Balancing Act

The state budget is reportedly at a surplus. So why is Tim Pawlenty still raiding health care funds?

As governor, Tim Pawlenty's reflexive response to the chronic budget deficits his polices have wrought has been to toss people off the rolls of the state-supported health care plans. Literally tens of thousands of Minnesotans have had their medical safety net severed for the sake of stanching the state's constant flow of red ink.

When he first starting whacking away at the health insurance eligibility rolls in 2003, Pawlenty exhibited faux contrition, saying with a shake of his head and a purse of his lips that it was a dirty business—but that everyone had to share the pain to surmount $4 billion in state debt. As time went on, however, different tactics were required.

Pawlenty's draining of the surplus in the Health Care Access Fund automatically triggered an increase in the tax on health care providers to replenish it. The governor has deployed this source of income as if it were a slush fund, proposing to raid the dedicated monies in the health care fund to help him balance the general fund without breaking his no-taxes pledge.

Berglin on Pawlenty: "The governor wants to ignore the fact that he threw [people cut from state-supported health insurance] over a cliff"
Craig Lassig
Berglin on Pawlenty: "The governor wants to ignore the fact that he threw [people cut from state-supported health insurance] over a cliff"

Pawlenty's dilemma was how to justify throwing people off state-supported health care even as he was shifting dollars specifically earmarked for health care to pay for other obligations. The Health Care Access Fund is dedicated to the MinnesotaCare program, which helps insure single adults earning up to 175 percent of the poverty level (approximately $17,000) and families earning up to 275 percent. Nearly all are employed. But Pawlenty's solution was to cast aspersion on these enrollees by referring to the state-supported plans as "welfare health care."

This year, if you believe the headlines and choose to ignore the impact of inflation, the state is running a budget surplus for the first time since Pawlenty's election. For once, he doesn't need to raid the Health Care Access Fund to make ends meet. Indeed, with an anticipated surplus of $116 million in the fund this year, Pawlenty could restore health insurance coverage for some of the thousands cut from the MinnesotaCare program.

That is what a Senate bill, authored by MnCare co-founder Linda Berglin (DFL-Minneapolis), would accomplish. Berglin's bill also proposes to restore some of the health care benefits for MnCare enrollees that were cut in 2003, as well as do things like enable small businesses that haven't been able to insure their workers to partner with MnCare for coverage, and waive MnCare premium payments for a year for the families of all Minnesota military personnel returning from active duty. All of this would be achieved by using the Health Care Access Fund strictly as it was originally intended. No tax increases are required.

Pawlenty's proposed budget would do none of these things. Instead, he asks that the access fund be raided to the tune of $31 million to help the state prepare for bird flu, $18 million for a biosciences project at the University of Minnesota, and $12 million for updating electronic record-keeping. While there are more noble components to his siphoning than in previous budgets, including a comprehensive reform of the state's mental health system, precious few of those dollars directly enhance the MinnesotaCare program for which the Health Care Access Fund dollars are explicitly dedicated. Most significantly, they do not bother to restore benefits or eligibility to any of the people cut from the MnCare rolls during his tenure.

"That is what is most shocking," Berglin says, noting that even with the state showing a general fund budget surplus, "the governor wants to ignore the fact that he threw those people over a cliff when times were tight."

And where those uninsured landed continues to have ramifications. To choose just one example, La Clinica en Lake, one of 21 community clinics operated by the St. Paul-based West Side Community Health Services, is in danger of closing due to the enormous expenses it incurs serving the uninsured. Executive Director Mavis Brehm reports that the number of uninsured served by West Side's clinics has risen from 46 percent of its total clientele in 2001 to 52 percent last year. As a health care provider, West Side is among those paying the taxes that replenish the Health Care Access Fund.

In fact, a change enacted during the Pawlenty administration levied a tax on each Medicaid patient visit, causing West Side's annual tax payments to skyrocket from $30,000 to $100,000 a year. Even though the state has now fixed that glitch with compensatory payments through its Medicaid program, West Side is still paying a hefty tax.

Berglin's bill proposes to allocate $1.5 million in surplus to benefit community clinics like La Clinica, as well as restore benefits for immigrant children and nonimmigrant adults, while Pawlenty wants to take the money West Side is paying and use it for bird flu and biosciences. If La Clinica closes, the 5,200 people it served last year will have to find a new source for their health care.

Aside from Berglin, professionals in the medical community are taking note and speaking up. "Since taking office, your administration has advanced legislative proposals that have siphoned money away from the Health Care Access Fund or that have shifted new costs onto the Health Care Access Fund to the tune of over $400 million," wrote Dr. David Luehr, president of the 10,000-member Minnesota Medical Association, after Pawlenty's budget proposals for the 2006 session.

"Yet the draining of funds continues," Luehr concluded. "It is the sense of the MMA that the original intent and integrity of this fund, which is supported by the provider tax, gross premium tax, and enrollee premiums, has been violated."

 
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