Insurance for poor adults survives budget cuts, barely

Minnesota is sticking with its General Assistance Medical Care program -- for now.

GAMC provides health coverage for poor, single adults and childless couples. It has been eliminated, revived and revised numerous times as lawmakers and the governor worked to balance the state budget before Monday's adjournment.

Some last-minute negotiations pumped an additional $10 million into the program. But in the end, GAMC is still taking a more than 75 percent funding cut.

The GAMC revisions will force hospitals to make due with a lot less money, while still serving all of the program's 30,000 enrollees.

The changes to GAMC mean different things to different hospitals.

At Ridgeview Medical Center in Waconia, CEO Robert Stevens says his hospital will have to tap a pool of state money set aside for uncompensated care in order to cover the cost of GAMC patients.

Stevens doubts the $30 million dollars in that pool will last very long. "Right now we're anticipating that we'll be writing off almost all of the care that's provided to those patients out here," he said.

Stevens estimates that Ridgeview's GAMC care bill will add up to about $700,000. That's a lot of money for a small hospital to absorb," he said. "On the short-term we're prepared to provide that care to those patients. But it's not sustainable over the longer term. We need some resolution to that program."

Ridgeview Medical Center isn't alone in that assessment.

Lawrence Massa, president of the Minnesota Hospital Association, which represents nearly all of the state's hospitals, said his group is disappointed.

Massa says hospitals will do their best to adapt to the changes in GAMC, but it won't be easy. Larger hospitals have been asked to join a coordinated care delivery system -- meaning the hospital would would get a lump sum of money to care for a certain number of GAMC patients.

Once that money is gone, hospitals will have pick up the tab on any additional patient expenses. Seventeen large hospitals qualify for inclusion in the system, but only 4 metro hospital have signed up for the program so far.

Massa says he doubts any more hospitals will join the system because it's so financially risky.

"I think there's still a lot of question about whether that program will work and now we'll find out," Massa said.

Roger Feldman, an economics professor at the University of Minnesota, said the state's hospital administrators have good reason to be anxious about the deal worked out between Gov. Tim Pawlenty and the legislature.

"I think the problem in the current transition of GAMC over to this system is simply they didn't provide enough money and put too much of the risk on the providers, so that they ultimately only got a few of them to accept the deal," he said

Feldman says he likes the idea of turning over GAMC to coordinating care organizations because generally patients get better care when someone is overseeing their health. But he's not sure that hospitals are the right organizations to be coordinating care, since they tend to specialize in acute care, rather than preventative care.

Sue Abderholden, executive director the Minnesota chapter of the National Alliance on Mental Illness, said her organization works with mental health crisis homes that no longer will get funds from GAMC, unless hospitals send patients to them. She has been in talks with the metro hospitals that will be coordinating GAMC.

"What we don't know is what kind of relationships and contracts will they enter into with the community?" she said.

Abderholden is worried that the hospitals won't dole out their GAMC funds to the providers that will offer the most appropriate care to patients.

She and other providers MPR News talked to agreed a better solution for providing health care was one that didn't make it out of the session: shift low-income Minnesotans from GAMC to the Medicaid program under the new federal health care law.

Minnesota is eligible to enroll early in that program, but Pawlenty and Republican legislators beat back DFL attempts to tap that program now.

However, lawmakers gave the governor or his successor the authority to switch to the Medicaid option between now and next January.