Health reform costs unclear

House Democrats are optimistic about a federal option to enroll more low-income Minnesotans in Medicaid, an idea that may not sit well with the governor.

Minnesota is one of 11 states that may expand participation in Medicaid to certain childless adults beginning this year, a provision that is included in the federal health care reform law. This so-called “early option” is available to certain states prior to 2014, when Medicaid will cover adults with incomes up to 133 percent of federal poverty guidelines.

In response, Rep. Thomas Huntley (DFL-Duluth) sponsors HF3713, which would allow Minnesota to participate in the early option. Because the expanded version of Medicaid would apply to people enrolled in General Assistance Medical Care, Huntley’s bill would repeal the revised GAMC program signed into law by Gov. Tim Pawlenty less than a month ago.

At a press conference April 14, Huntley said his bill would result in health care providers being paid 20 percent more than they were under the original GAMC program. Also, the legislation would not add to the projected deficit in the Health Care Access Fund, which helps low-income workers purchase health insurance.

“The Medicaid expansion is a much more fruitful opportunity for the state,” said Rep. Erin Murphy (DFL-St. Paul). She and others working on the GAMC issue earlier in the session did so not knowing the outcome of the federal legislation.

Participation in the early option would also come with a cost. Minnesota would need to match the $1 billion in federal funds it would receive over the next three years. Pawlenty spokesperson Brian McClung said a preliminary fiscal note released by the Department of Human Services this week does not account for the full cost to the state.

“There’s a significant math problem with this proposal,” he said, adding the fiscal note still needs to be vetted by Minnesota Management & Budget.

McClung urged legislators to allow the revised GAMC program to play out; the major provisions in that law will not begin until June 1. Democrats countered that GAMC is flawed to the point where hospitals in Greater Minnesota probably won’t participate.

The House Health Care and Human Services Finance Division was scheduled to discuss the bill’s fiscal implications April 15.