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A new Legislature gears up to tackle the same old issues

MinnPost photo by Briana Bierschbach
On Thursday, Gov. Mark Dayton presented his $300 million tax bill for 2017.

Legislators returned to the Minnesota State Capitol building this week after a messy, three-year restoration project — two months after a contentious election that ushered in 44 new lawmakers and gave Republicans control of both the House and Senate.

But any notion of a fresh start in St. Paul ends there.

The first week of the 2017 legislative session was dominated by failed issues of legislative sessions past, from tax relief and bonding projects to the problem-plagued health insurance exchange. The main push came from DFL Gov. Mark Dayton, who took to his bully pulpit to call on the Republican-controlled Legislature to take care of any unfinished business quickly in January, before the messy process of crafting the next two-year budget picks up in February and March.

That unfinished business includes taking up federal tax conformity, which was vetoed last year after Dayton’s administration discovered a drafting error in the tax bill that would cost $100 million over three years. He also wants legislators to pass a $1.5 billion package of bonding projects, after a nearly $1 billion bonding bill fell apart in the final moments of the 2016 session over partisan disagreements about light rail funding. Dayton said his new bonding bill, which includes many of the same projects that were proposed last year, would create a total of 23,000 new jobs.

It’s an unusual amount of activity for the first month of the first year of a legislative cycle, which is usually filled with ceremony and introductions.

“My old 9th grade teacher called it a make-up session,” Dayton said Thursday as he presented his $300 million tax bill for 2017, which included many of the provisions in the proposal he vetoed. “This should be seen as making up for what wasn’t done last session.”

Health insurance premium relief

But the lingering issue getting the most immediate attention is the skyrocketing insurance premiums facing people on the individual health insurance market. Dayton and legislators clashed all winter over an immediate relief package but couldn’t reach an agreement to call a special session of the Legislature. Jan. 31 is the deadline for people to sign up for 2017 health insurance coverage under the Affordable Care Act.

On Thursday, House and Senate Republicans rolled out their $300 million proposal to provide premium relief in 2017 and promised to act quickly. Their plan would include a three-month, 25 percent premium reduction for everyone on the individual market who does not qualify for subsidies — an estimated 123,000 Minnesotans. After three months, only individuals who make less than $95,040 annually or a family of four making less than $194,400 would qualify for relief. The money to pay for the proposal would come out of the state’s rainy-day fund.

“We call it the rainy day fund, and for a lot of people in Minnesota, it’s raining,” said GOP Rep. Joe Hoppe, R-Chaska, who is authoring the legislation in the House.

Quick premium relief is also a priority for Dayton, who rolled out his $313 million plan on the first day of session, but there are big differences between the Democratic and Republican proposals. For example, Dayton’s plan doesn’t include an income cap, and would instead extend relief for everyone who doesn’t qualify for subsidies for the entire year. What’s more, Dayton wants the state’s health plans to administer the premium relief, but Republicans want that handled by the Minnesota Management and Budget office, which would also determine who qualifies for reductions. MMB Commissioner Myron Frans said that would take months and be difficult for the agency to manage in the middle of tax filing season.

But everyone wants to move quickly toward a resolution.

Kurt Daudt shown following his re-election as Speaker of the House.
MinnPost photo by Briana Bierschbach
Kurt Daudt shown following his re-election as Speaker of the House.

Speaker Kurt Daudt said they would pass the premium relief proposal off the floor of the House by early next week. Senate Republican Majority Leader Paul Gazelka, who is dealing with a one-vote majority in the upper chamber, said they would move at a slower pace. But both parties want to have final bills in conference committee in the next two weeks and to start negotiations with Dayton.

How the health insurance debate unfolds over the next month will likely set the tone for the rest of the 2017 legislative session. This year, legislators must craft a two-year, $40 billion budget to avoid a state government shutdown. Last time Dayton was paired off with a Republican-controlled legislature, in 2011, gridlock led to a 20-day shutdown.

This time around, Daudt said Dayton’s relationship and interaction with legislators early on will be important. The two clashed repeatedly last year over policy issues, but the big blowup came in December, when the two stormed out of public negotiations over how to tackle immediate premium relief.

Dayton and Republican legislative leaders met privately on the first day of session, and they hope relations are friendlier during session.

“With any relationship it takes a little work once and awhile,” Daudt said. “I want him to participate more actively in the legislative process.” 

Comments (6)

  1. Submitted by Ray Schoch on 01/06/2017 - 11:28 am.

    Rhetorical question

    It seems odd that Republicans, who usually want the private sector to take over governmental functions in recent years, in this instance want want the government – the state’s Management and Budget Office – to administer health insurance premium relief. Why not the insurance companies that are actually providing and administering the plans?

  2. Submitted by Bill Willy on 01/08/2017 - 12:10 am.

    You don’t mind paying their bill, do you?

    Picking up on Ray’s point, insurance companies are making money hand over fist.

    For example, there’s an eye-popping article from last October that features Minnesota’s own UnitedHealth:

    “UnitedHealth Group’s earnings soar as ACA retreat ramps up

    “Net earnings went up 23% annually, totaling $1.97 billion in the three-month period that ended Sept. 30. Year-over-year revenue increased almost 12% to $46.3 billion as UnitedHealth recorded heavy growth in its Medicare, Medicaid, employer and consulting lines of business.”

    Yet insurance companies, including UnitedHealth, are leaving “individual market” customers high and dry (self-employed entrepreneurs, “gig-economy” participants, artists, farmers, “main street” small business owners and their employees, anyone whose boss doesn’t provide insurance) because they can’t squeeze enough cash out of those people to keep their profits soaring high enough to suit themselves and their shareholders.

    Republicans, of course, can’t blame that on ObamaCare and MNSure fast, long and loud enough.

    “See? We told you . . . This is a prime example of how the government doesn’t work because government is the problem!”

    Unless some insurance industry “products” aren’t generating enough profit, that is.

    Then, Republicans say, the government definitely IS the solution.

    In this case, the government can solve the insurance industry’s problem by giving them another $300 million of MN taxpayer’s money.

    “But wait . . . There’s MORE!” Republicans bark.

    “The Office of Management and Budget needs to handle the management of this transfer of taxpayer money,” they say, even though the director of the OMB says that would be stupid. Especially in the middle of a year in which the Republican-controlled legislature (led by shaky pillar of fiscal know-how and responsibility, Kurt Daudt) is about to start messing with the state’s $42+ billion budget.

    (But then, maybe that’s the point. Hard to say, but who could put it past them? If OMB is kept busy doing insurance companies’ administrative work, they COULD be less able to notice, calculate the impact of and sound any alarms about what might happen if “money-saving transfers” of, say, $17 or $22 million from places like the MPCA’s long-term water cleanup account to the “Pork Producers Facilities Expansion Assistance” fund, etc., were proposed and made.)

    Whatever the case, Republicans not only believe MN taxpayers need to do their part to keep insurance profits soaring by paying them an additional $300 million (on top of whatever monthly premiums they’re alREADY handing over to them), Republicans also think it’s Taxpayer’s Duty to help keep insurance companies’ administrative costs down by paying MN OMB employees to do that work for them too.

    But remember: MN Republicans are all about reducing the size and cost of government so hard working MN families can keep more of their own hard-earned money.

    Except in this case.

    According to Republicans, all we hard working families should chip-in a little extra to make sure insurance company profits stay high enough (for them to “survive”) AND chip in a little bit more to make sure they won’t have to be burdened with the administrative work involved in keeping track of the money we give them. We should pay for that too.

    And, Republicans say, this $300 million should come out of the state’s “Rainy Day” fund because 120,000 of MN’s 5,500,000 people are being hurt by the insurance industry’s refusal to play reasonable individual market ball because, apparently, they believe extortion in support of increased procurement of MN taxpayer money is a more profitable business model.

    And, apparently, MN Republicans agree with them.

    But, for the benefit of those who may be suffering from amnesia, it may be helpful to (try to) remember that the last time Republicans controlled the House and Senate and Mark Dayton was Gov there was a $6.2 BILLION deficit and NO money in the rainy day fund because Republicans had “spent it down” in lieu of raising any tax rate at any time in the previous eight years.

    But now that the Gov and Democrats, after years of good work, have gotten our fiscal house back in solid order and replenished that fund to a prudent level, Republicans just can’t wait to start gnawing away at it again (like a swarm of mice in the night).

    Bulletin: Because of the work the Gov and Dems have done there is (and has been) some extra money on the bottom line that could be used to help those folks who are “getting rained on” (by the insurance industry).

    But no. We can’t use THAT money! No no no. Republicans want to use THAT money for, guess what?

    That’s right!

    “Desperately needed tax relief” for businesses like, say, insurance businesses.

    (Where have I — where have we — heard that before?)

    The money in that reserve account is there to help the WHOLE state (all 5.5 million of us) the next time the economy hits a downturn (anyone remember 2008, 9, 10, 11 and 12?) to help prevent our state from sliding back into the kind of fiscal mismanagement/insanity it suffered from the time Tim Pawlenty was elected until Republicans (finally) got run all the way out of power (on a rail) in 2012.

    That reserve fund should NOT be used to pay-off individual health insurance market hostage-takers.

    I suggest someone put together an amendment to the upcoming tax bill to cover the cost of bailing out the insurance industry by increasing the tax rate (on an upwardly-sliding scale) of any MN business that pays any of its executives 100 times more than they pay their employees.

    Or something along those lines.

  3. Submitted by joe smith on 01/08/2017 - 10:38 am.

    If it wasn’t for all the job killing

    measures in Obamacare (30 hour work week, 50 employee rule) I would let that disaster that was pushed through with procedural rules and no GOP support just keep drowning the Dems. The individual market for UnitedHealth is a loser just like it was for 18 of the 23 providers that got out of the market all together or regionally the past 6 years. When you provide a plan for an individual that costs 850 a month (govt pays 800 of that with a subsidy) and the deductible is $10,000, everything is great until something bad happens and the poor individual can’t pay deductible. This is happening and the providers are losing money by the truck full with individual market. BTW, when you hear the cost of premiums is slowing with Obamacare they are only counting the 50 bucks the individual is paying not the 800 bucks the Govt is throwing in…. Thanks for the transparency…

    My favorite Dem moment of this ACA disaster has been Nancy Pelosi. She of the “you have to pass it, to find out the goodies in the ACA” , just said she is appalled the GOP doesn’t have a plan to replace Obamacare…. Nancy, you passed a law that you had no idea what the plan was…. Only in politics could this level of incompetence be rewarded with re-election and money pouring in to hear more gems like that… Wow!

    • Submitted by richard owens on 01/08/2017 - 03:26 pm.

      How many jobs will be lost with a REPEAL Joe?

      The PPACA was sabotaged from the beginning and continuously by a GOP that does not think that access to healthcare is a fundamental human RIGHT.

      Even the now famous (echoed ad nauseum) Nancy Pelosi quote was an out-of-context absurdity, not at all her words nor the intent.

      What has been called “Lies” about keeping your doctor were DOCTORS not cooperating with insurance providers. It had nothing to do with the administration, the PPACA law but rather insurance providers and network participants making changes.

      Your post is insincere and snarky at best, deceitful and propagandizing at worst.

      The law was nearly murdered in the crib with the enthusiasm of all those who didn’t think people’s healthcare was as important as GOP tax cuts. Now it will be tortuously dropping a few human lives at a time, always with the blame of Democrats repeatedly shoved down Dem throats.

      The love of money is constantly at odds with good governance and compassionate leadership.

      Someone you know will be hurt and maybe suffer an early death as you continue to make a partisan issue out of a basic flaw in our government. Will that touch your heart?

      Texas still refuses Medicaid money for expansion, leaving 1 in 4 Texas children uncovered. Texas is not a poor state. It simply has greedy selfish politics. You must see that.

    • Submitted by Tom Christensen on 01/08/2017 - 05:30 pm.

      8 years and 60+ tries to repeal

      The GOP had the chance to help make the ACA a better bill, that started from a successful GOP working model, but didn’t. The GOP has made 60+, phony, tries to repeal the ACA to make it look like they were doing something for their constituents, but weren’t. Eight years and the GOP still doesn’t have a viable replacement plan. They are finding it is far easier to rail and repeal than it will be to replace. Now that they have the power to make changes they are trying to save face more than to do anything for all the citizens. Trump has backed away from all his campaign promises because it is nothing but a game to him. Trump is in it way over his head and there for the attention only. McConnell is in it for the power. Ryan is in it because no one else wanted to lead the raucous house. GOP dysfunction will define the GOP for the next 4 years as the GOP continues to be leaderless.

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