After many months of negotiation and debate, we were successful in negotiating an agreement that maintains health care coverage for current GAMC enrollees. However, there are significant problems with the compromise agreement. With the passage of the federal health care reform bill, we have the opportunity to provide comprehensive, statewide coverage to very low-income Minnesotans through an early opt-into Medical Assistance (MA). The compromise law on GAMC is a critical bridge to a better option.
Our first legislative solution, Senate File 2168, was undoubtedly the most fiscally-responsible means of restoring health care coverage to GAMC recipients, while still instituting system reforms and cost-cutting measures. Although Governor Pawlenty’s proposal to auto-enroll GAMC enrollees into Minnesota Care would have been more expensive and would have imposed additional costs and coverage caps on a population that earns less than $8,000 per year, he vetoed our bill. Our attempt to override did not garner any Republican support, even though the vast majority of them had voted for the bill.
The compromise legislation, enacted just before GAMC disenrollment commenced, preserves health care and prescription drug coverage for the GAMC population and protects the Health Care Access Fund (HCAF) for MinnesotaCare recipients. The compromise maintained the GAMC program in its current form until June 1st, at which time the program will operate by providing lump sum payments to hospitals. The hospitals will then use a managed care approach to form Coordinating Care Organizations (CCOs) to provide services to GAMC patients. Drug coverage is maintained as a fee for service—a critical component for GAMC recipients, many of who are mentally ill or suffer from chronic diseases.
While the new agreement maintains the safety net, it does come with very high expectations for hospitals, which are being asked to continue providing care despite decreased reimbursement. Initially, all but one hospital declined to become CCOs, and it was only after the Department of Human Services “reinterpreted” the new law to limit the number of patients each hospital would have to take that three additional metro-area hospitals agreed to sign on.
In the final budget agreement, we successfully negotiated the inclusion of rural hospitals in the terms established by DHS and provided an additional $10 million to their uncompensated care pool, bringing that total to $30 million for reimbursement for care provided in hospitals that do not become CCOs.
Even for the short-term, the revised GAMC program is barely sustainable. Hospitals are being asked to provide care, with less money, and enrollees have to navigate a system that asks large hospitals to coordinate their much-needed preventive care. The rudimentary reforms in GAMC will be hampered by under funding and geographic disparity.
I am monitoring closely implementation of the revised GAMC program and will be visiting providers and enrollees in Greater Minnesota to best understand the issues with implementation. Early reports suggest the concerns my colleagues and I shared with the administration prior to final passage are being realized and we will continue to pursue the transfer of GAMC patients into early MA.
A far superior option is available to us as a result of the passage of the federal health care reform bill. Because Minnesota provides coverage for very low income Minnesotans with state funds, we are one of 11 states able to transfer enrollees into Medical Assistance and earn federal matching funds.
Early MA provides stability for those getting care and predictability for providers. Most importantly, it provides us with an important opportunity to bring broad system reforms to improve care and reduce costs for everyone. Foregoing this opportunity would be a strategic failure.
We fought hard to include the early MA opt-in in the final budget agreement and it will be established in state law beginning on July 1, 2010. This option is fully funded in the budget signed by Governor Pawlenty. The Governor can now opt in by signing an executive order beginning on July 1, 2010.
By opting into early MA, a decision for Governor Pawlenty or his successor before January 15, 2011, Minnesota will earn federal matching funds. The early MA option is paid for with $1.4 billion in federal funding that is leveraged by $188 million in state dollars – a $7 to $1 ratio. After three years, the state share will disappear entirely and the federal government will pay 100 percent of the cost of coverage.
Reducing the ranks of the uninsured is a cost saver for insured Minnesota families as it eliminates the “hidden tax”, paid in the form of higher premiums to cover uncompensated care. The benefit of the state spending in this area is will create 22,000 jobs, generate $2.7 billion in business activity, and produce $984 million in salaries and wages.
With the passage of federal health insurance reform in April, I know that the GAMC compromise will have a short but important role in Minnesota. I support the early MA, along with many advocacy groups and provider organizations. I hope that you will join me in urging our current, or future, Governor to adopt this measure.
Posted on Tuesday, June 8, 2010 by Erin Murphy,