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Obamacare is here to stay. That is the apparent takeaway from the U.S. Supreme Court ruling last month that largely upheld the 2010 federal health care overhaul.

Health care battles roll on

Commerce Commissioner Mike Rothman says that the state wants to avoid a “one-size-fits-all solution” imposed by bureaucrats in Washington, D.C. (Staff photo: Peter Bartz-Gallagher)

Supreme Court decision won’t quell state fights over exchange, terms of Medicaid expansion

Obamacare is here to stay.

That is the apparent takeaway from the U.S. Supreme Court ruling last month that largely upheld the 2010 federal health care overhaul. The focus will now turn to the state level as preparations intensify ahead of full implementation of the law in 2014.

But in Minnesota, Republican legislative leaders continue to express skepticism that the legislation they derisively refer to as Obamacare is ever going to be fully implemented. Most significantly, some legislators continue to question the need to quickly develop a health care exchange — where individuals and small businesses can purchase coverage from private insurers — as prescribed in the federal legislation. This resistance continues despite strong backing for establishing an exchange from business interests, most notably the Minnesota Chamber of Commerce, and from some more conservative elements, such as Minnesota Citizens Concerned for Life (MCCL), the state’s most prominent pro-life organization.

“The elections in November are going to be very telling on what is going to happen with respect to the exchange,” said Sen. David Hann, chair of the Health and Human Services Committee. “If we get a Congress that is dominated by Republicans, if the president is not re-elected, I can practically predict with certainty that there will be no exchange.”

The Minnesota Department of Commerce, under the authority of an executive order signed by Gov. Mark Dayton, has been moving forward with planning an exchange for more than a year. The agency has set up an 18-member Health Insurance Exchange Advisory Task Force that’s been holding monthly meetings. The state has been awarded $28.4 million in federal grants to design the health care marketplace, and has spent roughly $2 million of that money so far.

On Tuesday, Dayton sent a letter to Health and Human Services Commissioner Kathleen Sebelius reiterating that the state intends to set up an exchange and expects 1.2 million residents to purchase insurance through it by 2016.

Federal deadlines loom

A couple of key deadlines are approaching. By November the state must indicate to federal officials that it intends to create its own exchange in time for the full implementation of the federal health care legislation in 2014. (Dayton’s Tuesday letter does not fulfill that requirement, an administration spokesman confirmed.) Then, in January, the U.S. Department of Health and Human Services will determine whether the state’s planning effort is credible. If it’s found to be lacking, the federal government is expected to impose an exchange of its own.

Commerce Commissioner Mike Rothman says that the state wants to avoid a “one-size-fits-all solution” imposed by bureaucrats in Washington, D.C. “We in the administration… have worked very hard to make progress and to get Minnesota in a position to be able to stay on track to do that,” Rothman said.

But Republican legislative leaders have been sharply critical of the process and have so far failed to take any action to enable implementation of the exchange. They’ve refused to participate in the task force and argue that the Department of Commerce efforts lack public oversight.

“I think the process they have been using is extremely non-transparent,” said Rep. Jim Abeler, chair of the Health and Human Services Finance Committee. “I have no idea what they’re building. There’s been no updates to legislators, even a chair like myself.”

Hann echoes those remarks. Even though the task force meetings are open to the public, he argues that the real decisions are being made behind closed doors. “They have [public] meetings to talk about ideas and concepts,” Hann said. “But they don’t get translated into, all right, here’s the thing that we’re going to ask the Legislature to do. Here’s the mechanism. Here’s the cost. Here’s how it’s going to work, and here’s what the benefit is going to be. Those things are not being talked about. But somebody’s talking about those things. Apparently it’s all being done behind closed doors.”

Rothman takes issue with the GOP criticism. He points out that both Abeler and Hann were asked to join the task force and that all meetings have been fully open to the public. On Tuesday Dayton sent a letter to GOP legislative leaders once again asking them to participate the process. “We have made every effort to be as transparent as possible,” Rothman said. “I’ve offered individually to meet with the legislators. We want to have all perspectives.”

DFL Rep. Joe Atkins, the ranking minority member of the Commerce and Regulatory Reform Committee, is serving on the task force and says the GOP complaints have no merit. “I have never seen a question go unanswered or a document request go unmet,” Atkins said. “Not only are they public, they’re very well attended — except by Republican lawmakers.”

Exchange issue divides Republicans

Last year exchange legislation was introduced in both the House and Senate based on recommendations put together by the task force. In the House it drew bipartisan support, including key GOP legislators like Taxes Chair Greg Davids and Commerce and Regulatory Reform Chair Joe Hoppe.

“I think Obamacare is a scourge upon society and should have been thrown out,” Davids said, of his thinking. “That being said – even though it’s a scourge up on society – it is the law. Since it is the law, I would much rather have the state of Minnesota deal with it than the federal government.”

But the companion bill in the Senate attracted no GOP supporters. Ultimately neither bill made any progress.

That suggests the possibility that legislators will fail to authorize the establishment of an exchange prior to 2014. If that were to happen, it’s an open question whether the executive branch would have the authority to act unilaterally.

Rothman points out that they hope not to test that proposition, but would seek legal advice about their authority were it to come to pass. “We want to work with those recommendations of the task force and be in compliance with the requirements of the federal government,” he said.

But Hann vehemently denies that the Dayton administration can move ahead if the Legislature fails to act and promises that such a move would be challenged legally. “I think to do that is criminal,” Hann said. “What would you say if a commerce commissioner or a governor robbed a bank? Would you say that they ought to be prosecuted for that? It is unconstitutional for the executive branch to write law.”

Abeler also believes that acting unilaterally would be an abuse of executive power, but he doesn’t expect anyone to take legal action to stop it from happening. “What can a governor do if nobody says no?” Abeler asks. “The answer is, a lot.”

The exchange is not the only issue raised by the Supreme Court ruling. Despite largely upholding the law, the court did strike down one key provision of the health care law. Under the legislation, states are required to offer enrollment in Medicaid to all households earning up to 133 percent of the federal poverty threshold (currently $19,090 for a family of three) beginning in 2014, which is expected to add 17 million individuals to the rolls. States would face financial penalties if they fail to implement the Medicaid expansion. But the court ruled that such sanctions are an overreach of federal authority and struck down that provision of the health care law.

That could mean that some states will opt out of the Medicaid expansion, and Republican officials across the country are already expressing intent to do so. Earlier this week, for instance, Texas Gov. Rick Perry sent a letter to Health and Human Services Secretary Kathleen Sebelius vowing not to implement the Medicaid expansion.

The resistance is somewhat surprising, because initially the federal government will pick up 100 percent of the tab for the Medicaid expansion. In ensuing years that scales back to 90 percent, with the states picking up the remainder of the tab. Some Democrats want to expedite the time frame in which the limit for Medicaid eligibility would be increased from 75 percent to 133 percent of the poverty threshold. DFL Rep. Erin Murphy has introduced legislation that would push up the implementation date to the beginning of 2013.

Sen. Tony Lourey, the ranking minority member of the Health and Human Services Committee, points out that the state is likely to save money in the long run because some individuals who are currently on public programs paid for by the state will be shifted to the Medicaid rolls. “It’s quite clear that it is the only choice,” Lourey said. “The people of Minnesota need this expansion and our budget will be greatly enhanced.”

But Abeler, Hann and other Republican legislators question whether the federal government will – or can – make good on that promise. Abeler cities a book by Harvey Mackay — “Beware the Naked Man Who Offers You His Shirt” — to drive home the point. “I’m afraid they’re making promises they can’t keep,” Abeler said. “They are so broke in Washington. This is a massive, massive cost.”

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