Steve Gottwalt, my adopted state legislator, recently subitted a health care reform bill. Yesterday, it passed its first test in the Health Care and Human Services Policy and Oversight Committee. Steve’s legislation was so solidly constructed that it passed unanimously:

News Release

REP. GOTTWALT’S HEALTH CARE REFORM INITIATIVE UNANIMOUSLY PASSES COMMITTEE

ST. PAUL - State Rep. Steve Gottwalt, R-St. Cloud, today presented a health care reform bill (HF1865) that would improve how Minnesota provides health care coverage to low-income adults, while saving the state an estimated $100 million per year.

Gottwalt presented the Healthy Minnesota Plan (HMP) to the Health Care and Human Services Policy and Oversight Committee, which unanimously approved the bill, moving it on to the Health and Human Services Finance Division.

The HMP would cover 84,000 Minnesota adults currently on MinnesotaCare with a more generous private market benefit package, and a deductible covered mostly by the state. The plan would pay providers market rates for the health care they deliver, eliminating cost-shifting, and opening more health care access to those enrolled in the plan.

The HMP would save state administrative costs, provide greater flexibility for the enrollee, tap into savings of large private insurance pools, and fit well with other health care reform initiatives. Gottwalt described the bill as a “demonstration project that will improve care for 84,000 Minnesotans, and save the state about $200 million in the coming biennium.”

“The plan benefits consumers, providers and the state,” Gottwalt said. “Even if Minnesota were not facing a huge budget deficit, we need to explore better ways of covering more Minnesotans in a manner that is financially sustainable and engages consumers more directly. The private market can deliver better access to high quality, cost-effective health care.”

Gottwalt said Minnesota currently spends about $7,000 per year for every adult enrollee on MinnesotaCare. He said conservative estimates show the HMP will save the state more than $1,000 per adult enrollee, or about $100 million per year ($200 million per biennium).

“The savings actually grow over time,” Gottwalt said. “We think this approach could be used to provide coverage to other public enrollees, saving even more.” Given the current state budget deficit, this is seen as a sustainable way to provide coverage to people in need while saving the state significant money.

Gottwalt said the HMP generates state savings several ways, starting with tapping into larger, private insurance pools to capitalize on more efficient administrative, education and enrollee services now provided by the state.

Also, the cost to the state for covering most of the deductible under the HMP is based on actual expenditures, not a per-member-per-month capitation payment. The Healthy Minnesota Plan Account (structured as a Health Reimbursement Account or HRA) requires the state to maintain a reserve, but not full funding up front. HF1865 does not include copays, but it is structured to be flexible in addressing cost sharing issues.

The HMP offers an even greater level of benefits than currently available under MinnesotaCare, including dental, vision and pregnancy coverages. The plan provides first-dollar coverage of primary and preventive care, all the covered benefits of MinnesotaCare, and a $5 million lifetime maximum (much stronger than MinnesotaCare’s $10,000 inpatient maximum).

“Instead of being denied access to care by providers who do not get paid enough from existing Minnesota public programs, these enrollees will now be considered on par with other privately insured people,” Gottwalt said. “Also, these enrollees will have a debit card with which to pay eligible expenses within the deductible. No more being shunned for lack of a cash co-payment or deductible payment. And, unlike
MinnesotaCare, the Healthy Minnesota Plan major medical coverage is completely portable; it belongs to the enrollee.”

This sentence jumped off the page at me when I read it:

Gottwalt described the bill as a “demonstration project that will improve care for 84,000 Minnesotans, and save the state about $200 million in the coming biennium.”

Think about this: Rep. Gottwalt’s legislation would create a private sector option to 84,000 Minnesotans currently on MinnesotaCare, which will save Minnesota’s taxpayers $200,000,000 this biennium alone. This is the other showstopping paragraph in the statement:

“The savings actually grow over time,” Gottwalt said. “We think this approach could be used to provide coverage to other public enrollees, saving even more.” Given the current state budget deficit, this is seen as a sustainable way to provide coverage to people in need while saving the state significant money.

The fact that the plan created by this legislation creates ever-growing savings is a big thing. What’s bigger is that this plan eliminates a great deal of cost-shifting, a major driver of health care costs.

It’s important that this reform comes with Minnesota facing a state record deficit, too.

This is just another piece of proof that Republicans have been driving the reform agenda in St. Paul this session. While we must give credit to the DFL for voting for this legislation, it’s only appropriate that we give the lion’s share of the credit to Rep. Gottwalt for researching, then writing this legislation. It’s impossible to call this a ‘tinkering-around-the-edges’ reform. This legislation is transformational.

This is why Rep. Gottwalt, only in his second term in St. Paul, is considered one of the House GOP’s go-to guys on health care issues, a reputation he’s had since half way through his first year in St. Paul.

It would be wrong if I didn’t note that this legislation is a free market-based solution, which is the starting point for all of Steve’s health care reforms.

Technorati: Reforms, Health Care, Private Sector, Cost Savings, Cost-Shifting, Steve Gottwalt, MinnesotaCare, Healthy Minnesota Plan, Co-Pays, Deductibles, Budget Deficit