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Minnesota lawmakers trade ideas, jabs on health care costs

ST. PAUL — Health care was a top issue during the 2018 campaign and Minnesota lawmakers have wasted no time detailing their ideas for improving the system by making it more affordable and accessible.

The challenge is Republicans and Democrats have vastly different ideas on the best ways to accomplish those goals.

Members of the Republican-led Senate on Wednesday, Jan. 16, pitched the idea that patients with better relationships with their doctors and a clearer understanding of the price of procedures and drugs would lower overall health care costs.

“We’re not tinkering around the edges,” said Sen. Scott Jensen, R-Chaska. “These are bold, innovative ideas that will dismantle some of the biggest cost drivers in our health care system.”

On the other hand, bills supported by the Democratic-Farmer-Labor Party in the House would continue a 2 percent tax on health care providers, open MinnesotaCare to more residents and keep the cost of prescriptions affordable by stopping “price gouging.”

GOP proposals

Legislation detailed Wednesday by Senate Republicans would:

  • Allow primary care physicians to charge a flat monthly fee for unlimited visits and other consultations.

  • Make pricing of procedures more transparent and easier to understand and allow patients to shop around, even if a provider is out of network.

  • Regulate pharmacy benefit managers that insurers use to negotiate drug prices with manufactures.

“One thing we hear so much from people is they want to be connected to their doctor,” Sen. Mary Kiffmeyer, R-Big Lake, said of improving access to primary care providers. “This is an excellent opportunity to have more personal doctor-patient relationships.”

Price transparency and the ability to shop around for care is important, too. But drug prices are one of the largest drivers of expenses.

Jensen said prescriptions now account for nearly 30 percent of care costs. Pharmacy benefit managers, or PBMs, need better regulations and oversight to rein in some of those expenses, the Chaska physician said.

Dems’ philosophy

Senate Republican proposals are only a piece of the legislative puzzle. Democrats, who control the House, and Gov. Tim Walz have competing philosophies about how to lower costs.

On Tuesday, House Democrats faced criticism from Republican members over their proposals to continue a 2 percent tax on health care providers and open MinnesotaCare, the insurance for the working poor, to anyone on the individual market who wants to sign up. Walz also supports these ideas.

Democrats argue the provider tax is an essential revenue stream for keeping health care accessible and affordable. They say their MinnesotaCare buy-in proposal would give people now unable to afford insurance on the individual market a lower-cost public option.

Tax debate

State Rep. Kurt Daudt, R-Crown, the House minority leader, said reinstating what he calls a “sick tax” that’s due to expire at the end of the year amounts to a tax increase. Daudt and his colleagues also argue expanding MinnesotaCare will devastate rural doctors and hospitals because they cannot afford the lower reimbursement rates public programs pay.

“You don’t lower health care costs by raising health care taxes,” Daudt said.

Republicans want to let the tax expire. They say the revenue can be made up in a number of other ways including using existing resources or lowering spending by combating fraud and abuse in public programs.

DFL House Majority Leader Ryan Winkler, of Golden Valley, countered that Democrats would use “math, not magic” to address health care costs.

“What we’ve seen from Republicans for too long is health care costs dealt with magic solutions that don’t actually work,” Winkler said.

Democrats argue continuing the provider tax isn’t a tax increase but the continuation of one. They also say the state can use direct contracting with hospitals to eliminate some of the financial strain they might face if MinnesotaCare is expanded.

Rhetoric aside, if the tax and the $700 million in annual revenue it raises go away, lawmakers will either have to replace that money or adjust spending.

The provider tax currently helps fund MinnesotaCare, other public health programs, efforts to improve access to treatment and a reinsurance program that helps keep individual market premiums affordable. Money from the tax also goes into the general fund.