Lawrence Jackson/AP
Minnesota Governor Tim Pawlenty

Minnesota Officials Spar with Feds over Health Care Funding

September 15, 2008 02:27 PM
by Anne Szustek
Legislators in Minnesota are trying to stop a Medicaid program that could axe some 18,000 lower- to middle-income adults from the state’s MinnesotaCare health insurance system.

Minnesota Lawmakers Working to Stop Cuts

Some 18,000 working parents in Minnesota are to lose their Medicaid benefits unless the state’s congressional delegation is successful in negotiating an extension of long-time waivers that expired last month.

Minnesota offers a state-sponsored health insurance program called MinnesotaCare, which expands on U.S. plans by also insuring children and families whose income is just higher than the ceiling for federal benefits.

MinnesotaCare covers some 117,000 people, according to the Minneapolis-St. Paul Star Tribune. Some 30,000 of the program’s enrollees are parents of recipients of funding from the State Children’s Health Insurance Program (SCHIP),  jointly administered by the state and federal government.

The threshold for qualifying for Medicaid coverage is earning between 100 and 200 percent of the federal poverty line, roughly a maximum of $42,408 for a four-person family. MinnesotaCare offers coverage to families earning as much as 275 percent of the poverty line.

Word on the health care cuts, worth as much as $135 million over three years, came within a 29-page document from the Bush administration, which disagrees with the use of covering parents with funds allotted for children’s health programs.

In a bipartisan measure, both Minnesota senators and all eight congressional representatives have penned letters to Health and Human Services Secretary Michael Levitt, urging him to pass the state’s waiver. Democrats Sen. Amy Klobuchar and Rep. Keith Ellison have filed bills to extend the coverage.

They, along with six other Minnesota delegates to Congress—among them Republicans Rep. Jim Ramstad and Sen. Norm Coleman—signed a letter “strongly” requesting that Levitt consider the state’s cause. The two remaining representatives, GOP Reps. Michelle Bachmann and John Kline, the only two Minnesota members of Congress to veto last year an override of Bush’s veto to expand SCHIP, wrote a “milder” letter to the secretary.

The Department of Health and Human Services granted a two-week extension on the cuts, effective September 10. That day, State Sen. Linda Berglin, DFL-Minneapolis, arranged for a hearing to mull a course of action, should the waiver not be extended.

“Having a program that gives families a sense of security and prevents costly trips to the emergency room just makes good moral and economic sense,” Berglin told the St. Paul Pioneer Press.

According to the Pioneer Press, thanks in part to the federal funding overlap, Minnesota has one of the lowest rates of residents lacking health insurance in the United States.

Background: SCHIP legislation, state-funded medical programs

SCHIP’s future after 2009 is uncertain. Democrats in Congress sparred with the White House over a rule requiring states to have at least 95 percent of low-income children eligible for the program before expanding the income eligibility. At the end of last year, President Bush signed a law that authorizes SCHIP through March 2009.

As for Minnesota’s state health care program, in January 2007 Minn. Gov. Tim Pawlenty unveiled a plan for a privatized version of MinnesotaCare in a bid to get more Minnesotans insured. Under the system, some 23,000 people would get medical coverage, 13,000 of them children. The proposal also includes a framework for a Minnesota Health Insurance Exchange that would allow people to buy lower-priced insurance with pre-tax dollars.

U.S. Census Bureau Data speaks to the efficacy of government health programs: some one million more Americans had health insurance in 2007 than in 2006.

In Massachusetts, which has a state-sponsored program offering universal health care, the uninsured rate is 4.7 percent. In contrast, in Texas, which lacks a similar program, more than a quarter of residents are without health insurance.

Opinion & Analysis: Fixing Medicare in Minnesota

If Medicare were to focus on “the best health outcomes for patients as the priority rather than increasing volume,” as Rochester, Minn., newspaper The Post-Bulletin put it, Medicare could save $100 billion over four years, Sen. Amy Klobuchar, D-Minn. said last month, at a bipartisan panel of state and federal-level politicians from Minnesota at the University of Minnesota-Rochester.

The world-famous Mayo Clinic, which is located in Rochester, gets less in Medicare funding for the same treatment, than do health care systems in other states, pointed out Mayo CEO Dr. Denis Cortese. He argued that states that receive less Medicare funding have a better outcome rate. Cortese asked, “If you want better outcomes, better safety, better service, why don’t you pay for it?”

Related Topic: Medicare shying away from some expenditures

As has been the trend across much of the health care insurance sector, Medicare recipients who use higher-priced Tier four medications stand to shell out higher co-pays for their prescriptions. According to a Kaiser Family Foundation study, in 2005 people paid an average of $74 for Tier four drugs, up from $48 a year earlier.

Starting next month in California, Medicare and Medicaid are to cease reimbursements to hospitals for eight types of medical mistakes, including bedsores and objects left inside of patients after surgery.

Most Recent Beyond The Headlines