Health insurance reform might hurt Minnesota

While changes to Medicare won’t benefit the state, Medicaid coverage might improve.

As Congress works on reforming health care, letters and phone calls from Minnesota hospitals, lawmakers and citizens have flooded Washington, because these stakeholders know the state has a lot to lose. Minnesota has one of the highest rates of health-insured citizens in the nation âÄî 91.7 percent according to the most recent U.S. Census Bureau data from 2007 âÄî and that could be a problem. Some Minnesota politicians and health care providers, including Gov. Tim Pawlenty and the Mayo Clinic, said if health reform was based on cutting costs in Medicare reimbursements from the government instead of paying for quality, Minnesota would not benefit. âÄúMinnesota gets short changed in it. Our reimbursement rates from Medicare are less than other states,âÄù said Sen. John Marty, DFL-Roseville, chair of the Senate Health Policy Committee . He said past provisions of health care, good education and a clean environment contributed to the stateâÄôs health. Sen. Linda Berglin, DFL-Minneapolis, who authored Minnesota Care, a Department of Health-administered program that helps subsidize health care for some Minnesotans, said cost-sharing ideas need to be geared toward states like Minnesota, with low reimbursements. âÄúItâÄôs not fair for states to start out, you know, [with] almost with two plates of mashed potatoes in front of them, then theyâÄôre asked to reduce, and we have a small luncheon plate,âÄù Berglin said. The Obama administrationâÄôs reform proposal would reign in the annual health expenditure of approximately $2.5 trillion through measures like taxing the wealthy and restructuring Medicare and Medicaid. As the House and Senate work to draft their own versions of a bill, staffers have been taking calls from experts like Stephen Parente, an associate professor in the Carlson School of ManagementâÄôs Department of Finance, who has been consulting with Congress on the cost aspect of health care. He discussed concerns with the planâÄôs price tag and possible compromises or cost cuts. Parente said Mayo Clinic and 12 other clinics wrote a letter to Congress in which âÄúthey more or less implied weâÄôll go out of business, weâÄôre in trouble,âÄù if the public plan is passed with reimbursement at 5 to 10 percent above Medicare levels. When the state cuts back on hospitals at a time when they are already struggling, âÄúitâÄôs not a good way to run a health system,âÄù Marty said. âÄúThe reimbursement system needs to be changed in a manner that rewards quality rather than quantity,âÄù Jane Jacobs of Mayo ClinicâÄôs Health Care Policy Center said. She said the physicians at Mayo are salaried, so their work is not based on âÄúthe more you do, the more you make.âÄù The idea that universal coverage can be achieved by changing to a quality-based care and rearranging pre-existing funds in the health care system was disputed by Roger Feldman, a Blue Cross professor of health insurance at the University of Minnesota . âÄúMoney will need to come from reductions in Medicare payments or increases in taxes. There is simply no two ways around it,âÄù Feldman said. Minnesotans might have more luck with Medicaid, which, unlike Medicare, is state funded. âÄúThere would be more people who are eligible for Medicaid in Minnesota today who actually would be enrolled in the program and would be then getting good primary preventive care,âÄù Berglin said. However, Feldman asked, âÄúin Minnesota we already have a generous Medicaid program, so do we get that subsidy?âÄù He said he was optimistic that Minnesota would be fortunate, and because we already had low rates we would see Medicaid coverage faster. He said the future of health insurance for students just graduating from college âÄúwould be great âĦ the only thing is theyâÄôre going to have to wait a couple of years; itâÄôs not going to take affect for a while.âÄù Feldman said it would be great because these graduates, who often have low incomes, will have the opportunity to buy coverage at a subsidized price. Meanwhile, at the University of Minnesota, health care is mandated and universal. Fee-paying students are required to have health insurance. Many possess private insurance, but Boynton Health Center Director Ed Ehlinger estimated that 14,000 students are covered by one of the three University associated health care plans. Ehlinger said with health care reform âÄúitâÄôs the public option, whether it exists or not, and the quality of that public option could have major impact on University students.âÄù He said if the option is set up well, âÄúit would be likely that many students who are currently on their parents plan, or on some other plan that is not meeting their needs as well as they would like, would shift.âÄù If reform was passed without a public option it would have minimal difference on students. The health care reform bills, which were originally intended for completion by July 31 , will now be delayed for at least several months.