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Bills have divergent health and human services visions

There are a few similarities between the House and Senate health and human services bills. Both, for example, want to set aside at nearly $95 million for the Northstar Care program, a new measure meant to improve child foster care. Both bills would boost psychiatric facility care to the tune of $9.8 million in the next budget, and $23.7 million in the “tails” budget for 2017-18.

Aside from the handful of line items in common, the two bills may as well have been written for different states. The bills’ wildly divergent conditions stem partly from the budget targets set by their respective caucuses, with the Senate looking to spend $343 million in surplus funds and the House trying to find more than $500 million in savings. But even in policy, as House Republicans look to eliminate MinnesotaCare and abolish the MNsure health insurance exchange, the two majority caucuses have set a course that will require many hours to reconcile their differences.

Both proposals were debated, testified for or against and passed early this week. The Senate took a faster course than the House, introducing and amending its bill in just two days, nearly catching up with the House companion, which passed a committee vote after a grueling Monday hearing that lasted close to seven hours.

While the House file from Rep. Matt Dean, R-Dellwood, would make quick, lasting changes like eliminating existing insurance, the bill authored by Sen. Tony Lourey, DFL-Kerrick, would take a slower, more deliberate approach to health care spending. Lourey’s bill calls for the creation of a task force to study and make recommendations on funding for MNsure and MinnesotaCare; the House bill could see both programs phased out before the next budget term expires.

Lourey’s bill essentially doubles down on MNsure, establishing a steering committee to oversee shared eligibility, and advisory committees to guide state policy for individual consumers and small businesses; the Senate bill would also turn MNsure into a state agency, with a single commissioner and a budget subject to legislative approval.

That’s not nearly enough for the exchange’s critics, including Sen. Michele Benson, R-Ham Lake, who offered an amendment on Tuesday evening to block the exchange from becoming a state agency.

“Without a fundamental change to the way MNsure operates, the culture’s not going to change, and the financial underpinnings are not going to change,” she said.

Acknowledging the majority votes aligned against her amendment, Benson eventually withdrew the proposal, but asked Lourey to consider alternative fixes to the exchange.

Lourey’s bill received a generally positive review from hearing attendees, and a slew of health care lobbyists testified to thank the committee for making room for their provisions. Lawrence Massa, president of the Minnesota Hospital Association, applauded the Senate for its “realistic spending target,” and for preserving MinnesotaCare, which, he testified, “continues to provide meaningful coverage without high premiums.”

The proposal to switch MinnesotaCare enrollees to private programs has “many more negatives than positives,” according to Jim Schowalter, president of the Minnesota Council of Health Plans, the powerhouse interest group that represents the state’s seven major nonprofit insurers. Schowalter said as much during the House Health and Human Services Finance Committee hearing on Dean’s omnibus bill, and explained that insurers were seeking stability, and guaranteed funding, while the replacement program appears complex and is “not well understood.”

Schowalter also lamented proposed cuts of $100 million targeted at administrative costs for the insurance companies. Those expenses totaled about $375 million during last year, he said, and the result of a nine-figure decrease could mean layoffs and less support for enrollees.

Even less supportive was Department of Human Services Commissioner Lucinda Jesson, who questioned the House bill’s assumptions of cost-savings. The bill relies on an estimate of some $300 million that would be realized in catching and preventing fraud and misuses of public health and insurance programs. Jesson said DHS estimates of a somewhat narrower effort to crack down on misspent money came to just $18 million.

In total, the bill relies upon more than a half-billion dollars in savings or cuts, and Jesson guessed the committee had taken that path rather than direct cuts to services.

“We do not believe that savings to that extent can be realized, and certainly not under our current contracting,” Jesson said.

Dean, for his part, acknowledged that the bill amounts to an “incredibly big lift” for insurers, and, citing budget constraints under the caucus target, continually came back to difficulties with the insurance exchange to justify his approach.

“I think everyone’s under the understanding that this is not sustainable,” he said.

The committee approval sends both the Senate and House bills on to their final finance hearings later this week, and Lourey said he hopes to have the Senate bill on the upper chamber floor by Friday.

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