Lawmakers unveil plan to replace GAMC

To ease the transition, GAMC will be temporarily extended through May.
March 07, 2010

General Assistance Medical Care is back on — well, sort of.
Gov. Tim Pawlenty, DFL and Republican leaders emerged from more than a week of debate Friday with a new plan that would replace GAMC with a trimmed-down delivery system managed largely by hospitals.
Under the plan, hospitals will form Coordinating Care Organizations, or CCOs, and will receive grants on a quarterly basis to provide care to the state’s poorest individuals.
The $71 million they’ll receive from the current budget, however, likely won’t cover the cost of patient care, providing incentive for them to refer patients to outside services, such as veteran’s assistance.
“It’s a new idea that bases health care more on results and less on the number of tests,” Sen. David Senjem, R-Rochester, said. “It was the most outstanding of any solution that I think we could have arrived at.”
While the plan may change in the coming weeks, Pawlenty said it represents a step forward in health care reform, “in a direction towards how we provide health care from an old way of doing it to a new way of doing it.”
To ease the transition, GAMC will be temporarily extended through May using $28 million from the Health Care Access Fund.
Those currently on GAMC will not be moved into MinnesotaCare, which will continue to provide coverage to adults without children.
The new plan will cost $164 million in the current biennium, less than one-fourth the projected cost if the program continued unchanged. Funding will come from the general fund and the Health Care Access Fund.
The proposal would also direct $45 million from the state’s general fund for prescription medication coverage in the upcoming fiscal year and $83 million in the following. Legislators say this will provide for the many GAMC patients who are mentally ill.
The bill would name 17 hospitals in the state to become CCOs, a collective that serves more than 80 percent of the GAMC population, Sen. Linda Berglin, DFL-Minneapolis, said.
Because hospitals will still experience uncompensated care, the plan may lead to higher premiums. Pawlenty highlighted three hospitals found to be particularly overburdened with providing indigent care that will undoubtedly increase costs: Hennepin County Medical Center, Regions Hospital and the University of Minnesota Medical Center, Fairview.
“Who’s going to pay? The people who already have insurance,” Rep. Tom Huntley, DFL-Duluth, said. “Their rates are going up because of this, what we’re doing here today.”
For the more than 131 hospitals not eligible to become CCOs, the agreement allocates $20 million toward a six-month Uncompensated Care Pool.
The bill provides significantly less money for hospitals than the previous GAMC plan that was vetoed by the governor, Berglin said.
“The reform in the bill, including the mental health reform, is all good, but I think it’s underfunded,” she said. “It’s hard to reform something if you don’t even have enough for more than shoelaces.”
If continued in its previous form, the GAMC program would have cost $750 million in the current biennium, $930 million in the next one and about $1.3 billion in the following biennium, Pawlenty said.
“One part of our state budget that is growing just absolutely out of control compared to anything else, or the growth in the private economy, is welfare programs, social service programs, publicly subsidized health care programs — particularly the last one,” Pawlenty said on his radio show Friday morning in response to a caller who accused him of disproportionately taking benefits from the poor.
The plan will still need House and Senate approval and the governor’s signature to become law. The Senate will start hearing the bill — and may even have it on the floor — next week, Berglin said.
GAMC was slated to end April 1 following two vetoes by the governor. At that point, GAMC patients would have been autoenrolled into MinnesotaCare.
The plan’s unveiling came only hours after a Ramsey County judge’s decision not to hear a motion to stop the GAMC shutdown.
Rep. Jim Abeler, R-Anoka, who voted for the GAMC plan and voted to sustain the governor’s veto a week later, said the additional negotiation was exactly what needed to happen.
“I think it’s a very good resolution to a very difficult problem,” he said. “It serves the greatest amount of need in a very vulnerable population.”

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