A dirty bill of health: Pawlenty’s health care cuts would soon cost more than they save

Viewed strictly through the prism of balancing Minnesota’s general fund portion of the state budget for the 2010-11 biennium, Gov. Tim Pawlenty’s decision to propose drastic cuts in state-supported health care insurance makes sense. Health care costs are rising faster than any other sector of the budget, and the general fund is already facing a real-dollar deficit of at least $5.5 billion over the next two years. Even if a significant portion of expected federal stimulus money is directed toward Medicaid, it will be difficult for legislators to get out of this session without cutting health care and/or raising state taxes. Pawlenty has chosen to ignore a state tax increase. That leaves health care cuts.

But when it comes to creating a health care system that delivers the most efficient, effective care for Minnesotans, Pawlenty’s proposed cuts would quickly come to cost more than they save. They would renege on the state’s commitment about how it will use taxes collected from Minnesota health care plans and providers. And the negative impact of the reductions would fall disproportionately on the middle class.

Begin with the ultimate cost of the cuts. Although reducing health care coverage and payment rates to hospitals and doctors would help balance the general fund budget, the gambit would not only shift the burden of paying for health care, it would inflate it. Under Pawlenty’s proposal, approximately 84,000 people now receiving state supported health insurance would be deprived of coverage. Another 29,000 who would become eligible for coverage over the next two years under the program’s current terms would be denied enrollment. Lacking health insurance won’t prevent these folks from getting sick, of course. On the contrary, study after study has shown that people without coverage are more likely to postpone cost-effective check-ups and other preventive treatments until they are felled by a condition significant enough to warrant a trip to the hospital emergency room.

Hospitals budgets are currently under siege from all sides. State and federal payments for Medicaid and Medicare patients have fallen below the cost of treatment. The sour economy has hammered folks whose insurance comes with a high deductible. And, not surprisingly, people knocked off state-supported health insurance are more likely to default on their medical bills. Consequently, the cost of uncompensated care provided by Minnesota’s 153 hospitals has more than doubled, from $258.2 million in 2003 to $601 million in 2008.

6 Responses to “A dirty bill of health: Pawlenty’s health care cuts would soon cost more than they save”

1. Holly Cairns Says:
   February 2nd, 2009 at 12:26 pm

   Now thats the voice of reason. Thanks, Britt. Money talks.

   While I am at it, universal health care will cost less in 5 years, and we have good worldly programs to choose from and make better (if we decide to make them better! And we are Americans, and so we will!).

   They may have big lines in other countries, but we have a lot of folks who can’t even get in line. And who pays, later? We all do. The health care clock is ticking, and we’d better figure this out pronto.

2. Anonymous Says:
   February 3rd, 2009 at 1:30 am

   Never knew health care would be this problematic. Government-based health care is supposed to help, not hinder. It’s supposed to cost less, not cost more.

3. Anonymous Says:
   February 3rd, 2009 at 6:29 am

   Government-based health care (as opposed to the cartoonish thing contained in your link) does help literally hundreds of thousands of people in Minnesota. We remain a state with one of the lowest uninsured rates in the nation, a fact which strengthens our economy and fabric of life. To the extent it costs more instead of less it is because (in the short term) the economy is cratering and (long term) people are living longer.

4. Anonymous Says:
   February 3rd, 2009 at 3:09 pm

   When will those Minnesotans who still think Pawlenty is “our charming young governor” and apparently approve of his policies realize that they, too, could become his victims. Only the no-tax pledge counts. Low-wage workers obviously don’t, since he has illegally taken their premiums and the 2% provider fees paid to help finance their MinnesotaCare health insurance several times to balance his budget. Any of us could lose his/her job and either become unemployed or get a $5-$10 per hour job to avoid starvation. But, guess what, we wouldn’t be able to sign on to MinnesotaCare because the gov obviously thinks we would be “taking” health care we refuse to pay for and anyhow, don’t deserve because of our “poor choices.”

5. Anonymous Says:
   June 19th, 2009 at 11:14 pm

   If this is the best plan that Gov. Tim Pawlenty can write, then Minnesota is deeply in trouble.

6. Jake Wasson Says:
   December 18th, 2009 at 3:12 am

   Has this stance changed in light of the health care reform for the federal system that is at stake? It always seemed to me that MinnesotaCare and our state run system offered a ray of hope for what the federal plan could emulate to work and save money. With Pawlenty cutting those that need the protection of the universal health care the most, it shifts burden back to the corporations as they are already losing money from medicare/caid. What a foe to useful progress. This is the sad reality of our democratic system, something good gets butchered over time before it has a chance to evolve and succeed.