Pawlenty seeks open competition for health coverage

ST. PAUL, MN. -- Governor Tim Pawlenty said Tuesday he'd like to see Minnesota become the first state in the nation to allow consumers to buy health insurance from companies in other states. The move, which would require legislative approval, was part of a set of proposals designed to drive down health care costs.

"I'm going to ask the legislature to change the law so that Minnesotans can go into the national health care marketplace and purchase their health care from a variety of states and vendors," Pawlenty told reporters at the State Capitol.

The governor predicted lawmakers may be in the mood to drop their long-held resistance to the notion of national companies selling health coverage directly to Minnesotans.

"I think people are now more open minded about health care reform, market place choice and competition as a way to drive quality and save money," Pawlenty explained, "So my hope is that the legislature would look at this anew rather than reject it out of hand."

Senator John Marty, a Roseville Democrat, said Minnesota's current regulation of health care recognizes that cheaper plans offered by for-profit companies wouldn't necessarily deliver value to customers.

"We've got fewer uninsured people here than other states," Marty told KARE, "And so why would we want to import problems from other states? Some of these companies would find a way to advertise the lowest prices but they'd come in here and say everything's a pre-existing condition."

Marty, a long-time advocate of universal health coverage who is running for the DFL nomination for governor in 2010, did not accept Pawlenty's contention that shopping across state lines would lower costs six percent for average customers.

"Currently companies, if they are selling in Minnesota directly to consumers, have to be nonprofit. Why we want to allow more profit making out of the health care system? I just don't think that makes any sense."

Reforms for public plans

Pawlenty also announced two initiatives aimed at curbing the cost of government-subsized health programs known as Medical Assistance and Minnesota Care, a plan for the working poor financed in part by fees paid by medical providers.

The governor proposes requiring those some of those enrolled in Minnesota Care to pay deductibles and co-pays, to encourage them to cut down on what he called "random medical treatment." Members would be issued electronic benefit transfer (EBT) cards to spend on co-pays and deductibles, but if they were to spend it too fast they'd have to pay for part of their care that year out of pocket.

"The current system is a wild west system," Pawlenty remarked, "Where individuals have no incentive as to how they use it as to cost and quality, and the costs are running out of control."

Sen. Marty predicted co-pays would also have a rough ride in the Minnesota, because it would tend to discourage people from seeking care.

"The governor's idea of reform is to make sure people use less health care," Marty remarked, "We've got 45,000 people dying in this country every year from lack of health care. Somehow we're going to make sure people don't use as much and that's going to help?"

Health and Human Services Commissioner Cal Ludeman said the real goal of the proposed deductibles and co-pays is to pressure MnCARE members to use primary care clinics and providers. Those providers are considered essential for reining in medical costs because they can coordinate a patient's treatment and avoid duplication and waste.

Pawlenty's third major proposal is to give those in public health plans an incentive to use providers who've been ranked highly by the state for offering lower-cost, high quality care. If members use clinics with favorable state rankings, the governor said, they'd be given extra credit on debit cards that could be used for other medical expenses such as eyeglasses.

The Minnesota Department of Health is currently contracting with a company in Maine to rate doctors and clinics, with those ratings scheduled to be released in September of 2010.

Pawlenty, who has been an outspoken critic of President Obama's national health care reform efforts, said it was a coincidence that he launched his set of ideas the same day the Senate Finance Committee was set to vote on the health care overhaul bill.

State lawmakers can't take action on any of Pawlenty's proposals until the 2010 session, which begins in February. If enacted the changes would take effect in 2011.

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