Two Minnesota CEOs weigh in against Senate GOP health care bill

Health legislation moving toward a vote in the U.S. Senate would reverse gains made in insurance coverage and drive up costs for all Minnesotans, the CEOs of two of the state's largest health care companies said in an interview Thursday.

It could also produce job losses and service cutbacks at the state's hospitals and clinics and halt reforms that aim to boost quality, improve medical outcomes and cut costs, they said.

"I have deep, deep concerns about where the federal framework is right now and where it is proposed to go," said Dr. Penny Wheeler, chief executive at Allina Health, a hospital and clinic system that is Minnesota's fifth-largest employer. "There's nothing in this bill that talks about system reform, and in fact it actually undercuts system reform by cutting so many people off of coverage."

Wheeler joined Michael Guyette, chief executive of Blue Cross and Blue Shield of Minnesota, and state Human Services Commissioner Emily Piper to discuss the bill as coalitions of insurers, doctors and hospitals ratcheted up lobbying against the GOP plan.

On Thursday, Senate Republicans unveiled their second attempt to repeal and replace the 2010 Affordable Care Act. The bill would restructure health insurance in the individual market and cut billions from projected funding of Medicaid, which covers health care for the poor, the disabled and many elderly Americans.

The Congressional Budget Office is expected to release a report next week detailing the bill's specific impacts on insurance coverage and premiums. The CBO determined that the first Senate proposal would have reduced the number of people with health insurance by 22 million by 2026. The agency said the bill would reduce insurance premiums for some younger, healthier consumers but also reduce subsidies that help people buy insurance, raise deductibles and make insurance generally unaffordable to those with low incomes.

While providing a general framework for subsidies, the Republican proposal also leaves many elements and consumer protections up to the discretion of the states.

The new Senate bill provides some money to help states assist those facing high premiums, which could slightly reduce the number of people losing coverage. But the bill does relatively little to change the Medicaid proposal, which accounted for 15 million people losing coverage under the first draft.

In Minnesota, where 1.2 million people get coverage from Medicaid, the change would mean an immediate loss of $2 billion in federal funds beginning in 2020, growing to a total of $31 billion by 2030, according to a state analysis last week.

The legislation most likely would force the state to cut payments to hospitals, physicians and other providers, as well as to managed-care companies like Blue Cross, which administers the Medicaid program to about 860,000 enrollees.

"If reimbursement levels continue to get cut back, it would be a huge concern for our ability to continue to participate in the program," Guyette said.

Eagan-based Blue Cross is the state's largest Medicaid managed-care provider, serving 40 percent of all people in the program.

Allina Health would also suffer from lower payment rates, Wheeler said, and it would take an additional hit because it would see fewer patients if the uninsured rate increases.

"There are job losses with these cuts," Wheeler said. "It becomes a domino effect."

Wheeler and Guyette said the GOP legislation could also result in providers shifting costs to commercial insurers and insured consumers to offset losses from patients who lose insurance.

"We can't forget how highly connected all of the segments are," Guyette said.

Cuts to the Medicaid rolls and lower provider reimbursement rates could also end several experiments that seek to reduce Medicaid costs by keeping Minnesotans healthier, Wheeler said.

Allina is one of several providers working with Medicaid patients, often those with chronic conditions, to help stabilize their health and prevent expensive emergency room visits or intensive-care stays.

Despite Minnesota's efforts to improve health care delivery, Piper said the proposed Medicaid changes would put the state at a disadvantage. "The financial implications of this bill for states are staggering," Piper said. "These cuts will cause serious harm to Minnesota's ... health care system and potentially affect other state services as we struggle to manage these losses."

With passage of the Senate GOP bill still uncertain, some Minnesotans are hoping that Republicans and Democrats will work together to improve the ACA, rather than repeal it.

"We need a bipartisan fix to some of the known problems in the Affordable Care Act instead of a full repeal bill and tax cut bill," Piper said.

Guyette said Congress needs to address the individual market, where insurers have struggled to market attractive plans without losing money.

He said the GOP bill includes changes that would help the individual market, but he criticized the introduction of new language that would allow insurers to sell low-cost policies that provide skimpy coverage — policies that were eliminated under Obamacare.

"You are going to end up bifurcating the individual market into healthy and unhealthy," Guyette said.

Glenn Howatt • 612-673-7192