Pawlenty Points To Minn. Health Law As Model For U.S.

This is the first in an occasional series about presidential candidates and their positions on health care.

GOP presidential hopeful Tim Pawlenty has scorned the health plans engineered by President Barack Obama and former Massachusetts Gov. Mitt Romney, even linking them with the term Obamneycare. Instead, the former Minnesota governor is brandishing a health plan his state passed in 2008 as a model for the nation.  

Pawlenty Points To Minn. Health Law As Model For U.S.(Photos by Gage Skidmore via Flickr)

Pawlenty, who was governor from 2003 to 2010, boasts that he “passed health care reform the right way. No mandates. No takeovers. If I could do it in Minnesota, we could do it in Washington.” While Romney and Obama were adding millions of uninsured people to a broken health care system, Pawlenty says he was getting to the root of the biggest problem – costs.

Critics, though, argue that it is too early to know whether that law will lower costs and that it does little to expand insurance coverage. Still others complain that while Pawlenty signed the law, he didn’t show much leadership in getting it passed.

Former Sen. Dave Durenberger, R-Minn., who first got to know Pawlenty when he was Durenberger’s driver, said it was Democratic legislators – not Pawlenty – who led the charge on the state law. “You have to put a priority on changing things,” he said. “You’ve got to provide leadership. He never did that.”

Some of the changes made by the Minnesota law can also be found in the later federal overhaul. The state changed the way that physicians, hospitals and other medical providers are paid, rewarding them for high quality care and for coordinating care for chronic conditions such as diabetes through health care “homes.” Also, for some conditions, medical providers are paid one fee to cover all the costs of related services. One pot of money, for example, pays for a patient’s knee replacement, from pre-operative services to anesthesia and rehabilitation. The federal law also contained provisions to pay providers more for high quality care and to test similar payment reforms.

The state law created a tool to compare costs and quality information and a program to encourage Minnesotans to stop smoking and to lose weight to prevent conditions such as cancer, heart disease and diabetes. In 2009, about 63 percent of Minnesotans were overweight or obese, and 17 percent used tobacco. The state estimates the program could bring 10 percent of overweight adults back to the normal range and get 6 percent of smokers to stub out their tobacco. The result could be $1.9 billion less in total health care spending by 2015.

‘Washington Must Act Now’ 

As Pawlenty seeks to gain momentum in the race for the GOP nomination, he is continuing his focus on costs and spending. He insists that the government must put an end to runaway expenditures on entitlement programs such as Medicare and Medicaid. He also says he supports high deductible health savings accounts in which consumers pay a large portion of their initial health costs but can put aside pre-tax income to be used to cover those expenses.

Pawlenty has said he supports the Medicare plan proposed recently by House Budget Committee Chairman Paul Ryan, R-Wis., that would raise the eligibility age from 65 to 67 and convert Medicare so that seniors are given support to help pay for a premium to a private plan. Currently, Medicare pays whatever is necessary to provide a set of specified benefits.

“Social Security and Medicare are on a pathway to insolvency and Washington must act now,” he said.  “We must get our fiscal house in order with real spending cuts and with real structural reforms that stop the spending spree before it bankrupts our country.”

But Pawlenty also told reporters in May that he would prefer to allow seniors to stay in the current Medicare system, if they wished, and to have other choices as well. He also wants to insure that doctors and other medical providers who are deemed to be providing high quality care get the highest pay.

He favors revamping Medicaid to give states block grants that allow them more flexibility to run the program as they see fit. Currently, states fund Medicaid jointly with the federal government. States operate individual programs, but must abide by a long list of federal requirements to get the federal money.

A Tax Pledge And Budget Woes

Pawlenty took office in 2003 after vowing not to raise taxes. But Minnesota faced a budget deficit of about $4 billion. He quickly reduced funding to many programs, including Medicaid, which gets coverage to low-income people, according to Brian McClung, who was Pawlenty’s spokesman at the time and is now a campaign adviser.

Unlike most states, Minnesota has traditionally enjoyed a high rate of insurance among residents, so Pawlenty was under little pressure to expand coverage. For low-income residents who didn’t qualify for Medicaid – mainly childless adults – the state offered two additional subsidized health insurance plans.

Still, say consumer advocates, it was a constant battle to maintain the state’s coverage levels. “The first place Gov. Pawlenty looked when there was budget trouble was cutting people off of health care,” said Liz Doyle, policy director of the consumer group TakeAction Minnesota.

By the end of Pawlenty’s second term, Minnesota still ranked high in coverage, but had lost some ground. Uninsured people accounted for 6.1 percent of Minnesota’s population in 2001, and 9 percent in 2009, half the national average, according to Minnesota government figures

To be sure, Pawlenty proposed both coverage cuts and expansions during his tenure, depending on the state of his budget at the time.

After his reelection in 2006, and anticipating a budget surplus, Pawlenty called for the state to create a health insurance exchange for people to use pretax dollars to buy health insurance for their kids and to offer lower premiums for children who got preventive care. But by 2008, the state was again looking at a deficit, and he dropped the idea.

Final Battle With Legislature

As he was positioning himself for a presidential campaign, Pawlenty was the subject of intense criticism in 2009, when he used his line-item veto authority to try to end the state’s General Assistance Medical Care (GAMC) program, which was then serving about 33,000 low-income adults. State expenditures were growing by about 30 percent every two years, according to McClung, who said that was because it was a fee-for-service-style program.

Pawlenty wanted to shift participants to MinnesotaCare, another state program for people without insurance. Consumer advocates and Democrats in the legislature fought the change because they believed that administrative requirements would make it more difficult for some people to remain covered. In the end, Pawlenty and the Democratic legislature agreed to change the program so that the state would give hospitals a set amount of money to care for eligible people in that area.

But that was unrealistic for thousands of people, said Doyle, because only a handful of hospitals chose to participate, shutting off access for those in other areas.

Durenberger calls Pawlenty a moderate in many areas and praises him for establishing a health care commission soon after he became governor to study the issue. But he is critical of aspects of Pawlenty’s approach to health care.

“Once he found that solution, he was like most Republicans,” the former senator says. “Arm everyone with a high deductible option and give them skin in the game and you have the answer.”

Marilyn Werber Serafini is the Kaiser Family Foundation’s Robin Toner Distinguished Fellow based at Kaiser Health News. The fellowship honors the late Robin Toner, The New York Times’ long-time health and politics reporter whose work often framed the public debate on health issues. KHN is an editorially independent news service for the foundation. 


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