Pawlenty: State to use own high-risk health insurance pool

WASHINGTON - Gov. Tim Pawlenty, a critic of the new Obama health care legislation, notified administration officials Friday that Minnesota will rely on its own high-risk insurance pool rather than a new federal plan set up to cover people who are unable to buy health insurance in private markets.

Friday was the deadline for states to opt in or out of the federal program.

While the decision has little practical effect for Minnesota patients, it is an echo of the legal fight over federal health mandates, which Pawlenty called an "encroachment upon local control and innovation."

The announcement came as Pawlenty, a 2012 presidential aspirant, addressed delegates at the GOP state convention in Minneapolis.

Questioning the long-term viability of the federal plan, Pawlenty warned U.S. Health and Human Services Secretary Kathleen Sebelius in a letter Friday of "the potential for creating a program and financial obligations for our state that are simply unsustainable."

The program comes with an estimated $68 million in federal subsidies for Minnesota, which already has the largest high-risk pool in the nation. Federal health officials say they will carry out a coverage program even in states that choose to run their own.

Minnesota's version, the Minnesota Comprehensive Health Association, dates to 1976 and covers 27,000 people, but has had chronic financing problems of its own.

Minnesota Democrats in Congress suggested that Pawlenty might be ceding state control over the program, if not federal dollars as well.

"My goal is to help Minnesota to get as much federal support from health reform as possible, especially in this challenging state budget environment," said U.S. Sen. Al Franken. "But ultimately it's up to the state to decide whether they want to negotiate ... to get these funds."

Pawlenty spokesman Bruce Gordon said the $68 million will still be available to pay for Minnesotans' high-risk coverage, but through federal rather than state administration. He cited a recent report from the Centers for Medicare and Medicaid Services saying the $5 billion program could run out of money early.

"For this reason, the governor is unwilling for Minnesota to assume that risk," he said.

Minnesota is the 15th state, including Georgia, Louisiana, Mississippi, Nebraska, Nevada and Wyoming, to opt out of the program.

Congressional Republicans, however, have criticized the program as an expensive unfunded mandate on the states.

Either way, Sebelius told state health officials Thursday, "whether you opt-in to the federal option or you choose the state option, the bottom line for the American people is the same: Uninsured Americans with pre-existing conditions will have access to affordable insurance."