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John Overmyer, NewsArt

WHAT IT COSTS

Among the cuts Dayton finds objectionable in the GOP human services budget bill:

• Disenrolling very poor adults from Medicaid and restoring previous program: $590 million.

• Dropping some policyholders from MinnesotaCare and giving them a voucher for purchase of high-deductible private insurance: $276 million.

• Shrinking mental health services: $49 million.

• Reducing services for the homebound elderly and disabled: $188 million.

• Turning General Assistance, which pays the very poor $203 per month, into a smaller county block grant: $20 million.

Minnesota Budget Project.

Can surcharges be part of budget deal?

  • Article by: EDITORIAL
  • Star Tribune
  • June 21, 2011 - 10:08 PM

It's about health care -- again.

A partisan fight over health care for the poor drove Minnesota into its first government shutdown in 2005. The same issue looms large this year as state government marches closer each day to a second shutdown if no budget is in place before July 1.

Gov. Mark Dayton has reserved his harshest criticism of the GOP-approved budget for its health care parsimony toward the poor and disabled, for good reason. The now-vetoed Republican bill is $1.6 billion, or 13 percent, smaller than base funding for aid to the Minnesotans least able to help themselves.

Advocates for the poor estimate that the Republican plan would deprive more than 100,000 Minnesotans of access to affordable health insurance coverage, rip the income safety net for the lowest-income single adults and decimate state-funded mental health services.

The Republican bill would also undo Dayton's much-applauded first act as governor. It would disenroll tens of thousands of poor adults from Medicaid and push them back into a meager program that served them badly in 2010.

No other feature in the GOP budget puts the partisan divide in starker contrast -- or more directly invited a veto. Clearly, the long-running battle over health care for the poor is not over.

Yet recent practice in financing health care for the poor includes what could be a key ingredient for compromise between Dayton and the Legislature. For 20 years, state government has collected modest surcharges from health care providers, including hospitals, nursing homes and managed care organizations.

The state then returns that money to providers via higher rates for services. Those higher rates in turn draw down additional federal Medicaid dollars. Many states use the same ploy.

Dayton's initial budget proposal included a big boost in those surcharges, for a net gain to the state of $624 million in 2012-13. The vetoed Republican bill omitted them entirely. In April, this newspaper recommended using the surcharge approach to raise roughly $450 million for the 2012-13 state budget.

We renew our motion. And we're not alone.

In recent days, the Capitol has buzzed with surcharge hints, as would-be dealmakers consider ways for legislators to come closer to Dayton's spending goal and win his signature on bills without breaking Republican campaign vows to avoid higher taxes.

Republicans seeking assurance that Medicaid surcharges are not viewed as tax increases need only look to former GOP Gov. Tim Pawlenty's experience. His first budget, signed into law in 2003, raised the nursing home surcharge.

But he suffered no dent in his "no new taxes" credentials. (Similarly, all but one of his numerous fee increases kept Pawlenty's anti-tax reputation intact. The exception: the "health impact fee" on cigarettes, which was a tax by another name. Dealmakers, take note.)

Legislators and their special interest allies who are keen on reducing government spending should consider this: Much of what is claimed as savings in their human services bill actually shifts costs to the private sector or raises government costs in future years.

"Uncompensated" care for the poor winds up being financed with higher private insurance premiums. Cuts in home-based care wind up adding to nursing home costs in the not-distant future, as frail people are forced into institutions.

Adding to human suffering is neither the moral nor the smart way to rein in exploding health care costs. As they better understand the bill Dayton vetoed, Republican legislators should be eager to improve it. Higher surcharges give them that chance.

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