March 21, 2011; Source: | This sounds like a better idea for cash strapped states than the one we reported yesterday from South Dakota. In Minnesota, the governor is suggesting that the state’s nonprofit HMOs pitch in some of the $1.36 billion they hold in surpluses to the state budget to help close a $5 billion deficit.

One justification for this proposal is the fact that the plans have profited a great deal from managing three state health insurance programs. There is also a model for them to follow since last week, UCare, a Minneapolis-based nonprofit health plan pledged $30 million to help close the state’s budget gap. UCare is somewhat unique in that it only services the state plans while the other insurers who are being asked to consider contributing to state coffers do commercial business as well.

While states have required minimum levels for reserves, few have maximums. The conversation about what a maximum level should be has been going on for a number of years in Minnesota. None of the other health plans have responded to the governor’s request.—Ruth McCambridge