Minn. budget deal postpones key Medicaid decision

Minnesota's Democratic-controlled legislature ended a budget standoff Monday with Republican Gov. Tim Pawlenty that focused on an impasse over Medicaid policy, The Wall Street Journal reports. "The deal, which eliminates a $3 billion deficit, gives Mr. Pawlenty or his eventual successor the power to decide whether to shift thousands of low-income Minnesotans from a state health-care plan to Medicaid ahead of a federal timetable." Democratic lawmakers had pressed to include that shift in the budget, but Pawlenty resisted. The governor, however, dropped a plan to cut $114 million in health care cuts as part of the deal (Merrick, 5/17).

The New York Times describes the standoff: "On one central and divisive question of health care coverage, lawmakers agreed to let Mr. Pawlenty — and later his successor — decide whether to extend Medicaid coverage to more poor Minnesotans, a notion that some Republicans have mocked as Obamacare and that Mr. Pawlenty has indicated he considers a bad idea." Pawlenty is not running for reelection as governor, and "in a way, despite all of the hours of talk, some of the largest questions were pushed off to next year, after Minnesotans choose a new governor and the politics simmer down." The debate lasted through the night Sunday and into Monday (Davey, 5/17).

The deal is viewed as a victory for Pawlenty, Time reports. "After using his political power as the state's Republican leader and his veto power as governor, Pawlenty has notched a massive state budget victory that Politico's Ben Smith says lays the groundwork for the governor's assumed 2012 presidential run." The deal codified many cuts Pawlenty had attempted to make unilaterally (Pickert, 5/17).

"House Speaker Margaret Anderson Kelliher, the endorsed Democratic candidate for governor, said if she wins in November one of her first acts would be to sign the state up for the Medicaid program," the Associated Press reports. "She said joining the program would help Minnesota recover a larger share of the tax dollars it currently contributes to Medicaid, create more healthcare jobs and cover more uninsured Minnesota residents" (Lohn, 5/17).

In the meantime, "[e]ven as legislators ended a grueling session Monday with a compromise over a contentious health care bill, the state began mailing letters telling 39,000 very poor, childless Minnesotans that their health coverage will change on June 1," The (Minneapolis) Star Tribune reports. "Problem is, nobody knows precisely how it will change -- not doctors, not hospitals where care now will be centered, not legislators or Gov. Tim Pawlenty, who together struck the late-night deal." Cuts to the existing state health program--the one the Medicaid shift would have partly absorbed--will mean only care provided through hospitals will be paid for. Only four of 148 hospitals in the state have agreed to accept patients under the change, and will be paid roughly half of what they received for such patients last year (Wolfe, 5/17).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.