Medicaid for Minnesotans could mean a Happy New Year

Minnesotans have great cause for celebrating in the New Year. Minnesota’s new governor, Mark Dayton, is taking immediate action to help some of the state’s most vulnerable residents access health care (the signing ceremony is scheduled for this Wednesday at 9:30 am in the Governor’s Reception room at the State Capitol). The move will take advantage of a provision in the federal Affordable Care Act that allows Minnesota to provide extremely low-income adults without dependent children with health coverage through Medicaid (in our case, those with incomes up to 75 percent of the federal poverty guidelines, or $677 a month).

This is a group that finds accessing health care to be extremely challenging. They often do not qualify for mainstream public health care programs or are too poor to afford the options that are available – a vast majority have incomes below 25 percent of federal poverty guidelines (just $203 a month). These are individuals who face extreme challenges, including homelessness and multiple health problems.

Minnesota once offered a comprehensive state-funded health care coverage program uniquely designed to meet the special needs of these adults, called General Assistance Medical Care (GAMC). But in 2009, Governor Tim Pawlenty vetoed funding for GAMC, impacting about 70,000 Minnesotans who had turned to the program at some point during the previous year. The Governor’s veto prompted an outcry among health and low-income advocates in Minnesota who worked hard to highlight how devastating the loss of GAMC would be for individuals and providers.

Backed by strong public pressure, policymakers reopened this issue during the 2010 Legislative Session and eventually compromised on reinstating a vastly scaled-down GAMC program. But this very limited program has been facing widespread criticism because individuals have found it very difficult to access services (particularly outside of the Twin Cities metro area) and health care providers are forced to bear all the financial risks.

In light of the current situation, Governor Dayton’s move to use Medicaid to cover adults without dependent children up to 75 percent of federal poverty guidelines has many upsides for Minnesota.

It’s good for the people. Under the Medicaid option, close to 100,000 very low-income Minnesotans will gain access to a full set of benefits, won’t face enrollment limits and will be able to get their care closer to home. This is extremely important to this group, because research looking at the original GAMC population has shown that 30 percent had one or more chronic medical conditions and 60 percent suffered from a mental health or chemical dependency problem. This is in sharp contrast to life under the vastly scaled-back GAMC program, where only four hospitals in the state (all in the Twin Cities metro area) have been offering a limited set of services – and these hospitals have closed enrollment at times to control costs.

It’s good for the community. Under the Medicaid option, health care providers will get higher reimbursement levels than under the limited GAMC program, and those reimbursements won’t be capped. That will minimize the financial risk for providers, which is good for the people they employ and the communities they serve. Compare that to life under the modified GAMC program, where funding for care has been capped, placing the financial risk on health care providers. When the money runs out, providers go uncompensated for their services.

It’s good for the state budget. Under the Medicaid option, the federal government will pay for half the costs of health care for this group. Right now, GAMC is a fully state-funded program. Taking the Medicaid option will bring more than $1 billion in federal funds to Minnesota during the next biennium and does not add to the state’s budget deficit. And remember, no matter what action Minnesota takes now, the Affordable Care Act will expand Medicaid to include these low-income adults and many others starting in 2014 when adults with incomes up to 133 percent of federal poverty guidelines become eligible. At that point, the expansion will be fully funded by the federal government for a period of time. This is a chance for Minnesota to get a jump-start on better health care for this population and bring more federal dollars into the state.

But before we can really celebrate, there is one more challenge to overcome. At a hearing in December, state health care officials reported that it will take at least nine months to implement the Medicaid option. The announcement came as a shock to most policymakers and advocates, and Governor Dayton has said he will do everything he can to speed up the process. For now, at least, Minnesota will have to wait a little longer before we can realize the benefits of this new year’s gift.

-Christina Wessel
(Note: a version of this blog was originally posted as a guest blog on “Say Ahhh!”, the health care blog for Georgetown University’s Center for Children and Families).

About Christina Wessel

Christina served as the Minnesota Budget Project's deputy director until January 2014.
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