Minnesota Senate Democrats have proposed a new state surcharge on HMOs and nursing facilities to help pay for health and assistance programs.
The Senate's health and human services budget bill contains $11.3 billion in spending to provide health care and other services to low-income people. The bill's sponsor, Sen. Tony Lourey, told the St. Paul Pioneer Press that he was trying to slow the rate of growth in spending on those programs but he included some revenue generators to avoid steeper spending reductions (http://bit.ly/11bkrsF ).
Lourey's proposal raises $80 million from the HMO surcharge and $16 million from the nursing facilities surcharge over the next two years. It also takes about $400 million from a state health care fund that's fed by a tax on doctors, and it repeals a 2019 sunset provision on that tax.
That money from what's called the Health Care Access Fund would be used to fund general health programs. Previous proposals to make a shift like that have met criticism since the fund was created specifically for MinnesotaCare.
"I've been one that's criticized it myself," said Lourey, of Kerrick. He called his proposal "not a perfect budget" but said it reflects the desire of DFL legislative leaders to keep a lid on rapidly growing healthcare costs.
A separate health and human services bill from House Democrats would raise a smaller sum from HMOs by putting a cap on financial reserves at insurance companies that serve patients on public programs. The House alternative also includes a surcharge on Minnesota hospitals that would raise $100 million over two years; that's not in the Senate bill.
Still, HMOs and the lobby group for doctors objected to the state raising money from them. By lifting the 2019 repeal of the provider tax, the Senate bill would reverse an agreement two years ago between Gov. Mark Dayton and the Republican-controlled Legislature to sunset the tax.
"This is a regressive tax on health care that falls most heavily on the sick and adds to the overall cost of care," said Dan Maddox, president of the Minnesota Medical Association. A representative of the Minnesota Council of health Plans said the HMO surcharge would raise premiums for nearly 900,000 Minnesotans who get their coverage through HMOs.
The Senate health spending bill was being reviewed in committee on Tuesday. The House health spending bill passed out of committee last Friday and awaits a vote on the House floor. Once the House and Senate have both passed their proposals, lawmakers from both chambers will produce a final version in conference committee.