July 01--The Supreme Court's decision to uphold the federal health law has raised new questions about exactly how -- and whether -- the state will further expand Medicaid health insurance coverage for low-income residents.

Meanwhile, a key Republican in the state Senate suggested there is no urgency to work with Democrats this summer to create a "health exchange" -- a new type of marketplace created by the law where Minnesotans can start buying coverage late next year. He is confident fall elections will create a Republican majority in Washington, D.C., able to repeal the law.

The partisan divide over how to implement the health law persists at the state Capitol even with the Supreme Court ruling Thursday, June 28, that the federal legislation is constitutional.

On Medicaid, the administration of Gov. Mark Dayton remains committed to a full expansion of the Medicaid program as was envisioned by the 2010 health law. But the court's ruling Thursday made the expansion optional for states -- and leading Republicans think Minnesota would be wise to put the brakes on a further expansion.

As for health exchange planning, some Republicans have called for engaging the Dayton administration in talks on the subject in hopes of promoting free-market elements in the plan. But Sen. David Hann, a leading Republican on health issues from Eden Prairie, said he and others in his party remain focused on what they see as fundamental flaws in the law -- not the need to try to make

it work.

On Friday, Hann said voters in November will clearly register opposition to the health law and put Republicans in a position to repeal it.

"People do not want this law," Hann said. Noting that the Legislature won't be back in session until next year, he added: "There's no possible way we can pass a health exchange between now and January."

Signed into law by President Barack Obama in March 2010, the Patient Protection and Affordable Care Act set a goal of significantly reducing the number of Americans who lack health insurance.

In Minnesota, there were about 500,000 uninsured residents last year. With implementation of the Affordable Care Act, the number of uninsured people in the state in 2016 should stand at just 210,000, according to an April analysis conducted for the Minnesota Department of Commerce.

More than one-third of those in Minnesota newly covered in 2016 will have purchased insurance through the health exchange with the help of federal subsidies, according to projections in the April report. More than one-fourth of the newly covered will have insurance through public programs, according to the report.

Exactly how the expansion of the Medicaid public program will play out is unclear with the court's ruling, said Lucinda Jesson, commissioner of the state's Department of Human Services. But she stressed that Dayton remains committed to the goal of fully expanding the program, which would bring coverage through Medicaid to about 120,000 residents.

Dayton opted to implement a portion of the Medicaid expansion in 2011, making the program available in the state to adults without children who have incomes below 75 percent of the poverty level, currently at $971 a month for an individual. The move added about 84,000 residents to the state's Medicaid program.

It would be tough for Minnesota to "un-ring the bell" and roll back the 2011 Medicaid expansion, said Rep. Steve Gottwalt, R-St. Cloud. But Gottwalt thinks the state should think twice about plans to continue the expansion for those with incomes between 75 percent and 133 percent of poverty -- the upper limit specified in the health law.

"Let's take care of people in a way that we know we can sustain without doing serious harm to our economy and our state budget," Gottwalt said.

Hann said that if Dayton wants to continue the Medicaid expansion, the administration would need approval from the Legislature. Republicans would strongly resist any such effort, he added.

Jesson wouldn't say whether she agrees that legislation is needed to authorize an expansion. But further expanding the Medicaid program makes sense for Minnesota, she said, because the state currently is paying a larger share of the costs for covering adults without children through a different program called MinnesotaCare.

"We're absolutely committed to it," Jesson said of the expansion.

On the health exchange, Minnesota has been awarded $28.4 million from the federal government to fund planning efforts. So far, the Dayton administration has spent nearly $2 million of that.

By the end of the year, the state must submit its plan for an exchange to the federal government for approval. Otherwise, the federal government could impose its own version.

Minnesota is on the verge of hiring an information technology contractor who will make a prototype health exchange operational, said Mike Rothman, commissioner of the Department of Commerce.

"Think of it as a consumer marketplace for purchasing insurance," Rothman said of the exchange. "It will be much like going to the Internet for Expedia or any other type of purchase where people can see their options in a consumer-friendly format."

More than 1.2 million people per year in Minnesota will enroll in their health insurance plan through the exchange, according to the April report to the Commerce Department. The total includes about a half million people with private insurance plus a larger group covered through public programs.

Gottwalt, the Republican from St. Cloud, has been among those urging his party to engage the Dayton administration in debate over planning for the health exchange. It's too soon to say whether the Supreme Court's ruling will push many other Republicans closer to his point of view, he said, although clearly some aren't moving.

"I think they're wrestling thoughtfully with this issue," Gottwalt said. "I'm not going to sit on the sidelines -- I think we need to be engaged in what this means for Minnesota. But I respect those who think we ought to wait for the election."

Christopher Snowbeck can be reached at 651-228-5479. Follow him at twitter.com/chrissnowbeck.

___

(c)2012 the Pioneer Press (St. Paul, Minn.)

Visit the Pioneer Press (St. Paul, Minn.) at www.twincities.com

Distributed by MCT Information Services