Bill seeks statewide health insurance pool

"FEATURE STORIES"

02/07/2007

Brad Swenson
Bemidji Pioneer - 02/02/2007


Proponents of statewide health insurance pool say cutting out the middleman will put doctors and patients back in charge of health care decisions.

And it could lower health care premiums and cut administrative waste in the health care system.

“We all need health care, it’s a life or death matter,” state Sen. Mary Olson, DFL-Bemidji, said Thursday in a telephone interview. “It’s important to our welfare and to our well-being. We have limited dollars to spend on it, so we need to use them wisely.”

Olson is the chief author of a bill which calls for a study to determine the best way to implement a statewide health plan purchasing pool, designed with a “fee-for-service” reimbursement system that provides comprehensive coverage and finds “best practices” for containing costs of health care by making sure patients get necessary tests and procedures.

It isn’t universal health care, but it moves in that direction by opening up health coverage to all Minnesota ns by using economies of scale, Olson said. Plus, the state-run program takes out the middleman — HMOs and insurance companies — which have profit as their driving force.

Olson, a freshman lawmaker, held her first news conference at the State Capitol on Thursday to introduce her bill, which is co-authored by another freshman, Sen. Sharon Erickson Ropes, DFL-Winona.

The two have been working on the bill since when they first met after the November election and found that they had similar views on solving the health care crisis. Olson’s background comes as an attorney working with clients on their health insurance, and Erickson Ropes as a nurse whose husband is a doctor.

“It was very much a joint effort in putting this together,” said Olson, who will formally carry the bill. “A lawyer and a nurse whose husband is a doctor from opposite ends of the state are recognizing the same issues, the same problems, especially in rural Minnesota.”

Erickson Ropes, a t the news conference, highlighted the bill’s key features, especially that it isn’t state-subsidized health care.

“Everyone knows that Minnesota is in a health care crisis,” she said. “In the U.S., we pay two times as much as the next most expensive nation for our health care. … We believe creating a statewide pool is one step to bring people toward affordable health care.”

The statewide health insurance pool would be a “non-publicly subsidized, self-sustaining system,” Erickson Ropes said. “I’m sure the governor would like that idea.”

It would be open to all Minnesotans to buy into a statewide pool, she said, with those initially targeted middle-class people who are self-employed or own small businesses and are outside of employee pools.

The plan would be optional and portable, meaning that the coverage travels with the individual going from job to job.

“It’s also affordable,” she said. “We believe that if the state does the purchasing, throug h a statewide pool, that we will be able to lower premiums and give better benefits than the private sector.”

Olson, in the interview, also said the plan would take control of health care decisions away from insurance companies and HMOs.

“We believe that all of the oversight that was brought into play through the HMO managed health care system, and all of the profit within certain private insurance that is allowed to reward their CEOs with multi, multimillion-dollar bonuses — those are all dollars coming out of patient care,” Olson said.

“If we can recapture that waste and put it directly into serving patients, it’s something we’re hearing from physicians and nurses who support us because it returns to them control over what their patients need,” she added.

Doctors can best decide what is needed for their individual patients, while HMOs offer a one-size-fits-all plan, Olson said. “They take a lot of money out of the system for supposedly managing that care, and that’s money that isn’t available to treat people and sometimes not even as cost-effectively as the service could be provided.”

A statewide pool would be important in rural Minnesota, she said, as many small businesses can’t afford to offer their employees health insurance. This way, they could offer to subsidize a worker’s entry into the pool and then stay competitive with larger businesses or more urban businesses that can afford health plans.

A self-sustaining pool is also better than the current state-subsided MinnesotaCare program, which Olson said has eligibility limits that force people to stay in low-wage jobs.

“People have told me they cannot afford to take a raise if they are already on MinnesotaCare,” Olson said. “That raise would prevent them from eligibility, and would end up costing them more than if they hadn’t received the raise.

“What we’re doing is artificially suppressing wages in our area because of the large percentage of people we have on MinnesotaCare. We’re placing more pressure than we need to on the tax structure by subsidizing more health care than we would have to simply because people can’t afford to lose MinnesotaCare and have nowhere else to go that is affordable.”

The bill, referred to the Senate Health, Housing and Family Security Committee, creates a health plan purchasing pool study group with a charge of making recommendations to the Legislature by Feb. 1, 2008. Besides the chief House and Senate authors of the bill, the study group would include the four chairs of Senate and House panels that handle health policy and budget issues, the attorney general and three members representing health care providers. One would be appointed by Gov. Tim Pawlenty, another by House Speaker Margaret Anderson Kelliher, and the third by a subcommittee of the Senate Rules and Administration Committee.

The charge to the panel would be to make recommendations related to the creation, maintenance and funding of a voluntary, statewide health plan purchasing pool to provide comprehensive, cost-effective and medically appropriate health coverage to all public and private employees in Minnesota and all Minnesota residents.

An independent public entity would be created to administer the pool, and the study group would recommend eligibility and participation requirements for existing public and private care purchasing pools, public and private employees and state residents. It would also design a fee-for-service plan to provide coverage, as well as for comprehensive drug benefits.

The pool would be allowed to contract directly with health care providers to provide coverage to enrollees.

“We will study this over the next year, we want to put this concept on the table,” Olson said. “People are demanding at the grass-roots level that we have some sort of universal coverage. They see that other countries have this, and in many cases that health c are is more accessible to them, more affordable, and quality of care measures are actually better.”

Through a statewide pool, “we want to offer and put on the table a plan that puts patients first,” the Bemidji Democrat said, “rather than insurance company profits.”

The bill as yet has no House companion, but Olson said several representatives have offered to do so. Senate co-sponsors include Republican Sen. Paul Koering of Fort Ripley, DFL Sen. Patricia Torres Ray of Minneapolis, and DFL Sen. Linda Berglin of Minneapolis,

Berglin and Sen. John Marty, DFL-Roseville, who was also at Thursday’s news conference, chair the Senate’s policy and budget panels that consider health issues.

Speaking in favor of the bill at the news conference were a small business owner from Hastings and a St. Paul family physician.