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Health care decisions facing 2019 Minnesota legislature

Tax on health care providers to vanish.

Posted: Dec 31, 2018 7:20 AM

MINNEAPOLIS (AP) — There's been lot of talk at the Capitol about a $1.5 billion budget surplus , but lawmakers are already worrying about how to plug a $700 million hole. That's because a tax on health care providers that helps fund Medicaid and the state's separate MinnesotaCare program is slated to go away at the end of the year.

Finding a solution is one of the top priorities for the 2019 session, which opens Jan. 8. Gov.-elect Tim Walz and leaders of the new Democratic majority in the House want to renew it to maintain a stable funding source for those programs, but the state's largest doctors' group is touting an alternative that might be politically palatable to the tax-averse Senate GOP majority .

As for that one-time $1.5 billion surplus, most of the discussion so far has been about how to spend it on one-time projects, such as road and bridge improvements, and other needs.

Here's a look at some top health issues facing the Minnesota Legislature:

THE PROVIDER TAX

The Legislature enacted the tax in 1992 to support programs including MinnesotaCare, which covers the working poor, and Medical Assistance, the state's name for Medicaid. Those programs now serve over 1 million residents, noted Nan Madden, director of the Minnesota Budget Project, an initiative of the Minnesota Council of Nonprofits. The tax on 2 percent of gross revenues applies to thousands of health care providers big and small.

Lawmakers voted in 2011 to repeal the tax starting in 2020 under a compromise between Democratic Gov. Mark Dayton and a GOP majority to end a 20-day government shutdown. The question of how to cope with the loss of what's now nearly $700 million annually got kicked down the road.

Walz and Democratic leaders want to renew the tax. Madden said renewal would preserve a stable source of funding when federal funding is less reliable.

But Republicans have long derided it as a "sick tax" that they say results in higher costs for everyone. The GOP holds just a one-seat majority in the Senate.

Sen. Jim Abeler thinks he has a solution. He plans to introduce a proposal from the Minnesota Medical Association to replace the provider tax with a 2 percent "fee" on claims processed by insurance companies and administrators of self-insurance plans. The Anoka Republican acknowledged that calling it a fee instead of a tax has echoes of 2005, when Gov. Tim Pawlenty called a tobacco tax increase a "health impact fee" because he had pledged not to raise taxes.

Abeler, a chiropractor, said one of the big criticisms of the provider tax is that it's a 2-percent direct hit on patients of smaller providers like him — as well as of dentists, psychologists, counselors and opticians. They often pay out-of-pocket if their insurance doesn't cover those services. Big care systems just pass the tax through to insurers.

MMA lobbyist Dave Renner said the fee, which the association calls a "claims expenditure adjustment," would be easier for the state to administer because far fewer entities than the current 8,000 providers would have to pay it. He acknowledged that keeping it at 2 percent would raise about $100 million less annually than the current tax, but said it would be enough. And he agreed that an "assessment" could be an easier sell than a tax.

MINNESOTACARE BUY-IN

Walz and other Democrats want to let all Minnesotans buy into MinnesotaCare, an idea that Dayton promoted as an alternative to the individual private insurance market.

But Republican leaders say it would hurt providers, especially struggling rural hospitals and clinics, because MinnesotaCare pays them less than insurers do.

How much the "public option" would cost the state is in dispute. The Dayton administration had said nearly all the costs would be covered by premiums from new enrollees.

REINSURANCE

Minnesota's reinsurance program to help insurers hold down premiums in the individual market is also up for renewal, and it might not be as heavy a lift.

That's because premiums are projected to fall as much as 28 percent in 2019, and there's likely to be leftover money from the $549 million that the 2017 Legislature appropriated (partly from provider tax money), and Republicans are strong supporters.

The reinsurance pool helps insurers offset claims from patients with unusually high expenses. The state Commerce Department has said that lawmakers will have to either put up more money or come up with an alternative for keeping rates stable.

Minnesota Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 129863

Reported Deaths: 2367
CountyConfirmedDeaths
Hennepin33310981
Ramsey13782357
Dakota9541137
Anoka8414150
Stearns566541
Washington546970
Scott329334
Olmsted318330
St. Louis285065
Wright236714
Nobles221916
Clay221443
Blue Earth20207
Carver17437
Kandiyohi16505
Sherburne163421
Rice16059
Mower150315
Winona123618
Crow Wing98021
Lyon9516
Chisago9502
Waseca9229
Benton9107
Beltrami8717
Otter Tail8187
Todd7695
Steele7413
Nicollet71417
Itasca70617
Morrison6948
Freeborn6594
Douglas6473
Le Sueur6145
Martin60616
Polk5964
McLeod5804
Watonwan5764
Goodhue55811
Becker5383
Pine5230
Isanti5195
Chippewa4243
Carlton4111
Mille Lacs38714
Dodge3860
Hubbard3692
Wabasha3590
Cass3575
Pipestone34217
Meeker3223
Brown3163
Rock3154
Yellow Medicine2755
Cottonwood2720
Murray2723
Redwood26911
Fillmore2500
Renville24311
Sibley2433
Roseau2280
Faribault2210
Wadena2153
Unassigned21153
Jackson2071
Houston1951
Kanabec19510
Swift1941
Stevens1771
Lincoln1760
Pennington1741
Aitkin1652
Koochiching1654
Pope1540
Big Stone1320
Lac qui Parle1313
Wilkin1294
Lake1150
Norman1080
Mahnomen1062
Marshall1031
Clearwater1010
Grant924
Red Lake692
Traverse540
Lake of the Woods441
Kittson380
Cook120

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 112754

Reported Deaths: 1615
CountyConfirmedDeaths
Polk18617286
Woodbury704194
Johnson576330
Black Hawk544098
Linn5342129
Dubuque501657
Scott433738
Story394418
Dallas339744
Pottawattamie314844
Sioux236416
Buena Vista224112
Marshall198336
Webster180715
Plymouth161927
Wapello150562
Clinton143026
Muscatine140758
Crawford134414
Des Moines133610
Cerro Gordo131425
Warren12037
Carroll109912
Jasper107034
Henry10325
Marion96310
Lee93110
Tama92737
Delaware74212
Dickinson7217
Wright7101
Boone7039
Mahaska67024
Bremer6559
Harrison63711
Washington63411
Jackson5763
Benton5532
Lyon5337
Clay5144
Louisa51215
Winnebago46619
Hamilton4624
Hardin4606
Winneshiek4609
Kossuth4510
Poweshiek44711
Cedar4375
Buchanan4314
Jones4284
Floyd42511
Emmet42017
Clayton3933
Iowa3918
Cherokee3882
Page3860
Sac3854
Guthrie38015
Franklin37818
Cass3712
Mills3711
Shelby3621
Fayette3604
Butler3592
Madison3533
Allamakee3518
Chickasaw3411
Clarke3393
Humboldt3163
Palo Alto3082
Hancock3064
Grundy2925
Calhoun2904
Osceola2660
Howard2629
Monroe25811
Mitchell2430
Monona2361
Jefferson2311
Taylor2312
Union2234
Appanoose2203
Pocahontas2192
Lucas1986
Fremont1941
Ida1872
Greene1830
Van Buren1672
Davis1654
Montgomery1647
Keokuk1561
Adair1521
Decatur1480
Audubon1411
Worth1370
Wayne1163
Ringgold882
Adams740
Unassigned80
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