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On September 1, Minnesota officially missed the deadline to seek $1 million in federal dollars to help plan for the creation of a "health insurance exchange." Gov. Tim Pawlenty's decision to forego the federal dollars seemed curious for several reasons.

Pawlenty v. ‘Obamacare’: It’s not about the money

Peter Bartz-Gallagher)

Tim Pawlenty’s national PAC was quick to tout his anti-'Obamacare' executive order. (File photo: Peter Bartz-Gallagher)

Pawlenty’s hard line on federal health care has little financial impact

On September 1, Minnesota officially missed the deadline to seek $1 million in federal dollars to help plan for the creation of a “health insurance exchange.” Under the federal health care bill, states are expected to establish markets where consumers can shop for the best deal on insurance coverage.

Gov. Tim Pawlenty’s decision to forego the federal dollars seemed curious for several reasons. Just two years ago, for instance, the governor’s own Health Care Transformation Task Force recommended establishing a health care exchange in order to bolster market competition. In addition, Minnesota statute explicitly directs state agencies to apply for federal funds available to help with planning such an endeavor. And two days before the deadline for applying, the Minnesota Chamber of Commerce – ordinarily a staunch Republican ally – sent Pawlenty a letter urging him to take advantage of the $1 million.

“Due to the significant possible impact of an exchange on thousands of Minnesota businesses, including our members,” wrote David Olson, the chamber’s president, “I respectfully request that Minnesota submit a grant application.”

But Pawlenty refused to budge. The deadline passed without the state filing an application. The $1 million is likely lost.

The decision infuriated Democrats. “Practically every other state is applying for that, even those that are suing the president,” said Rep.  Thomas Huntley, DFL-Duluth, chair of the Health Care and Human Services Finance Division. “They’re still accepting the money when they can get it.”

Furthermore DFLers believe that Pawlenty may be violating state law by refusing to apply for the funds as directed in statute. “I think the only recourse we have is legal recourse,” said Rep. Erin Murphy, DFL-St. Paul, “which we have seen all too much of, from my perspective, with this governor.” There are, however, no plans at present to file a lawsuit against the governor – in part because there’s no apparent remedy for missing the federal deadline.

It’s not the only pot of health care money that Pawlenty has left on the table recently. Last month he refused to sign off on an application that would have brought in $1 million to regulate health insurance providers. Pawlenty also declined to seek $850,000 for comprehensive sex education in schools. Instead he opted to apply for roughly $500,000 in abstinence-only dollars, even though the state would be on the hook for $379,000 in matching funds.

Pawlenty further hardened his line on the federal health care reform bill this week by signing an executive order barring state agencies from applying for grant money available through the legislation. The edict derided the federal law as a “dramatic attempt to assert federal command and control over this country’s health care system.”

Democrats decry the saber-rattling as further proof that Pawlenty no longer has the best interests of the state foremost in mind.  “The guy’s running for president,” said Huntley. “He doesn’t give a damn about Minnesota.”

“[Pawlenty] is trying to speak to future voters in other states,” added Murphy. “He’s trying to speak to the far right part of the electorate to try and gain some recognition there.”

The rancorous health care debate could indeed prove a rich political vein for Pawlenty to mine. That’s in part because former Massachusetts Gov. Mitt Romney – whom most pundits view as the early frontrunner in the 2012 GOP presidential sweepstakes – can’t credibly exploit conservative anger over the issue because he signed similar legislation while in office. The day after Pawlenty issued the order prohibiting state agencies from applying for grants available under the federal health care bill, his Freedom First PAC sent out a fundraising letter to supporters highlighting the development.  The governor’s hard-line stance drew national attention from news outlets such as MSNBC and The Wall Street Journal.

But for all of the governor’s chest-pounding about “Obamacare,” his  actions are likely to have very little effect on how much federal health care money Minnesota ultimately receives. On the same day that Pawlenty signed the executive order, he indicated that he’s likely to grudgingly sign up for $263 million in federal Medicaid funds that were recently appropriated by Congress.

“We’ll likely take that money,” Pawlenty told the Star Tribune. “It’s not Obamacare; it is something that we were going to be doing anyhow.”

The most substantial financial decision related to the health care reform bill is whether to significantly expand Medicaid eligibility prior to the full implementation of the federal legislation in 2014. Minnesota could tap into $1.4 billion in additional funds by doing so, but would be on the hook for a state match of roughly $200 million. Pawlenty has steadfastly refused to consider early enrollment. In four months, though, that decision will be in the hands of the next governor.

While Democrats are smarting over the decision to pass up the $1 million in planning dollars for a health insurance exchange, they’re not giving up entirely on tapping into some federal assistance. They hope that there might be another round of grants down the road. “There may be opportunities in the future that we can explore,” said Murphy, “but that’s not at all clear to me right now.”

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