DFL leaders detail rescue plan for GAMC

DFL lawmakers are proposing a surcharge increase on patient revenue at hospitals and on insurance premiums to help finance a 16-month fix for the General Assistance Medical Care program.

The surcharge increase is one of several strategies lawmakers are proposing to restore $292 million for the GAMC program, which provides health care for impoverished adults without children in Minnesota. In May, Gov. Tim Pawlenty used his line-item veto to strike $381 million in 2010-2011 funding and he unallotted an additional $15 million. Funding runs out March 1, and lawmakers, advocates for the poor, hospitals and others have been busy since the summer trying to come up with solutions. 

“It is not an ideal proposal,” said Senate Health and Human Services Budget Division Chair Linda Berglin at a press conference today at the Capitol. But it uses “real money” to continue the program until July 1, 2011, she said, and “it does so without increasing taxes.” (Here’s a webcast of the press conference.)

The House Health Care and Human Services Finance and Policy Committee will hold a public hearing to discuss GAMC proposals at 1 p.m. Monday in Room 200 of State Office Building. Here’s the joint House/Senate proposal.

The proposal suggests increasing a surcharge on hospitals’ net patient revenue to 4.97 percent from 1.94 percent and suggests an undetermined surcharge increase on insurance premium revenue. The surcharge would be in effect for 16 months, at which time lawmakers would evaluate how the GAMC changes worked.

Other proposals in the mix include capturing $130 million in federal money through some reimbursement avenues, rebates from drug manufacturers, setting up accountable care organizations at the county level, pushing the use of urgent care instead of emergency rooms for mental health issues, and ending eligibility for pregnant women (who are eligible for Medicaid), county jail inmates, and people who should be seeking a disability classification that would make them eligible for Medicaid.

Accountable care organizations would involve giving counties a fixed amount of money to care for patients and “holding them responsible for results,” said state Rep. Tom Huntley, DFL-Duluth, chair of the House Health Care and Human Services Finance Division. “You’re going to hear a lot about them in the future,” he said, explaining that the organizations are part of federal health-care reform proposals.

Lawmakers described the proposal as a bridge to federal reform proposals to expand Medicaid eligibility to childless adults up to age 64. That expansion likely won’t take effect until 2014 and 2013 at the earliest.

“This is still a work in progress and we’re going to have committee hearings in December and January because we want to have a bill done and passed and agreed to by both the House and Senate and hopefully the governor” before March 1, Huntley said.

Pawlenty, who is on a trade delegation to Chile, reportedly said in a press conference today that he has some concerns about the financing mechanisms but he would reserve judgment for now.

House Assistant Majority Leader Erin Murphy, DFL-St. Paul, said she has been meeting with Republican legislators to seek their input. Three days before the session, Pawlenty struck the GAMC funding, and a subsequent House vote to override the veto failed along party lines.

“To date, we share the view that we should try and find a solution, and I think we share a view about who’s being served and that they are vulnerable, and now we need to do the next level of work,” Murphy said after the press conference. “One of the reasons we’re having the hearing so early is so we can see the extent of proposals, what is alike and what’s different.”

She said she thinks the chances are good for a resolution. “I think there’s enough interest and enough urgency to the issue that there will be a coalition of people that push this forward and get something to signature.”

Also at the press conference was 60-year-old Al Phenow, a former construction superintendent who lost his job in the economic downturn. He recalled working as a subcontractor on paving Nicollet Mall in the 1980s. Now he relies on GAMC for his health care. He has arthritis and needs a hip replacement, and he needs a pacemaker replaced.

“I’ve always had insurance my whole life because I always worked,” he said. “My health care insurance is like a lifeline to me … and I’m sure I’m not the only one in this situation.”

Related: Proposed Medicaid expansion wouldn’t come soon enough for Minnesota’s GAMC program by Casey Selix, Thursday, Dec. 10, 2009

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