Meiches and Massa: The health care shift -- Federal money for the taking

  • July 5, 2010 - 7:32 PM

As a community of health care providers, we are disappointed with Gov. Tim Pawlenty's decision to forgo $1.48 billion in federal dollars for Minnesota and his failure to provide 100,000 Minnesotans with better health care.

Under the federal health care reform law, all states will expand Medicaid eligibility to low-income adults without children in 2014. States were given the option to adopt early Medicaid enrollment at current federal-state Medicaid matching rates. Given Minnesota's historic tradition of providing coverage to low-income adults with state-only dollars, this option is an obvious choice for the benefit of patients and the long-term benefit of the state budget.

Yet Pawlenty has decided not to take the federal government up on its offer, an unusual move since it will cost his constituents health care coverage and jobs.

His stated reason was that the state could not afford it. Pawlenty told the media the change would cost the state's general fund $430 million. However, he omitted the fact that the shift would save $240 million elsewhere, leaving the real net cost to the state government at about $190 million over a three-year period. He also forgot to mention that lawmakers already paid for early Medicaid enrollment during this year's legislative session, primarily by cutting payments to hospitals, physicians and other health care providers.

So the problem this time wasn't finding the money. Lawmakers already found it back in May.

Besides the cost issue, Pawlenty also cited ideological concerns about relying on federal funds to provide state services. He is concerned that the federal government will not follow through on its commitments to fund health care programs in the future. That argument rings disingenuous to us. Pawlenty, like others before him, has consistently pursued policies to capitalize on federal Medicaid funds. The governor's drastic budget cuts and his 2009 line-item veto of General Assistance Medical Care (GAMC) funding are actual examples of state government backing away from commitments as opposed to any theoretical abandonment by the federal government that so concerns the governor.

Don't forget, Minnesotans pay federal taxes and therefore deserve to see funds returned to the state when it is time to spend the money.

Pawlenty's other reason is this isn't his kind of reform. Instead, he said Minnesota should build on the recent reforms made to the GAMC program, designed to serve about 30,000 of Minnesota's poorest residents, many of whom are homeless and mentally ill.

Earlier this year, Pawlenty was the primary advocate for a new approach to GAMC, whereby the state cut funding from $400 million to $162 million annually and instructed hospitals to assume the financial risk of providing services to GAMC enrollees.

This approach is not meaningful reform, and early signals suggest that it is resulting in significant access problems for enrollees, shifting costs to expensive emergency rooms. The program is so underfunded and poorly designed that only four metro area hospitals have agreed to participate. Now GAMC enrollees in greater Minnesota have these choices: Go to local hospital emergency rooms, look for clinics willing to give free care or commute to the Twin Cities.

The governor apparently finds this a preferable outcome for Minnesotans than letting them enroll in Medicaid, which would allow them to receive care in clinics and hospitals in their hometowns.

Finally, early Medicaid enrollment is not some huge increase in state welfare programs. In fact, about 80,000 of the 100,000 people who would be added to Medicaid by 2013 are already on state programs that are completely funded by Minnesota taxpayers. The point here is that shifting these people to Medicaid allows the federal government to pick up part of the tab that, for years, Minnesota taxpayers have been shouldering alone.

The governor's decision just doesn't make sense. It will cost Minnesotans jobs, health care coverage, and more than $1 billion. It is a decision that makes sense only through a narrow, politically focused lens.

We urge Pawlenty to change his mind. If he doesn't, we ask our next governor to take advantage of this opportunity. You will have until Jan. 15, 2011, to sign the executive order to enact Medicaid coverage, increase access to health care throughout the state and improve patient care.

Dr. Robert K. Meiches is chief executive officer of the Minnesota Medical Association. Lawrence J. Massa is president and CEO of the Minnesota Hospital Association.

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