The House health care bill and Minnesotaby Elizabeth Stawicki, Minnesota Public Radio
St. Paul, Minn. — The House passed its version of health care reform on Saturday, and certain elements of the bill may affect how things are done in Minnesota.
The major parts of the bill say insurance companies can't deny coverage for pre-existing conditions, the uninsured can find coverage using a new health insurance exchange and that total out of pocket expenses would be capped. As part of the health insurance exchange, the government would offer its own health insurance plan called the public option.
The bill would require everyone to have health insurance and require most businesses to provide it. There are penalties for those who don't sign up for health insurance coverage and for businesses that refuse to provide it for their employees.
One major issue for Minnesota is the current differences in how the federal government reimburses doctors and hospitals who treat patients on Medicare and Medicaid. Many Minnesota lawmakers have argued that the current system penalizes Minnesota because it provides high-quality care at lower prices than other parts of the country.
Some Minnesota House members, notably Collin Peterson, say the House bill doesn't go far enough in equalizing these disparities. The House bill would require the Institute of Medicine to conduct two studies that analyze payment differences and design a new system to standardize payments. The federal government would carry out the Institute's recommendations unless Congress disapproves, a solution Rep. Betty McCollum helped design.
It's unclear how the House plan would affect Minnesota's health insurance programs such as MinnesotaCare and Medical Assistance. MinnesotaCare is a publicly subsidized program for Minnesotans who don't have access to affordable health care coverage, and whose average monthly enrollment in 2008 was 114,000.
The House plan creates a similar subsidized insurance system that would include more people than that in Minnesota so it's possible it could save the state money.
Medical Assistance is Minnesota's Medicaid program and covers an average of 527,000 low-income senior citizens, children, parents, and people with disabilities each month. It's jointly funded by the federal and state governments. The federal government's share was $3.1 billion in 2008; the state's share was $3 billion.
The Minnesota Department of Human Services said there are so many moving parts to the House reform legislation that it's too early to predict whether Minnesota will see a net loss or a net gain. The state legislature will ultimately have to sort that out if Congress passes a health care overhaul bill.
One of the ways the House bill funds reform would be a tax on high-income earners. Individuals who earn annually more than $500,000 or couples making $1 million or more would have to pay a so-called "health care surcharge."
In Minnesota, there are are about 8,000 households that would be affected or about .03 percent all the households in the state. Those in that income range would see their taxes go up by another 5.5 percent.
The House bill also imposes a tax on medical device makers. The House bill calls for a $20 billion fee on medical device manufacturers that would begin in 2013. That's about half the size of a tax being debated in the Senate.
The state's congressional delegation has opposed the tax increase because they say it would result in job cuts for medical device makers with a large presence in Minnesota. Supporters of the tax say expanding health coverage would create new business for the device manufacturers, and it make sense to ask them to help pay for the program.
Minnesotans would also see a change in what's called age-rating. This allows insurance companies to charge older individuals seeking insurance on the open market and some who work for small companies more solely because of their age. In Minnesota right now, insurance companies can charge those aged 50 to 64 three times as much as a younger adult. The House bill would cap age-rating at twice as much.
Passing the house bill was a significant step but only one step. It's now up to the U.S. Senate to merge its bills on health care reform. Senate Majority Leader Harry Reid, D-Nevada hinted the Senate might not be able to finish its work by the end of the year.
Several senators say the final version of a health care bill is likely to be dramatically different from the plan passed by the House.