Schminke: Feds hurt state’s strong healthcare finance system

Published 4:34 pm Saturday, August 16, 2014

Note: This is the second of a two-part guest column series by candidate Dennis Schminke on the Patient Protection and Affordable Care Act.

By Dennis Schminke, GOP candidate for House District 27B



MNSure — Minnesota’s version of the Affordable Care Act (PPACA) continues to make news. With nine months’ experience behind us and elections looming, we should take a look at its effects on Minnesota—both good and bad.

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The good news is that there has been a small up-tick in the percentage of Minnesotans who have health insurance coverage—largely a result of Medicaid Expansion for free coverage. Free is good, if you qualify. However, many Minnesotans are finding that their premiums are not free—and in fact are much higher than before PPACA, with big increases in deductibles and co-pays, as well.

Minnesota spent $160 million and still has a poorly-functioning website. We know this after spending another $5 million for a Deloitte audit. This same study tells us that much of what was wrong with the system is still not fixed. Many defects are not even being properly tracked.

More than two-thirds of key components necessary for the upcoming fall open-enrollment period are not in place and functioning. Hundreds of additional employees are needed to process applications manually. Users of the system can expect a repeat of last year’s frustrations in trying to sign up for required insurance coverage.

There have been other costs. In the 2014 session, the legislature provided an additional $400 million for the MN Healthcare Access Fund. Republicans are calling this a MNSure bailout, with budget tails that will approach $1 billion by the end of the 2017 biennium. The DFL prefers to call it a shift within the state general fund budget. Note: This is the same DFL that claims to have fixed state budget problems without gimmicks. Perhaps the lesson here is that a shift is not a gimmick unless it is employed by a Republican legislature.

Whatever we think about this budget sleight-of-hand, it is indicative of the larger problem lying beneath: Too many are signing up and getting free or highly subsidized coverage. Too few of the applicants are young, healthy, and purchasing coverage at market rates. Thus, the fund will run out of money.

There is more. It is a certainty that many more financial stressors will hit our state budget in the next ten years as a result of MNSure. The federal government pays (with borrowed money—but that’s another story) 100% of the cost of our Medicaid expansion for the first three years, and after that, 90% through 2022. After that…what? I have done much research and have asked many people that question. No one has been able to give a definitive answer. Free money from the feds was tantalizing, but we must also consider the long-term unintended consequences. Will our state budget be on the hook for all of it at some point? No one seems to know. And that is unfortunate because this cost is a really, really big number.

Now that Minnesotans are mired to our chins in the Obamacare swamp, it is difficult to see a way out. The very foundations of Obamacare were flawed from the start. It was sold to the American people with a long series of untruths. It remains highly unpopular with the American public to this day. Several more columns could be devoted to these angles. This much is certain—many more disruptions to our health insurance systems will come as the additional Obamacare mandates take effect—altering or taxing, for example, coverage provided by larger employers with group or self-insured plans.

Had the American people known what the result would be, they would never have allowed PPACA to pass. Unfortunately for Minnesota, the problem was created by the federal government, and any real fix will have to come from there as well. In the meantime Minnesotans are stuck. The DFL decision to go all-in for Obamacare has resulted in hardship, lost coverage, and higher costs for many hardworking Minnesotans. Prior to PPACA, we had one of the best all-around healthcare finance systems in the country — with high quality care, relatively low premiums, and one of the lowest percent uninsured. All of this has be sacrificed on the altar of federal-government-knows-best ideology.