Minn. continues with health care overhaul

Published 9:42 am Friday, June 29, 2012

ST. PAUL — Minnesota Gov. Mark Dayton bet big on the federal health care overhaul, drawing federal money to expand Medicaid early and preparing for the day when the full law takes effect.

The Democratic governor’s wager paid off Thursday when the U.S. Supreme Court upheld the law, putting Minnesota ahead of states that waited to see whether the court would strike it down. The ruling has no practical effect on state efforts to develop an online health insurance marketplace under the law’s parameters or the preparations for a bigger Medicaid expansion in 2014. It also leaves intact Dayton’s 2011 push to extend Medicaid to 84,000 adults with annual incomes below $8,400.

“Today’s ruling will be met with relief by the Minnesotans whose lives have already been improved by this law,” Dayton said in a statement.

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Human Services Commissioner Lucinda Jesson said the ruling brings clarity to state efforts to put the federal overhaul in place, even though Republicans from presidential candidate Mitt Romney on down are making its repeal a centerpiece of their election campaigns. Jesson is leading a task force preparing recommendations on the upcoming Medicaid expansion, with the federal government picking up the full $1.45 billion cost in 2014 and 2015 for Minnesota adults who make roughly $15,000 a year or less. Starting in 2016, the state will have to pay 10 percent of the Medicaid cost.

“I don’t think it changes anything in Minnesota,” Jesson said, adding, “I don’t see any roadblocks.”

Slightly less than 10 percent of Minnesota’s population lacks health insurance, or almost 500,000 people. The state Human Services Department predicts the overhaul will result in coverage for 290,000 uninsured residents through the Medicaid expansion and subsidized insurance available through the health insurance marketplace being developed. An additional 210,000 will remain uninsured without further changes.

In Washington, Rep. John Kline, R-Minn., warned that Dayton’s administration is premature to move ahead with the Medicaid expansion because the law’s future remains murky.

“They’re going to get ahead of themselves because it’s still bad law,” said Kline, a five-term representative who expects the issue to play in his race against Democrat Mike Obermueller.

Kline added: “One of the many weaknesses of the law is that it expanded Medicaid so much.”

Sen. David Hann, the Minnesota Senate’s top Republican on health issues, said the decision appears to leave the state on its present course despite objections from him and his Republican legislative colleagues. The court removed a penalty for states that don’t expand Medicaid programs, but Dayton has already embraced that goal.

“It’s a moot point for Minnesota since we’ve already elected to do that,” said Hann, R-Eden Prairie. “As long as we have Governor Dayton that’s not going to change.”

Right now, the federal government and the state of Minnesota split the cost of the federal-state Medicaid program, which goes by the name Medical Assistance in the state. The annual cost of covering the 84,000 poor adults Dayton switched into the program is $800 million.

The Governor’s Health Reform Task Force Jesson heads is working to make recommendations to Dayton and the Legislature by Dec. 1, with preliminary recommendations coming earlier. Jesson said the group is looking at whether the state should create a basic health plan for single adults who otherwise would be required to buy subsidized coverage themselves through the state health insurance exchange. The panel is also addressing what happens to a group of adults now on the state’s MinnesotaCare health program when they become eligible for expanded Medicaid.

Some of those decisions will ultimately require agreement between the Legislature, currently controlled by Republicans, and Dayton, the state’s first Democratic governor in two decades.

All 201 legislative seats are also on the November ballot, but Dayton is only halfway through his first term.