change the present, volume-based, system.

Governor Pawlenty issued an executive order in July 2006 that requires the State of Minnesota to apply QCare to all state purchased health care – now $4 billion annually – for such programs as Medical Assistance, Minnesota Care, and the Minnesota Advantage Health Plan. All state contracts with health plans and health care providers will contain significant new incentives and requirements for greater reporting of costs and quality of care delivered, for meeting targets and goals, for improvements in key areas, and for greater overall accountability and results.

“State government is leading health care reform with innovative changes and by using our purchasing power more effectively,” Governor Pawlenty said. “The positive results we have seen in the Minnesota Advantage plan can be replicated in the private market when health care quality is measured and rewarded. We are demonstrating that lower costs can be achieved when quality is emphasized.”