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: 37624

Reported Deaths: 1503
CountyConfirmedDeaths
Hennepin12150785
Ramsey4805226
Stearns234519
Dakota228690
Anoka2180107
Nobles16626
Olmsted110115
Washington106940
Mower9452
Rice8357
Scott7004
Clay58538
Kandiyohi5701
Wright4565
Blue Earth4532
Todd4002
Carver3641
Lyon3092
Sherburne3075
Freeborn2900
Steele2281
Watonwan2160
Benton2143
St. Louis17715
Martin1635
Nicollet15912
Cottonwood1340
Goodhue1298
Winona12215
Crow Wing10612
Pine1030
Le Sueur981
Chisago971
Otter Tail931
McLeod880
Carlton850
Dodge840
Polk812
Chippewa781
Unassigned7637
Isanti720
Itasca6412
Waseca640
Douglas620
Meeker611
Morrison591
Murray580
Becker550
Faribault550
Jackson550
Sibley542
Pennington500
Pipestone371
Mille Lacs342
Renville322
Wabasha310
Brown302
Rock300
Yellow Medicine300
Beltrami290
Fillmore280
Houston250
Swift211
Norman200
Wilkin203
Redwood180
Cass152
Wadena150
Aitkin140
Big Stone140
Kanabec141
Koochiching141
Roseau130
Marshall120
Grant100
Lincoln100
Pope100
Mahnomen81
Clearwater70
Hubbard60
Lake60
Traverse50
Lac qui Parle40
Stevens40
Red Lake30
Kittson20
Cook10
Lake of the Woods00

Iowa Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 30975

Reported Deaths: 720
CountyConfirmedDeaths
Polk6464179
Woodbury321544
Black Hawk225258
Buena Vista171111
Johnson12648
Dallas126329
Linn126282
Marshall104319
Scott77810
Story7623
Pottawattamie72111
Wapello70630
Dubuque68322
Crawford6772
Muscatine62944
Sioux4630
Tama46229
Wright3801
Louisa36013
Jasper32317
Plymouth3165
Warren2731
Dickinson2642
Washington2369
Webster2132
Hamilton1871
Cerro Gordo1561
Boone1481
Clay1330
Clarke1312
Allamakee1284
Mahaska11517
Shelby1140
Clinton1071
Poweshiek1048
Carroll961
Pocahontas941
Bremer926
Franklin890
Des Moines882
Henry863
Emmet850
Cedar821
Taylor790
Monona760
Cherokee751
Floyd722
Hardin700
Marion700
Guthrie664
Benton651
Sac630
Jefferson590
Osceola590
Jones560
Humboldt541
Butler532
Harrison530
Lee532
Hancock510
Iowa510
Buchanan501
Monroe506
Calhoun492
Delaware491
Fayette480
Madison452
Clayton433
Lyon410
Palo Alto410
Davis391
Winneshiek380
Grundy370
Mitchell370
Mills360
Howard350
Kossuth340
Lucas304
Greene290
Jackson290
Chickasaw280
Winnebago280
Union270
Ida230
Cass220
Appanoose203
Keokuk201
Page200
Van Buren200
Worth190
Audubon161
Unassigned160
Adair150
Ringgold150
Decatur110
Montgomery102
Wayne100
Adams80
Fremont70
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