Commentary
A Promise We Cannot Keep
By Rep. Steve Gottwalt
Some state legislative leaders have argued that we should enroll poor people in the early Medicaid expansion program offered under the federal Patient Protection and Affordable Care Act that was signed into law in April. They suggest it would be foolish for us not to leverage the $1 billion Minnesota already spends on Medical Assistance (our term for Medicaid) to get more of those juicy federal dollars to help people in need. But it is wrong to suggest we should prop up broken and increasingly expensive government programs with money we do not have, making promises we cannot keep.
If Minnesota accepts the early Medicaid expansion, it will short-circuit our ability to make needed reforms of public programs in our state and push 100,000 Minnesotans into a fiscally unstable program that will increase total health care spending and cost the state an additional $1 billion to implement.
Another concern is that the federal funding some are so eager to grab is not assured after 2014, potentially leaving Minnesota taxpayers holding the bag for the ongoing cost of a program with virtually no asset limits and no residency requirements.
Minnesota is already struggling to meet its share of Medical Assistance program costs, which are growing at a rate of more than 17 percent per biennium. In addition, the program has long failed to adequately reimburse hospitals and health care providers. As a result, more and more providers refuse to accept patients on Medical Assistance and other government programs, limiting their access to necessary care and making everyone else’s health care more expensive.
Nationwide, Medicaid costs are skyrocketing. Last year, Congress had to kick in $87 billion more in deficit spending to help states cover the rising costs. But it was not enough. This year, Congressional Democrats have pushed for another $24 billion in deficit spending to help states cover Medicaid costs for another six months. The Congressional Budget Office (CBO) cites federal health care spending as “the single greatest threat” to the nation’s budget stability in its report “The Budget and Economic Outlook: Fiscal Years 2010 to 2020.” CBO Director Doug Elmendorf recently stated that putting the federal budget on a sustainable path would require a “significant reduction” in the growth of health care spending.
In Minnesota, we face a projected $6 billion budget deficit next year, and our Health and Human Services spending is still set to grow by 17 percent. Minnesota’s Health Care Access Fund, which is used to help cover low-income Minnesotans through the MinnesotaCare subsidized insurance program, is headed for bankruptcy in a few years. State law requires that people be disenrolled when the fund runs out of money. What is worse, we cannot account for where the money spent on MinnesotaCare and other state health programs is going, why those programs are costing so much, or why costs are increasing so fast.
The current majority in charge of Minnesota’s Legislature has presided over major expansions of these programs while offering little in the way of sustainable reforms or cost containment. Instead, they have blocked real reform efforts, including the Healthy Minnesota Plan (HF1862) and the Minnesota Healthy Contribution Plan (HF3036), both of which are based on private-sector reforms and would pay providers commercial insurance rates, provide quality insurance coverage to those in need, and save Minnesota more than $200 million per biennium.
The Healthy Minnesota Plan would use private major medical coverage, with the state self-insuring for the deductible, to deliver better benefits to people without children in MinnesotaCare, while saving the state tens of millions of dollars. It also would pay hospitals and providers commercial rates, which are much better than the arbitrarily low payments they currently receive for government program enrollees. The bill drew great attention and interest but did not fit the government-centric approaches favored by most Democrats in the majority, and went nowhere.
The Minnesota Healthy Contribution Plan would take a more direct approach. The state would directly subsidize the cost of private health care coverage for low-income Minnesotans on a sliding scale adjusted for income and age. Applied just to adults without children in MinnesotaCare, the Minnesota Department of Human Services’ fiscal note showed this approach would save the state more than $112 million over two years and still pay hospitals and providers higher commercial rates. Some have argued that the savings in these bills are the result of kicking people off state coverage. This is simply untrue.
The private insurance market is frequently the scapegoat of those who prefer big-government solutions. It is accused of causing health care cost increases, being greedy and stingy, and being motivated only by the bottom line and not people’s health. Not true! Although every system has its bad players, the dynamics of a healthy private insurance market and the accuracy of health care underwriting, coupled with patient-centered, market-driven approaches such as health savings accounts and health reimbursement accounts are helping turn the tide for businesses and their employees across the country. Businesses have seen the advantage of getting and keeping their employees healthier, creatively promoting wellness both in and out of the workplace, and dramatically lowering increases in health care costs while improving health.
These are sustainable reforms that do not depend on questionable federal dollars or additional state and federal government spending at a time when Minnesota faces yet another budget deficit. It is time we say “no” to making more Minnesotans dependent on government programs we cannot sustain and “yes” to real reforms so we can keep our promises to those in need. MM
Steve Gottwalt represents District 15A (St. Cloud, Waite Park, St. Augusta, and Rockville) in the Minnesota House of Representatives.