T-Paw, Heal Thyself

Shifting political winds push children without medical coverage into Pawlenty's arms

When Minnesota Gov. Tim Pawlenty surveyed the political landscape after last month's elections and found himself practically the only prominent statewide Republican still breathing, he decided it was time to embrace the notion that every Minnesota child should be provided with health insurance. Pawlenty's eye-opening announcement, at a Minneapolis health care forum exactly a week after Election Day, was no mere flip-flop. While the ultimate shape of the gov's gambit remains very much up in the air, he hopes to stick his landing smack dab in the political center sometime around the close of the legislative session this spring.

During his first four years in office, Pawlenty earned notoriety for consistently trying to raid the health care access fund (a pool of money amassed from taxes on Minnesota health providers, specifically designed to provide health insurance to the working poor under MinnesotaCare) to cover shortfalls in the state's general fund. In all, he managed to siphon a whopping $530 million in health care access fund dollars for general fund usage since 2002, and would have taken much more were it not for staunch opposition by DFL legislators. That's certainly one reason why, according to the Children's Defense Fund Minnesota, the number of uninsured children under the age of six jumped nearly 15 percent from 2001-04.

Sobered by the elections, and by the runaway growth in both health care costs and the number of uninsured in recent years, Pawlenty at least wants to use the entire health care access fund for health care this time around. But nobody thinks that money alone will be sufficient to insure every Minnesota child, and potential solutions to making up the difference promise to be a lot more complex and contentious than the current bipartisan happy talk would indicate.

Let's get specific. Last week's economic forecast by the Minnesota Department of Finance showed an existing surplus of $125 million in the health care access fund, which is expected to grow by another $188 million in time for the 2008-09 biennial budget that will be set during the next session. But CDF Minnesota estimates it will cost an extra $200 million per year over current expenditures to insure all the children in the state—and that's if the federal government picks up half the tab. As for the much-ballyhooed $2 billion general fund surplus, its sustainable sources of revenue are almost entirely eaten by inflation, making it an illusory, stopgap "solution."

Pawlenty and his advisers are currently shying away from cost estimates, because they are trying to quantify how much they can lower the price by making the system more efficient. For example, Pawlenty spokesperson Brian McClung cites a Minnesota Department of Health estimate that $150 million a year can be saved through Pawlenty's QCare initiative—which offers incentives to health care providers giving the best bang for the buck in such standardized areas of care as diabetes, preventative care, and cardiac care—but it will obviously take time to attain (or prove it can't attain) those savings. There will be plenty of number crunching but also a little voodoo involved in whatever Pawlenty proposes for health care in his January 23 budget address.

"There are 73,000 kids currently uninsured and about 60 percent are eligible for current public programs. Some might argue, just do that; get the outreach right and overcome the cultural barriers," says acting commissioner of human services Cal Ludeman, Pawlenty's point person on health care, who neglects to mention that Pawlenty cut funding for health insurance outreach in his previous budgets. "We are arguing no, that approach doesn't do reform as much as the governor wants, and it also doesn't capture the private sector participation in a good, sustainable way."

As the Star Tribune noted in a front-page story last Sunday, a number of states have embarked on an array of health care reforms. Some, such as standardizing codes across the health care system, have genuine potential to reduce costs. But there are also ways to do "reform" that screw the consumer. For example, Massachusetts is getting a lot of positive press for offering universal health care coverage, but residents there may be in for a big surprise: Small businesses can opt out of insuring their employees by paying the state a measly $280 per year, yet come July, citizens face a fine if they don't carry health insurance.

Few people can spot the potential devils in those health care system details better than Linda Berglin, chair of the Senate Health and Human Services budget committee. Along with fretting about all the mischief that can be perpetrated under the guise of reform, Berglin is concerned that the laudable push to insure all children will freeze out working-poor adults, many of whom were cut off MnCare over the past four years and haven't been reinstated. "I have a woman in my district who paid [MnCare] premiums for 15 years and had her benefits cut. Now she needs her knees replaced and they won't do it because she isn't eligible for physical therapy," Berglin says. "We need to take care of the older, 50-plus people working in low-wage jobs; those are the ones ending up in emergency rooms with undiagnosed diabetes, or a heart attack, or need kidney dialysis, and they drive up the uncompensated care costs [estimated at $250 million a year] much more than children. And they are the ones working jobs in our economy."

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