Minnesota will have universal healthcare coverage by July 1, 1997, but state lawmakers will wait until next year to decide who's going to pay for it.
Gov. Arne Carlson signed legislation last week that pledges universal coverage of residents under the state's landmark reform program, known as MinnesotaCare. The commitment was made despite strong opposition from lawmakers in his own Republican Party who wanted to get financing issues resolved before making a commitment to universal coverage.
"Next year will be the showdown at the OK Corral," said John Kingrey, senior vice president of the Minnesota Hospital Association.
MinnesotaCare had been approved by the state Legislature and governor in 1993, but the program at that time did not call for universal coverage. In addition, administrative rules and financing issues were left unresolved.
Hospitals and other healthcare providers have been paying a 2% provider tax on their gross revenues since Jan. 1, 1993, but that provides only 60% of the money for MinnesotaCare. The provider tax was expected to generate more than $70 million.
Lawmakers debated several other forms of revenue, including additional taxes on providers, sin taxes and an increase in the state's income tax, but none was approved. Mr. Carlson faces re-election this year, and many lawmakers said the Legislature wanted to avoid any new taxes in an election year.
MinnesotaCare, as originally written, called for the creation of large medical networks to begin operating on July 1, 1994, but state officials sought a three-year delay to iron out questions about funding and administrative rules.
So far, the revenue generated from provider taxes by MinnesotaCare covers 67,000 of an estimated 400,000 in- State reform
digent and uninsured Minnesotans. The program can't be expanded without more money.
The existing taxes-both provider and consumer levies-funding MinnesotaCare will raise $138.6 million in fiscal 1995, $163.1 million in fiscal 1996 and $190.8 million in fiscal 1997.
The bill making a commitment to universal coverage passed the Senate 36-25 and the House 70-61. "The closeness in the House and Senate votes shows the difficulty this legislation is having as more and more details are added," Mr. Kingrey said.
The bill permits the creation of healthcare cooperatives with as many as 50,000 enrollees. The cooperatives would allow providers to work together at a local level to set prices for their healthcare services.
"Providers can come together, set a price for a capitated product, and they can sell it without worrying about antitrust," Mr. Kingrey said.
In addition, the new law prohibits any person or corporation from restraining providers that want to form cooperatives.
Managed-care organizations known as community integrated service networks will now be permitted to enroll as many as 50,000 people. At least 18 CISNs are being formed in Minnesota.
The CISNs can be licensed by the Minnesota Health Department starting July 1 of this year and can begin offering healthcare Jan. 1, 1995.