2010 Legislative Session: Health Policy Wrap-Up

The Partnership and our health sector members entered the legislative session with an eye on the national debate over federal health care reform. The federal overhaul, which President Obama signed in February, added new and uncertain dynamics to Minnesota’s health care and budget balancing act.  With General Assistance Medical Care (GAMC) slated for elimination under the Governor’s unallotment plan, lawmakers hammered out an agreement in April to extend, cut and reform the fee-for-service program that covers roughly 30,000 adults without children earning less than $8,000 a year. Under the plan some larger hospitals will be paid a set amount as “care coordination organizations” to treat GAMC patients, while all providers will be subject to deep payment reductions.

Following analysis of national health reform, legislators reopened the GAMC issue later in the session. Federal reform allows Minnesota and a handful of other states to expand Medicaid coverage before 2014 and receive additional funds. The House and Senate approved a plan to shift Minnesota’s GAMC population into Medicaid and receive more than $1 billion in federal funds over the next four years. To fund Minnesota’s portion of the expansion, the bill imposed a $14 million surcharge on health plans, a $48 million surcharge on hospitals, along with other cuts, delays and shifts. Governor Pawlenty vetoed the bill.

With only four of the 17 eligible hospitals agreeing to serve as care coordination organization, the end-of-session compromise shifts some of that funding to the uncompensated care pool. The final bill also creates a health care reform task force to coordinate Minnesota’s health care system with national health reform and enables Governor Pawlenty or his successor to opt into the early Medicaid expansion by January 15, 2011.

What happened to FMAP?

Through most of the session, lawmakers had been counting on $408 million in additional federal Medicaid funding, referred to as FMAP, to help close the budget gap. That funding is at best delayed and could potentially be deleted from legislation sitting in the U.S. Senate. If that funding materializes, it will be deposited in the state’s depleted cash flow account.

For more information, contact Health Policy Director Beth McMullen.