Friday, February 20, 2009

Tim and Geoff go walking

butt hole road

Geoff Michel – Edina’s own Artful Dodger – gave a hearty thumbs up to Governor Pepsodent’s proposed budget for the next biennium. Hooray for the governor, says Geoff, because he realizes that salvation can only be obtained by suffering – by other people, of course. Behind all of Sen. Michel’s sophomoric sloganeering lies a core of chicanery and deceit. Geoff’s most odious remarks were directed to the issue of health and human services:

The governor also slows the runaway trains of our budget: health and human services and welfare spending. Without reform, these costs are scheduled to increase an unsustainable 22 percent in the next two years. As baby boomers near retirement, this part of the budget will suffocate our ability to focus on education and jobs. The one-time federal money in this area is not reform and merely delays the tough decisions for another budget.

No mention by Geoff of the fact that the increase is probably most attributable to all the people being driven into penury as a consequence of economic policies of the last eight years.

As for “runaway” welfare spending specifically, it amounts to about eight tenths of one percent (0.8%) of the Health and Human Services general fund spending. You could look it up. Governor Pepsodent probably makes bigger errors in the state’s checkbook every day!

But let’s get back to health care spending. Although the Medicaid program – for poor and disabled people – is administered by the state, it is funded with matching grants from the federal government. In fact, the feds are going to substantially increase the amount of these matching funds to Minnesota:

A new analysis of the American Recovery and Reinvestment Act by the Center on Budget and Policy Priorities indicates that Minnesota can expect to receive approximately $2 billion in increased Medicaid matching funds from the federal government from October 1, 2008 through December 31, 2010.

Three key features of the bill relating to Medicaid include:

    * A "hold harmless" provision ensures that any state whose base Medicaid matching rate, or FMAP, is scheduled to decrease in 2009 or 2010 would remain at the highest rate. The base rate varies by state depending on economic circumstances, ranging from 50% to a high of 75.84%;
    * Minnesota and all other states will have 6.2% added to their base FMAP. In our state, where the federal government pays 50% of Medicaid costs, the base federal share of assistance will increase to 56.2% during the period from October 1, 2008 through December 31, 2010;
    * States experiencing worsening economic conditions as indicated by a significant increase in their unemployment rates would receive an additional increase in FMAP. State economic conditions will be reviewed on a quarterly basis. Once a state qualifies for an additional increase, the higher FMAP would remain in place through at least July 1, 2010, even if unemployment conditions in the state improve.

Most importantly, to receive any increased FMAP, Minnesota's Medicaid eligibility levels must not be made more restrictive than they were on July 1, 2008.

In fact, as the above quote suggests, the percentage of reimbursement to the state will also increase until at least the end of 2010. As a consequence of the provisions of the recent federal act, even Governor Pepsodent has apparently admitted it is going to be hard to kick people off of Medicaid, at least in the near term!

So, where to turn, where to turn? Ah, we have it, says Geoff and Tim! Let’s kick 85,000 people off of Minnesota Care! (The middle section of Mike’s program at the link has a discussion of the figure.) That’s it! These are people who are just slightly too-well-off to qualify for Medicaid. A bunch of pikers, no doubt!

Now you may not know it, boys and girls, the participants in Minnesota Care do pay premiums on a sliding scale based on income. There is another important source of revenue for Minnesota Care, however; it’s the health care provider tax:

The Health Care Access Fund (HCAF) collects money through health care provider taxes and premiums from MinnesotaCare enrollees. Created in 1992, the HCAF was intended to provide low-cost health care for working Minnesotans, so use of these funds for other purposes is controversial. However, the HCAF is a popular place to look for additional resources whenever the state faces a budget deficit.

This year is no exception. The Governor's supplemental budget draws $250 million outright from the HCAF and transfers it to the general fund to help fill our $935 million budget hole for this biennium. That part is obvious.

The quote refers to the current biennium, but Governor Pepsodent plans the same thing next biennium:

So, between the $250 million transfer and the $149 million refinance - the HCAF is contributing $399 million over the next three years to help solve our budget deficit. Want to see for yourself? Then take a look at the information from the Department of Finance.

This, boys and girls, is vintage Pepsodent:

Nearly every year he's been in the governor's office, Pawlenty has sought to raid the surpluses in the Health Care Access Fund to pay for general fund programs, successfully diverting more than $400 million in HCAF that way during his first term, and borrowing $50 million more for health care reform during the last session. But the fund was created in 1992 specifically to underwrite MinnesotaCare, a program designed mainly to insure working families whose employers don't provide coverage. The source of this dedicated funding is a 1 or 2 percent tax on health providers and health plans, and a sliding scale premium on MnCare enrollees.

According to the same Politics in Minnesota report:

In light of this session's historic budget deficit, Pawlenty saw an opportunity to eliminate the freestanding HCAF altogether by folding its revenues into the general fund. That's a pretty slick trick: Not only does the governor want to cut state payments to health providers by 3 percent, he wants to take the 2 percent tax they are paying to make sure middle class workers have insurance and use it to fulfill the state's legal obligation to insure the poor and disabled through Medicaid.

This would relieve the likes of Governor Pepsodent and Geoff Michel of having to bear the obloquy of continuing to raid a revenue stream that is supposed to be dedicated to providing health care to poor people.

When you hear Geoff Michel’s lament that health care spending is swallowing the state budget, you must recognize, boys and girls, that it is exactly the other way around: the state budget is swallowing health care. “Health care” is actually running a surplus.

The providers, who are paying this tax (and who have to pass it along to consumers, of course) have so far held off showing up at the Capitol with pike poles and pitchforks, but the day is coming:

The MMA [Minnesota Medical Association] strongly opposes using the Health Care Access Fund as a slush fund to pay for projects unrelated to health care or to balance the state’s budget.

When words are confined to those used in polite company, it is impossible to adequatey describe the reprehensible and reptilian shenanigans of Governor Pepsodent and his fellow travelers like Geoff MIchel on the budget and funding for health care in particular.

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