Legislative Update: 1/21/11


Peds Day at the Capitol Set for February 15

Building relationships with elected officials has never been more important.  With a state budget deficit of $6.2 billion and 60 new legislators, communicating with those who will be making the decisions at the Legislature is critical to promoting children’s health and well being. The MN-AAP’s annual “Day at the Capitol” is a terrific way to do just that.  We’ve invited key legislators and opinion makers to address the group and we’ll arrange for you to meet with your own legislators, too. This is a terrific way to add your voice to the MN-AAP chorus at the Capitol.

It’s easy, too. We’ve arranged for two sessions: the morning session orientated towards residents, the afternoon session geared toward community and faculty pediatricians. Both will present excellent opportunities to learn about the issues we’re following and to add your voice. Join us for either one… or both!

Register today for this important event!

Early Medicaid Enrollment Gets Boost

Governor Mark Dayton made news earlier this week with his announcement that the “early Medicaid” expansion would begin by March 1, rather than the October date projected by outgoing Pawlenty administration officials.  With the Governor’s authorization earlier this month, up to 95,000 individuals will be eligible for the joint state-federal program, replacing the state’s General Assistance Medical Care (GAMC) program and expanding care for others presently covered under MinnesotaCare.

The changes were made possible by the federal health care reforms passed in 2010 and were the subject of much debate during last year’s legislative session and gubernatorial campaign.  One day after taking office earlier this month, Governor Dayton signed the executive order making the expansion possible.  The governor and DFL legislators were highly critical of earlier statements by DHS officials that the expansion would take up to 10 months to complete.

Starting March 1, GAMC enrollees will automatically be enrolled and will receive MA benefits. New applicants who are eligible for MA can enroll starting March 1. MinnesotaCare enrollees will transition to MA over a period of six months but will be eligible for MA benefits beginning March 1 and coverage will be retroactive. Current GAMC and MinnesotaCare enrollees will receive information from the Department of Human Services (DHS) about the expansion and any actions they need to take. Information will also be available on the department’s website.

According to the department, the state cost of MA early expansion is equivalent to the current cost of providing coverage to GAMC and MinnesotaCare enrollees who will shift to MA.

In related action, Senator David Hann (R – Eden Prairie) introduced SF 33, a bill that would roll back the early Medicaid enrollment and declare that every resident of Minnesota has the “freedom of choice” in health care.  The bill, the text of which is available here, has been scheduled for a hearing next week, though no companion has been introduced in the House.  Governor Dayton has stated that he will veto any attempt to undo the state’s participation and, in fact, participated in a press event this week with U.S. Health and Human Services Secretary Kathleen Sebelius singing the program’s praises.

Governor Announces DHS Appointment

Gov. Dayton announced his pick of Hamline University Law Professor Lucinda Jesson to direct the largest agency in state government, the Department of Human Services.  This position has been highly anticipated as it is expected that the HHS budget will be the main target for budget cuts by the Legislature.

Jesson is a former prosecutor and a deputy attorney general under former A.G. Skip Humphrey.  She also served on the Dayton transition team. Jesson, who directed Hamline’s Health Law Institute, will have one of the toughest jobs in state government.  With health care costs growing more rapidly than other portions of state government and subsidized health programs a top target of the new majorities in the Legislature looking to erase a $6.2 billion projected budget deficit, the task at HHS is daunting.

The commissioner has since announced that Anne Barry, the DHS Chief Compliance Officer, will be the new Deputy Commissioner.

Several individuals familiar to the pediatric community were named to key positions, including Scott Leitz.  Leitz worked on health care reform for the Department of Health and served most recently as the director of public policy for Childrens Hospitals and Clinics; he will be assistant commissioner and will lead all the divisions currently under the Medicaid director and the assistant commissioner of health care.

Lauren Gilchrist, daughter of Dr. Gerald Gilchrest, a pediatrician and member of the MN-AAP Policy Committee, has been appointed the assistant commissioner for health policy and reform. A former senior health policy advisor to Sen. Al Franken and a health policy fellow to Sen. Edward Kennedy, Gilchrist will spearhead the agency’s efforts to implement health reform, coordinating across DHS with the Departments of Commerce and Health.  Additionally, Maureen O’Connell, a legal advocate, will be the new assistant commissioner for the Chemical and Mental Health Services Administration.

Legislative Committees Begin to Craft Budget, Continue Overviews

Republican leaders in the Senate and House announced the start of their budget balancing work with bills that make Governor Pawlenty’s unallottment reductions permanent.  In total there would be $840 million in one-time spending cuts permanent. These include $584 million in cuts to tax aids and credits (primarily to local governments); $185 million to higher education; and $72 million to various health and human services programs.  Minnesota Management and Budget (MMB) is also to identify $200 million in savings that could be achieved by capturing unspent funds in agencies’ budgets.

Hearings on these cuts to health and human services programming were held in the House Health and Human Services Committee this week and proved to be contentious.  The HHS cuts, found in HF 128 available here, permanently extend the 2010 cuts to basic care programs (though not physician reimbursements).  Programs for low-income Minnesotans, such as General Assistance and Supplemental Aid Grants as well as Child Support Enforcement Grants to counties, would also see cuts.  Committee DFLers voiced significant opposition to the cuts, though efforts to stop the bill failed on party-line votes.  Republicans, including the Chair, stated that these cuts were identical to those ratified by the DFL controlled legislature at the end of the 2010 session.

While new bills continue to be introduced in the legislature (already totaling slightly more than 260 in both bodies), the majority of the committee actions thus far have been informational in nature.  All of the health care committees have taken testimony from various agency and department officials, non-partisan legislative staff, and a number of interest groups.  With so many new members on all committees, the chairs are using these first weeks to bring their members ‘up to speed’ on the issues before them.

Chairman Gottwalt Introduces Plan to Change MinnesotaCare

Rep. Steve Gottwalt (R – Saint Cloud), chair of the House Health and Human Services Reform Committee, introduced HF 8, a bill to shift a significant portion of MinnesotaCare enrollees to private insurance.

His bill, available here, would provide subsidies to eligible adults without children with incomes above 133% of the federal poverty level to purchase individual, private insurance in place of MinnesotaCare.  Subsidy levels are determined on a sliding scale based on age and income.  Those individuals denied care in the private market would receive a slightly higher subsidy to seek coverage from the Minnesota Comprehensive Health Association (MCHA), Minnesota’s high-risk insurance pool.

Rep. Gottwalt notes that under his proposal, physicians and hospitals would receive the significantly higher reimbursement rates of private payers, rather than the low Medicaid rates.  Fiscal notes prepared by non-partisan staff for earlier, similar proposals have suggested that the bill would save over $100 million over a biennium.  Critics have countered that the savings would largely come from individuals being unable to navigate the private market and dropping coverage.

The bill received its first hearing in the House Health and Human Services Reform Committee this week.  Committee DFLers expressed some interest in the plan, though voiced concern about whether the plan would allow some lower income individuals to lose their care entirely due to the complexities found in the private insurance market as well as the hurdles of a high-deductible burden.  Democrats were rebuffed in their efforts to amend the bill with a requirement that the private insurance products provide mental health coverage.  Also defeated were amendments that would mandate that individuals denied coverage be referred to MCHA (though that option remains for those denied), as well as limits on the cost of premiums and deductibles.  The bill passed committee on a voice vote and was referred to the House Commerce Committee.

The bill’s companion is being carried by Senator David Hann and is set to receive its first Senate hearing in his committee next week.

Federal Conformity Dependent Coverage Health Care Reform Act (SF 47/HF 79)

Employees will not have to pay state taxes on the value of health insurance for dependents and adult children up to age 26 (permitted under the Federal Health Care Reform bill) for tax year 2010 under a provision that passed in House and Senate tax committees this week.  Both private employers and public employers were hoping that the bill would have also passed this federal conformity for 2011 and beyond as it creates administrative hurdles to value and withhold the appropriate state taxes for this benefit for certain employees with dependent coverage.  The Senate tax committee chair, Senator Julianne Ortman (R – Chanhassen), hopes to take up the issue for tax year 2011 and beyond within the next 30 days.  Unfortunately, this issue has gotten tangled up in whether or not a legislator supports the “ObamaCare” bill.  There were several new members who were concerned that supporting the federal conformity act may be confused with support of the Federal reform bill.

House HHS Finance Work Groups Formed

House HHS Finance Committee Chairman Jim Abeler (R – Anoka) and House HHS Reform Committee Chairman Steve Gottwalt this week announced the formation of 8 study groups intended to review issues and develop reform proposals.  It’s unclear what role the public will have with these work groups and whether their meetings will be open to the public.  The groups and their members are:

  • Welfare (Reps. Lanning & Hayden)
  • Child Care (Reps. Franson, Peterson & Slawik)
  • Hospitals (Reps. Kiffmeyer, Murphy, Norton & Benson)
  • Health Care and Dental (Reps. McDonald, McElfatrick and Gruenhagen, Huntley & Laine)
  • Mental Health and CD (Reps. Barrett & Diane Anderson)
  • Waivers (Reps. Lohmer, Mack, Hosch & Loeffler)
  • Long Term Care (Reps. Hamilton & Schomacker)
  • MDH, Rural Health & Public Health (Reps. Quam & Huntley)

Talk of a Government Shutdown?

The House Health and Human Services Finance Committee on Thursday received testimony from senior Minnesota Management and Budget staff about the process for shutting down state agencies.  The staff described the steps taken in 2001 to prepare for a shutdown, which was averted, and in 2005, when some state agencies were closed for 8 days.  In both cases, “critical life, health, safety and life functions” were ordered to be maintained.  Partisan tempers flared when DFLers questioned whether the hearing was a signal the Republican majority wasn’t serious about completing its work on time, while Republicans, including Committee Chairman Jim Abeler, noted that the value of the briefing was to prod legislators to complete their work to avoid the trauma and disruption of a shutdown.

Health Insurance Exchange Federal Funding Sought

In a reversal from former Governor Pawlenty, the Dayton administration has announced that it will seek a $1 million federal grant to begin the work of developing a state health insurance exchange.  Under Governor Pawlenty, Minnesota had previously declined the opportunity to seek the grant.  The move was announced after Governor Dayton held discussions with U.S. Health and Human Services Secretary Kathleen Sebelius.  Federal officials have indicated that the state will receive the funding by March 1.

State of the State and Budget Plan Dates

Governor Dayton will deliver his “State of the State” address February 9. He also announced that his budget will be released on February 15th. State law requires the governor to present his budget plan by the 15th and Dayton announced that he is using the entire time to put his budget together.   With the delay in the election results, the announcement did not come as a surprise.

Annual Sponsors

Children's Minnesota
Gillette Children's
Hennepin Healthcare
University of Minnesota Health
Essentia Health
Mayo Clinic
Shriners Healthcare for Children-Twin Cities