House Speaker Margaret Anderson Kelliher, the DFL-endorsed candidate for governor, says the state should move early to shift thousands of low-income residents from two state programs into Medical Assistance, Minnesota’s Medicaid program.
It’s a good idea because it will bring money back to the state, she said in a May 25, 2010, press conference.
“For every dollar we put in, $7.50 [will come] back to the state,” Kelliher said.
Kelliher’s statement falls into a grey area. Minnesota will be getting a lot of federal money, but her statement is misleading because it implies an impressive return on investment.
Kelliher wants to shift people who get health insurance from two state programs–General Assistance Medical Care (GAMC) and MinnesotaCare–into Medical Assistance (MA).
The state and federal governments split the cost of MA. The other two programs don’t get any federal funding.
The new federal health care law expands Medicaid coverage to low-income people who don’t have insurance now–the same kind of people the state now pays to cover under GAMC and MinnesotaCare – and requires the federal government to match state spending.
For Minnesota, this means shifting patients from GAMC and MinnesotaCare into MA, effectively dissolving most of the two programs that would otherwise cost the state about $1.2 billion over the next three years.
The shift also translates into $1.4 billion in federal dollars. Because the state will have to match federal Medicaid money it will still have to spend the $1.2 billion, plus another $188 million.
The reason the cost goes from $1.2 billion to a combined state and federal total of $2.8 billion is because MA would cover many more people than the two state programs do now and provide enhanced benefits. Under the new federal law all states will have to expand Medicaid in 2014.
On one hand, the plan sounds like a good deal for Minnesota. Kelliher is correct that for every new dollar the state invests in MA, $7.50 in federal funding will come back to Minnesota.
But Kelliher’s statement glosses over the important point that the state will spend $188 million in addition to the $1.2 billion it would otherwise spend on GAMC and MinnesotaCare. All told, the state will have to expend the same amount as the federal government.
As a result, Kelliher’s claim is inconclusive.
Minnesota Public Radio News, Kelliher on the MA opt-in, May 25, 2010
Minnesota Public Radio News, Federal health law becoming an issue in governor’s race, by Tom Scheck, May 25, 2010
Minnesota Department of Human Services, Medical Assistance, accessed June 3, 2010
The Kaiser Family Foundation, Medicaid Coverage and Spending in Health Reform, by John Holahan and Irene Headen, May 2010
The Kaiser Family Foundation, Financing New Medicaid Coverage Under Health Reform: The Role of the Federal Government and States, May 2010
The Minnesota State Legislature, health care budget details, accessed June 5, 2010
E-mail Interview, Matt Swenson, Spokesman, Margaret Anderson Kelliher, June 3, 2010
E-mail Interview, Karen Smigielski, Communications Manager, Minnesota Department of Human Services, June 4, 2010
Phone Interview, Stephen Parente, Professor, Carlson School of Management, June 3, 2010
Phone Interview, Martha Heberlein, Research Analyst, Georgetown University Center for Children and Families, June 4, 2010
Phone Interview, Lynn Blewett, Director, University of Minnesota’s State Health Access Data Assistance Center, June 4, 2010