Last week, a Rasmussen poll of likely voters in Minnesota found that 54% favor repealing the health care reform legislation that barely passed Congress earlier this year. While those numbers are in line with the rest of the country on the subject of Obamacare, many in Minnesota are unaware that we have a much more immediate threat to our health care system brewing in the state legislature-the very real prospect of a state run universal health care program.
Last month I listened to Sen. John Marti pitch the Minnesota Health Plan, which would go far beyond Obamacare and move Minnesota into a mandatory universal health care plan. Your current health care insurance would likely disappear, replaced by a health care plan run by the state of Minnesota. Like most progressive visions, the plan is long on rosy scenarios and short on details.
The rosy scenario? Every Minnesotan would be covered by the state for health care. No insurance companies, no billing departments at hospitals, no co-pays and no deductibles. True universal coverage. What a utopia Minnesota would be. But as with every rosy scenario, the devil is in the details. In this case, I’m not sure which is worse-the details that the plan’s proponents know, or the ones that they don’t.
Detail number 1, the cost; just a mere eight percent of your income. Higher than the highest state tax bracket currently in Minnesota, eight percent would more than double the amount of money that the state takes from your paycheck. As a resident of Minnesota, you would have no choice in paying this new tax even if you have your own healthcare insurance already. That also means that Minnesotans would pay twice for health care-once for the new taxes created to fund the federal health care program, and once to pay for a universal health care system in Minnesota. Interestingly, you won’t find this 8% tax rate specified anywhere on the website for the plan-but it was listed in very small print on the handout given by Sen. Marti.
Detail number 2, how it will be paid for. According to the website, funds will be collected by the Department of Revenue, but then be directed straight to the MN Health Fund. This would be done to ensure that the legislature would have no chance to take money out of the account for other projects. While this seems like a reasonable idea, the real problem wouldn’t be keeping the legislature from raiding the Health Fund—the problem would be keeping the Health Fund from raiding the general fund via the legislature. Since the health care plan would be funded by one source and one source only (the 8% income tax), the problem comes when the health plan needs more money to operate than is generated by the special income tax. When income tax revenues fall (as in the current recession) the plan will have less money to spend on patients. With only a fixed amount of money available, if costs go up then services will have to go down. Or the legislature will have to authorize taking money out of the general fund to cover the shortfall.
Detail number 3; how much the plan will pay to doctors. Anyone who uses Medicare and any doctor who accepts Medicare knows the ugly little secret of Medicare payments, which is that they are far below actual costs. Doctors and hospitals have struggled for years with the fact that Medicare pays what the government says a procedure should cost, despite what the actual cost is. Not only do doctors not make any money on some patients, they can actually lose money by treating them. The American Medical Association says that right now, one third of all primary care physicians restrict the number of Medicare patients they see. And 83% of them said the low reimbursement rate was the reason. This same problem would apply to the Minnesota Health Plan. With the state of Minnesota determining how much doctors will be paid for each service, the only way for a doctor or hospital to make more money will be to see more patients and spend less time treating each one.
Detail number 4; what is and is not covered. According to Sen. Marti, everything ‘medically necessary’ would be paid for by the plan. But what is medically necessary, and who decides? These trivial little unimportant details would be worked out at ‘a later date’. But these details are at the heart of the problem with universal health care. Would a hip replacement for your 90 year old grandmother really be necessary, or can she get by without it? Will your personal doctor be able to decide what is necessary, or will he have to follow the rules set by a statewide commission? If these questions seem radical, then remember that nothing is off the table when the state is in charge of your health care. In a state that bans smoking in most public buildings, will smoking related problems be covered by the state run insurance program? Since the state provides you with thousands of miles of bike and walking trails, will the state run insurance cover health problems related to obesity? Some insurance companies have started to offer discounts for healthy behavior, such as joining a gym. But a state run insurance program wouldn’t need to offer incentives when it can simply mandate healthy behavior. If this line of thinking seems paranoid, then remember that the main argument in favor of the state smoking ban was not the evils of second hand smoke-it was the medical costs to the state of Minnesota associated with second hand smoke.
Detail number 5; who will benefit most from this plan? The perennial friend of the DFL, the unions. In the recent labor dispute between metro area hospitals and the nurses union, one of the critical demands by the nurses was to have more nurses on duty to ensure ‘adequate nurse to patient ratios’. This issue was dropped in the final agreement, but the unions said publicly that it was still important to them, and the president of the MN Nursing Association said “We’ll keep working at the Legislature” for a state law requiring nurse-patient ratios. So it shouldn’t come as a surprise that the MN Health Plan would mandate that ‘the plan ensure that there are an adequate number of health care professionals’. This is proposed as a remedy to the long lines that would inevitably result from universal coverage. Basic economics teaches that demand increases for anything that is subsidized, and that would be true of health care as well. If it doesn’t cost you anything different to go to the doctor once a year or once a week, then doctor’s offices will quickly be flooded with people who see the doctor at the first sign of a cold or flu. Increased demand for medical care will mean thousands of more doctors and nurses will be needed (and mandated by law)-a bonanza for union membership. More members mean more dues, and more money means more influence at the capitol. The Minnesota Nurses Association alone has spent more than $90,000 this year on behalf of DFL candidates and PAC’s that support DFL candidates.
Despite the attempt to label Republicans as the ‘party of no’ when it comes to health care, the GOP has offered plenty of solutions to the problems in our health insurance industry. The difference is that we think the answer is less regulation and government involvement, not more. Purchasing health insurance across state lines, reducing state mandates on what must be covered by insurance plans, and unplugging health insurance from employment would all serve to reduce insurance costs and increase the number of people covered. And the first two of these ideas can be accomplished at the state level.
If you have never heard of the MN Health Plan and think the odds of it passing must be small, think again. The plan has 29 co-authors in the Senate, and 43 in the House, including Margret Anderson Kelliher, the DFL endorsed gubernatorial candidate. Those aren’t just potential yes votes; they are legislators who support the idea enough to put their names on the bill. Just like Obamacare, the MN Health Plan is touted as a cost savings to the state, by cutting waste from the health care industry and making it more efficient. Next year the legislature will be tasked with closing a nearly 6 billion dollar budget gap, which means that any and every idea for saving money will come forward. Obamacare was sold in part as a way to cut the federal budget, and the very same argument will likely be made for the MN Health Plan.
As conservatives focus on stopping and then repealing Obamacare before it destroys our economy and health care system, we can’t forget that Democrats here in Minnesota are looking at a far more radical plan. This election we can’t forget about the importance of taking back at least the House in the Minnesota legislature, as well as holding on to the governor’s office.