Health care becomes flashpoint in Minnesota governor's race

Health care has emerged as the most contentious issue in the Minnesota's governor's race, as both candidates grapple with the bedeviling details of a system that is worrying to patients and phenomenally expensive to taxpayers.

Republican nominee Jeff Johnson and U.S. Rep. Tim Walz both say that all Minnesotans — even those with pre-existing conditions — should have access to affordable health care.

That's where the agreement ends. A fiery exchange at a debate in Willmar on Tuesday drove home the divide, and Johnson also criticized Walz over health care earlier in the day at a news conference.

Johnson, a Hennepin County commissioner, has been hitting Walz for favoring a "single-payer" health care plan.

"We have to understand what single-payer means," Johnson said. "We all lose our insurance and are forced onto one government plan."

Single-payer advocates point to Medicare — the government insurance program for Americans 65 and older — to argue that government insurance could cover all Americans at lower cost than the current private system.

Johnson cites Walz's answer to a questionnaire: "We also recognize that expanding Minnesota's public option is just a start, ultimately, we need to enact a single-payer system, and as governor I will fight to put us on a path toward single-payer health care."

In a recent interview, Walz cited statistics showing that Americans spend twice as much for health care as the rest of the industrialized world, often for inferior results. He said he views Medicare access for all Americans as inevitable, but on a national, not a state, level.

Asked if he would make it a priority at the state level, Walz said, "This is a difficult one. California tried to do it. Vermont tried to do it." Both gave up on the effort.

For the moment, Walz is proposing a plan that would emulate one offered by DFL Gov. Mark Dayton, which would allow all Minnesotans to buy into the public health insurance program currently reserved for the working poor called MinnesotaCare.

Johnson attacked that proposal this week by arguing that because MinnesotaCare pays lower reimbursement rates than private insurance, rural hospitals and clinics could face financial ruin if thousands of Minnesotans use a government insurance option. He noted that the Minnesota Hospital Association opposed Dayton's MinnesotaCare buy-in proposal.

Wendy Burt, a vice president of the hospital association, said the group is bipartisan, does not endorse and has made no determination about Walz's plan. Burt said the hospital group has made no claims about whether hospitals would close if more people were enrolled in MinnesotaCare. "We don't know that. We haven't said that," she said.

The hospital association includes 142 institutions, nearly all of them nonprofit. Some are owned by insurance companies that would be in direct competition with an expanded MinnesotaCare.

While the hospitals oppose Dayton's MinnesotaCare buy-in plan, they also oppose aspects of Johnson's plan.

Johnson said he wants to give consumers more choices, including buying so-called "skinny" health insurance plans, which are less expensive but do not offer comprehensive coverage.

Walz, who voted for the Affordable Care Act and then voted dozens of times against repealing it, pointed out a potential problem with this approach during the Tuesday debate: "Let's say I'm 28. You decide I'm healthy. I'm fine. You don't buy into the [insurance] system. The pool shrinks. The pool shrinks. The pool shrinks. Rates go up."

In other words, if younger, healthier customers opt out of comprehensive health coverage, the remaining older, sicker customers would have to pay significantly more to account for the higher risk of those who stay in.

Burt said the hospital association is also opposed to this idea because it could hurt bottom lines: "If you're 27 and you get in a motorcycle accident and you don't have [comprehensive] coverage, guess who pays for that health care? The hospitals."

The Affordable Care Act required individuals to have comprehensive coverage, a mandate that Congress repealed in 2017. But the law also forced insurers to take on all customers, even those with pre-existing conditions.

Johnson said he would like to see Minnesota return to a system in place before the Affordable Care Act, in which people with pre-existing conditions who could not get coverage anywhere else could enroll in the Minnesota Comprehensive Health Association. The government-chartered nonprofit covered those who couldn't get private market coverage. Insurance companies and policyholders funded it, but premiums were higher than market rates. The program needed three cash infusions just to stay afloat. Even with taxpayer help, enrollment was steadily declining as premiums increased, and when the program closed it covered only 20,000 Minnesotans.

Johnson and Walz differ on another key health care issue. A tax on health care providers that's used to pay for health care programs is set to expire at the end of 2019. Walz wants to extend it. Johnson wants it to end on schedule. It currently brings in $700 million per year and is funding insurance for low, middle and even upper-income Minnesotans in the individual market. In 2017-18, the Legislature spent $543 million to pay off insurance companies' most expensive claims, which helped stabilize the market and reduce rates this year.

Much of the health care debate between Walz and Johnson is actually a return to a contentious argument that has roiled American politics for a decade: the Affordable Care Act, also known as Obamacare.

During the debate Tuesday, Walz said that since its passage, the number of Minnesotans in Kandiyohi County without insurance dropped by half. Statewide, the number of Minnesotans without insurance before Obamacare was 8.2 percent. It dropped to 4.1 percent in 2015, but last year jumped back up to 6.3 percent.

Johnson said since Obamacare rolled out, Minnesota has been mired in mediocrity.

"We kind of got sucked down to the same level as everybody else, and now we don't do it better than everybody else anymore," Johnson said.

Data from the federal government, however, indicates that Minnesota continues to lead the nation in health statistics, including life expectancy and access to health care.

J. Patrick Coolican • 651-925-5042 Glenn Howatt • 612-673-7192