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GOP proposal for health fund 'overhaul' under discussion

A Republican proposal to retain solvency in a key state health care fund is making headway at the Capitol, despite the tumultuous ride reform has taken this session.

The fund — which supports MinnesotaCare, a state-sponsored program for about 140,000 “working poor” residents — is set to run a $150 million deficit by 2013. Gov. Mark Dayton extended the solvency of the state account past 2011 when he signed the early Medicaid opt-in as his first act as governor and attracted more than $1 billion in federal funding.

But with the state’s $6.2 billion projected deficit, Republican opposition to the opt-in (with legislation to back it up) and proposed cuts to MinnesotaCare in Dayton’s budget, the future is bleak.

“It’s kind of like a track headed toward a brick wall,” said Rep. Steve Gottwalt, R-St. Cloud, of MinnesotaCare’s precarious funding.

To keep the program accessible, Gottwalt has proposed a complete overhaul of the “one size fits all” state system. His bill would effectively dissolve MinnesotaCare and instead use the Health Care Access Fund, which supports it, to provide contributions for individuals now using the program to find individual private health care plans.

“This is about maintaining eligibility for low-income Minnesotans,” Gottwalt said. “But in addition to that, it does save money.”

In fact, the move could save the state $112 million biennially, according to a House fiscal note. The monthly state contribution to each individual would be based on age: $123 for someone under 21 to $357 for those more than 60 years old; it would serve childless individuals eligible for the program beginning at 133 percent of the federal poverty line.

Gottwalt today touted the benefits of privatizing MinnesotaCare in front of a House Health and Human Services committee. In addition to removing limits in the amount of care than can be received, his legislation also puts choice in the hands of each person, he said.

“It’s not Cadillac, but it's really basic coverage,” he said after the meeting.

Among those testifying on the bill was Sue Abderholden, executive director of a Minnesota mental health organization. She warned that high deductible programs aren’t always the best method of keeping costs down and expressed concern about the amount of focus the bill puts on mental health.

The measure passed through the House committee with little discussion, but regardless of its status in the Legislature, it will have to gain Dayton’s approval. Administration spokeswoman Katharine Tinucci said in an e-mail that Gottwalt had met with the governor's staff, who referred him to DHS Commissioner Lucinda Jesson.

"I understand she is interested in discussing the proposal, but has not endorsed it," Tinucci wrote.

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Comments (3)

Most of the plans that are available for the amount of money offered have $3000 to $5000 deductibles that must be spent before the plan kicks in. That's an amount that people at 133% of poverty just do not have.

Comforting perhaps for Rep Gottwalt to call a high-deductible product "insurance" but he's calling a high-priced string bikini "outdoor clothing" -- there's barely any actual health coverage there.

Journalists ought to tease out the big difference between health care and health insurance.

This sounds like the plan Minnesota's HMOs put forth a couple of weeks ago, in which the insurers listed huge savings to be made if we only let them handle payouts instead of letting patients register with the state. If so, this is NOT a good idea.

Three bad features come to mind (in addition to those cited above):

For the most part, the savings were hypothetical, to be confirmed by research.

Worst One: The state would have to reduce the number of persons covered.

Those not needing coverage for mental illness or substance addiction treatment would get $5 (I believe) knocked off their monthly premium. I guess if they develop one of these problems later, the insurers would not help pay for treatment.

Don't these companies get enough Minnesota health care dollars already? We don't need them as middle-men taking a big chunk of dollars that should be used for CARE instead of insurance company paperwork.