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MinnesotaCare At Risk In State’s $5B Problem

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ST. PAUL, Minn. (AP) — Minnesota has long been known as a compassionate state that takes care of its vulnerable — the Midwestern version of Sweden.

But an innovative health care program that received widespread acclaim for providing insurance to the working poor is now at risk as lawmakers grapple with a massive deficit. Republicans who took over the Legislature this year instead want to hand out subsidies to the working poor to buy private insurance.

Minnesota was among a handful of states — including Washington and Oregon — that went beyond Medicaid and Medicare programs to cover the uninsured in the past couple of decades, epitomizing a tradition of providing government help for lower-income people. Those programs are shrinking or disappearing altogether as huge deficits eat into state budgets.

Pennsylvania terminated the adultBasic state-funded program for more than 40,000 low-income adults earlier this year. Tennessee halted enrollment in its program for working uninsured adults 16 months ago to cope with budget pressure. Washington’s Basic Health Plan has a waiting list that tops 140,000 after enrollment was frozen two years ago.

“For the past 20 to 30 years, we’ve seen growth in the government sector of health care and I’m not persuaded — I think a lot of people are not persuaded — that that’s been very effective. Now we’re getting to the point where we’re also seeing that it’s not very financially doable,” said state Sen. David Hann, a suburban Republican leading the charge to end his state’s program, called MinnesotaCare.

Republicans are pushing to replace MinnesotaCare for adults with the proposed subsidy program, Healthy Minnesota, starting in January. They are also want to seek federal permission to switch children to the subsidy plan. Critics say that could leave people with unworkable options, such as buying a high-deductible policy without the income to cover the deductible.

Democratic Gov. Mark Dayton has raised financial objections to the plan, which is expected to be part of end-of-session budget talks over the coming week.

New coverage options may be coming for adults within three years, if the federal health care overhaul survives legal and political challenges that long. The law will expand Medicaid coverage for the poor, while offering subsidies to help the working poor purchase coverage through state health exchanges. Not enough detail about that option has emerged to say whether MinnesotaCare patients would do better or worse.

The New York Times called Minnesota’s program, passed in 1992, “the most sweeping effort yet to provide health insurance to people who lack it.”

Former GOP Gov. Arne Carlson, who signed the MinnesotaCare bill into law after intense negotiations with the Democratic-controlled Legislature, said Republicans back then were focused on controlling costs such as unpaid hospital bills and providing incentives for single mothers to get off welfare. In a bipartisan spirit that seems foreign today, he said both sides gave ground to come up with a program that was swamped when it opened and helped Minnesota chart the nation’s lowest rate of uninsured residents for years.

It’s a position that Massachusetts now holds after a sweeping overhaul of its health care system including requiring residents to have health insurance.

One of the Minnesota plan’s Democratic architects, state Sen. Linda Berglin, remembered fielding questions from lawmakers in other states about the funding, which included a tax on the state’s medical providers, a higher cigarette tax and premiums from those who signed up.

“One of the strong selling points for Republicans was that people were going to pay what they could afford, and that was a lot better than just not having coverage and getting really sick and not paying anything,” said Berglin, who has become the program’s biggest legislative defender.

Those who rely on MinnesotaCare today include Theresa Arnold, a single mother in a Minneapolis suburb. Arnold never thought she would have to turn to government health care until she found herself uninsured after losing a real estate management job in 2009. After several tries and denials because her income from a severance payment and unemployment was too high, she and her teenage daughter got into MinnesotaCare.

“I think it’s good as a stopgap, as a safety net, as some sort of protection, but I don’t think it should be long-term,” Arnold said. “If and when I secure employment and my company offers health care, I will take it. Because I want to make room for the next person who needs to get over the hump .”

In Minnesota, even Democrats who support MinnesotaCare aren’t clear on its future.

The federal health care overhaul could overtake the program and others like it in 2014. The law will expand Medicaid nationwide to childless adults and families making up to 133 percent of the federal poverty level. The working uninsured — those with incomes between 133 percent and 400 percent of the poverty level — will get subsidies to buy insurance through online state health insurance marketplaces.

States also have the option of tapping federal dollars to start basic health programs for a limited slice of low-income people and legal immigrants.

Meanwhile, the fate of programs such as Washington’s Basic Health Plan — one of the first state-funded programs — is up for debate as lawmakers struggle to cut billions from state budgets. Washington state faces a $5 billion shortfall in its next two-year budget.

Basic Health covers 55,000 poor adults and families.

Times have changed since 2003, when enrollment peaked at more than 134,000 people. This year, Democratic Gov. Christine Gregoire recommended eliminating the program altogether, but lawmakers instead are looking at cuts in enrollment and spending. The state has dropped more than 50,000 people from the program since 2009.

Said Berglin, the Minnesota state senator: “Even in this economy there are still a lot of people that really believe that everyone should have affordable coverage.”

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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