Editorial: Feds offer a better GAMC solution

It's always hard to admit that carefully crafted plans aren't working as intended. That bit of human nature may explain Gov. Tim Pawlenty's unwillingness to recognize that the March changes he engineered in a health care program for about 35,000 of the state's poorest adults won't serve any of them very well, and likely won't serve some of them at all.

Then again, perhaps a Republican governor seeking national GOP notice has a hard time acknowledging that the new Democratic-backed federal health reform law might do the people of his state some good.

For whatever reason, Pawlenty is adamant: He won't sign a bill that ends the recently revised, stripped-down General Assistance Medical Care (GAMC) program and enrolls the low-income people it serves in Medicaid.

That's so even though Medicaid is 50 percent financed by the federal government. It provides much better access to medical services, at more adequate rates for providers, than the new GAMC does. And, under the new federal law, it offers forward-looking states like Minnesota a chance to proceed on a larger scale with proven strategies for reducing health care costs.

Pawlenty's stated reason for rejecting that feature in both the House and Senate human services bills is financial. The change would be "prohibitively expensive at a time when both the [fiscal] 2010-11 and the [fiscal] 2012-13 budgets are in deficit," he said in a May 4 letter.

That appeared to be true in days immediately following the federal bill's enactment, when estimates of the state's share of the tab for moving the GAMC population to Medicaid ran upwards of $900 million over three years. (Beginning in 2014, health care for the GAMC population will be paid for entirely by the federal government.)

But that was before state Sen. Linda Berglin got to work. The Senate DFL's health budget wizard found ways to draw down more federal dollars, employing surcharges on health care providers that could then be refunded through other avenues.

Berglin crafted a bill that cuts state spending more deeply than Pawlenty recommended in the next three years, even as it extends the benefits of Medicaid to some 90,000 Minnesotans with incomes below 75 percent of the federal poverty line. The bill is so well-designed that, despite cutting $114 million in the coming fiscal year, it was greeted with applause by lobbyists when it was unveiled on April 29.

In recent days, representatives of the state's hospitals, physicians, nurses and homeless shelters have come to the Capitol to plead to move the state's low-income adults into Medicaid. For the largest among them, Hennepin County Medical Center, tens of millions of dollars and hundreds of jobs are at stake. The GAMC change crafted in March pays providers so poorly that only four hospitals, all in the metro area, have agreed to participate, and then only if the number of people each serves is capped -- something DFL legislators say the new law does not permit. The whole matter could wind up in court.