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Feds to unplug medical subsidy in Minnesota

  • Article by: KEVIN DIAZ
  • Star Tribune
  • September 11, 2008 - 10:29 AM

WASHINGTON - The Bush administration plans to drop Medicaid coverage for 18,000 low-income parents in Minnesota, a move that has stunned state officials who say they didn't see it coming.

The decision, buried in a 29-page document outlining federal changes affecting the state's subsidized health program, known as MinnesotaCare, has prompted written protests from all 10 members of Minnesota's congressional delegation, along with two emergency bills to head off the cuts, which could total $135 million over three years.

On Wednesday, state officials were given two more weeks to make their case that the cut-off is unwarranted and could increase state costs and the ranks of the uninsured.

Most of those affected are parents of children who have been enrolled in the state children's health insurance program (known as SCHIP), the focal point of a heated political fight with the White House, which vetoed two separate Democratic proposals to expand the program last year.

One of the sticking points: The Bush administration's opposition to covering parents with children's health program funds, a practice used by Minnesota and a half-dozen other states that have their own programs for children's health coverage.

"We believe that by covering parents, you improve access for kids," state Medicaid Director Christine Bronson said. "Families that are covered are more likely to bring their kids in."

Minnesota officials say they have long relied on federal Medicaid dollars to expand the reach of MinnesotaCare, which has about 117,000 enrollees across the state, about 30,000 of them the adult parents of children who get subsidized health care.

Among them are Carol and Caleb Maendel, parents of two youngsters, who enrolled in MinnesotaCare last month to supplement Caleb's wages as a ramp agent for Mesaba Airlines in the Twin Cities.

The Maplewood family's $55-a-month premiums would easily quadruple without their federal-state subsidy, Carol Maendel said. "We wouldn't be able to afford it, not even close," she said. "We'd probably go without insurance."

Extension granted

The Medicaid cuts, presented to state officials on Aug. 11, target families like the Maendels that earn between 100 percent and 200 percent of the federal poverty line -- or a maximum of about $42,408 for a family of four.

An estimated 18,000 adults in MinnesotaCare fall into the same income category as the Maendels, putting their coverage at risk in the coming months unless state officials can renegotiate decade-old waivers that expired last month.

A mostly united front

Eight members of the Minnesota congressional delegation -- including Republican Sen. Norm Coleman and Republican Rep. Jim Ramstad -- signed a letter Tuesday "strongly" urging Health and Human Services Secretary Michael Leavitt to reinstate the state's waiver. All eight supported attempts to override President Bush's veto of the children's health program expansion.

Two other Minnesota Republicans -- Reps. John Kline and Michele Bachmann --wrote a shorter and milder letter to Leavitt, also asking his department to reconsider. Kline and Bachmann supported the Bush veto on the children's health program.

CMS officials agreed late Wednesday to a two-week extension to continue negotiations with the state.

Gov. Tim Pawlenty praised the extension. "A significant loss of federal funding would seriously jeopardize the state's ability to assist low-income residents in need of health insurance," said his spokesman, Brian McClung.

Meanwhile, Rep. Keith Ellison, D-Minn., calling the federal action "callous and over-reaching," filed a bill in the U.S. House on Tuesday that would extend Minnesota's health care waiver through April 2009, three months into the next administration.

A Senate version of the bill was filed Wednesday by fellow Democrat Amy Klobuchar.

A number of poverty and health advocates also are mobilizing against the cuts, which they say penalize states like Minnesota that use federal subsidies to supplement their own health programs. “It’s bizarre for the federal government to penalize the state for its own success,” said Katherine Blauvelt, a policy analyst for the Minnesota Council of Nonprofits.


“Every time there is a cut in MinnesotaCare, hardworking families lose ground,” said Debra Holmgren, president of Portico Healthnet, a non-profit health and human services organization in the Twin Cities.


With the prospects murky for any but top-priority bills getting through the coming two-week session of Congress, opponents of the Medicaid cuts are focused on direct administrative pressure.


Said Rep. Betty McCollum, D-Minn: “A stroke of a pen by a Bush bureaucrat could reverse this decision.”

Kevin Diaz • 202-408-2753

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