Expansion of health care coverage in Minnesota likely to face veto from governor

House and Senate conference committee members worked dozens of hours over the past week to iron out their differences in the massive health and human services spending bill.

The House had an ambitious goal this session of insuring all Minnesota kids. The Senate preferred a broader approach that would provide coverage to more kids and adults.

Their compromise adds 78,000 Minnesotans to the state health insurance rolls by 2011. About half of those covered would be kids. The bill also waives MinnesotaCare premiums for a year for members of the military and their families.

The proposal also contains a 3 percent cost of living adjustment for state workers and a 3 percent increase for nursing homes. These initiatives, along with many others in the bill, would cost the state an additional $588 million during the next two-year budget cycle. That price tag jumps to $918 million in the following biennium.

Most of the governor's initiatives are in the bill. There's no reason the bill should be vetoed."

During a news conference about the bill, DFL Sen. Linda Berglin was asked if lawmakers were being defiant by passing a bill that clearly exceeds Gov. Pawlenty's budget wishes. Berglin replied that the bill actually costs less than House and Senate lawmakers projected it would before going into their negotiations.

"We're under our tails target by almost $40 million. Clearly the bill will not increase taxes in the future. Obviously many, many -- most of the governor's initiatives are in the bill. There's no reason the bill should be vetoed," Berglin said.

But during a news conference a few hours later. Gov. Pawlenty told reporters he will do exactly that.

"I hope they get that bill to me as soon as possible. It will be vetoed as soon as I get it," Pawlenty said. "It spends dramatically more out of the general fund than we had recommended. It uses the Health Care Access Fund significantly different than we had recommended. It adopts some, but not many, of our policy reforms and health care reform initiatives. And so it is fiscally in a different galaxy and from a policy and reform standpoint, dramatically underwhelming."

After the governor's threat, the House added its approval to the Senate's, voting 82-44 to send it to the governor.

Berglin said if the governor vetoes the bill, lawmakers will begin working on a new proposal. But she didn't have much to say about how lawmakers intend to address his spending complaints, other than to say, "we'll cross that bridge when we come to it."

Jim Koppel, who directs Children's Defense Fund Minnesota, says lawmakers shouldn't cave in to the governor's demands. Koppel says the bill is not perfect since it doesn't cover all kids. But he says it's a good start toward that goal. If lawmakers are forced to restructure the bill, Koppel thinks they should respond by upping the ante.

"I think they went out of their way to make changes to accommodate him so they could get his signature. And if he isn't willing to sign that, they might send something up there that we initially wanted more, which is to cover more children," he said.

But it's not clear if lawmakers will be willing to raise the stakes. Rep. Tom Huntley, DFL-Duluth, says it's not hard to say you want to insure more Minnesotans. But it is hard to find ways to save money in the health care system so that covering more people doesn't bankrupt the state.

"Everybody has their entrenched interest, whether it's the health plans or the providers or the hospitals. And none of them really want to change because they've figured out what their niche is and how to make money, and to change that entrenched system is a very difficult thing to do," he said.

Huntley says the bill does have some reform measures to try to control health care costs, but several of those measures are only pilot projects at this stage. An earlier proposal to cap health insurance premium increases was left out of the bill.

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