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DFLers and Republicans are heading into the legislative session with differing ideas about how to provide health care to people who relied on the General Assistance Medical Care (GAMC) program axed last year by Gov. Tim Pawlenty.

Both parties struggle toward GAMC fix

Peter Bartz-Gallagher)

GOP Rep. Matt Dean on his MinnesotaCare option: “This says GAMC goes away. Theirs says GAMC stays.” (Staff file photo: Peter Bartz-Gallagher)

GOP pitch would fold it into MinnesotaCare permanently

DFLers and Republicans are heading into the legislative session with differing ideas about how to provide health care to people who relied on the General Assistance Medical Care (GAMC) program axed last year by Gov. Tim Pawlenty.

DFLers have been crafting a proposal that would restore GAMC, which served indigent single adults, most of whom have mental health or addiction problems. But the main political impetus for picking up where GAMC left off is that the program was also a critical source of revenue for regional and safety-net hospitals around the state that would otherwise receive no compensation for indigent care they’re required by law to provide.

Rep. Matt Dean, R-Dellwood, the lead Republican on the House Health Care and Human Services Finance Division, is working on a proposal that would shift GAMC recipients onto the MinnesotaCare program for low-income working Minnesotans.

“This says GAMC goes away,” Dean said of his plan. “Theirs says GAMC stays.”

GAMC, which was created by state lawmakers in 1975, provides health coverage to about 30,000 adults without children who have incomes below 75 percent of the federal poverty level.

Both Dean and Rep. Erin Murphy, DFL-St. Paul, a key mover in DFL efforts to restore some version of GAMC, are eyeing changes that would help coordinate care for people who used GAMC. But their ideas for funding the effort are far apart. DFLers, so far at least, want to increase a provider surcharge on hospitals to leverage more federal dollars; Dean would draw funding from dedicated MinnesotaCare revenues and put counties in charge of overseeing patient care.

But the Board of Trustees of the state’s largest physicians lobbying group said that they don’t like either the GOP or DFL ideas.

“Neither the governor’s plan nor the DFL’s plan addresses one of the most fundamental problems with our health care safety net programs – the need for adequate and reasonable funding. The state’s trend of requiring physicians and other providers to absorb the cost of maintaining these programs isn’t sustainable and will result in clinics having to close their doors,” said Benjamin Whitten, president of the Minnesota Medical Association.

Because the program will run out of money in March, the issue is expected to be dealt with in the early days of the 2010 legislative session that begins Thursday.

But lawmakers recently learned that they won’t have to act as quickly as previously thought. That’s because the state Department of Human Services (DHS) now believes GAMC enrollees will be able to stay on the program until the end of March. GAMC had been scheduled to run out of money on March 1. But lower costs and fewer new enrollees than expected mean the program will run a little longer, said DHS Commissioner Cal Ludeman.

When the funding runs out, Ludeman said 28,000 GAMC recipients will still move to MinnesotaCare.

The Senate Health and Human Services Budget Division and the Senate Health, Housing and Family Security Committees are scheduled to hold a joint hearing on GAMC on Wednesday. On Thursday, the House Health and Human Services Policy and Oversight Committee plans to hear an Erin Murphy bill that modifies the existing GAMC program, which remains in statute despite being defunded.

At the Capitol, meanwhile, Murphy and other legislators have tweaked their GAMC restoration plan since it was first unveiled in December.

Under the current DFL proposal, a surcharge would be applied to the Medicaid revenues that hospitals receive, according to Senate Health Care and Human Services Budget Division Linda Berglin, DFL-Minneapolis. The hospitals would then get reimbursements based on Medicaid rates. The proposal funds GAMC for a 16-month period without a tax increase, Berglin said.

“I think most people understand that we don’t have a lot of options,” Berglin said. “It’s a way of drawing federal money into the state that we don’t have now.”

At Wednesday’s hearing, the Senate will provide information about the intricacies of the plan. One of the issues, Berglin said, is that the surcharge would affect hospitals in different ways. Hospitals that don’t provide as many Medicaid services as other facilities would have a harder time offsetting the revenue surcharge.

“People need to understand it’s not the most user-friendly funding mechanism,” Berglin said.

Murphy also noted the complexity of trying to reach a formula that would serve the state’s hospitals equitably. But she said that the surcharge approach has its merits.

“One of the good things about the surcharge from a policy perspective is that it is pretty blind to geography and [political] party. But it’s not very flexible,” Murphy said.

But Dean questions whether GAMC should continue at all.

GAMC’s costs have been growing at an unsustainable rate. The significant and costly health demands of people in GAMC might be better handled in MinnesotaCare, he said.

Dean’s proposal, which is based on Pawlenty’s proposal from last year, would place the responsibility on counties to coordinate patient care. The counties, rather than individual patients, would receive funding from the state. The counties would provide coordinated care overseen by a health official. That style of care is also known as a medical home.

Dean said health care costs might be controlled better in MinnesotaCare rather than GAMC, which doesn’t have caps on hospitalization. Dean notes that GAMC costs have been rising due to cost increases in certain practice areas, and not because of any growth in the number of enrollees.

“In the end I believe the counties would save money,” Dean said.

The GOP and DFL approaches are paid for in different ways. Murphy and Berglin’s proposal uses the Medicaid surcharge. Dean’s proposal would draw on the Health Care Access Fund (HCAF), which is built up by receipts from the state tax on health care providers that pays for part of MinnesotaCare.

Murphy noted that shifting people from GAMC to MinnesotaCare would exhaust the HCAF. The proposal would then need $160 million from another source, she said.

Dean said that the additional month’s cushion in GAMC funds will make it easier for lawmakers to reach an agreement once session starts.

“Moving the deadline helps things, because it takes the pressure off,” Dean said.

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