Pawlenty blasts Baucus plan, offers market-based reforms in MN

While the Baucus plan chugs ahead to the Senate floor, sans legislative language, Minnesota governor and likely 2012 presidential candidate Tim Pawlenty takes some target practice at it.  Writing at Big Government, Pawlenty blasts both the rush to vote on a summary rather than an actual bill and the assumptions underlying the Baucus approach:

Senate Democrats are pushing a vote on the 1,000-page bill now because the Congressional Budget Office recently estimated that the bill cost “only” $829 billion over the next 10 years. In truth, the bill raises taxes immediately, but the benefits do not kick in for another four years, so the 10-year numbers are distorted. This is an expensive experiment that cuts Medicare, and exacerbates state government budget problems by dramatically expanding Medicaid without providing additional funding.

How do the Democrats propose to pay for the rest of the new spending? There are a massive amount of tax increases in the bill, including over $200 billion in tax increases on insurance premiums, new taxes on individuals and employers, and over $120 billion in new taxes on medical device makers and other health care businesses.  All of these tax increases concern me, but the latter category does so especially: My state is the home of Medtronic, Boston Scientific, 3M, St. Jude Medical and other medical technology makers that employ 60,000 Minnesotans and save and improve countless lives. Increasing taxes on these businesses would not only be an unwise burden on these employers, but would siphon money otherwise spent on research and development.  It would also risk the cost of increased taxes being passed on, directly or indirectly, to those who rely on such devices or who cover their cost.

The Democrats are proposing these tax increases to offset the costs of mandating and subsidizing the purchase of health care by every American. Expanding health care access to all Americans is an admirable goal and one that I share – but one that also cannot be accomplished without addressing the root cause of America’s health care crisis, something the Baucus bill fails to do.

Simultaneously, Pawlenty released proposals for market-based health-care reforms in Minnesota, including the ability to buy policies across state lines:

Minnesotans would be first in the nation to be able to purchase health insurance across state lines under an initiative proposed by Governor Tim Pawlenty today.

Governor Pawlenty outlined a package of health care reform initiatives to be considered during the 2010 legislative session. In addition to enhancing competition in the health care insurance marketplace, the Governor proposed applying successful cost-containment strategies to the state’s publicly-subsidized health care programs.

“Minnesota has one of the best health care systems in the world. We have world-class providers and the second highest rate of people with insurance,” Governor Pawlenty said. “In recent years, we’ve made significant progress toward making our health care system even more market-driven, patient-centered and quality-focused. While Congress debates federal health care reform, there are important additional steps that we can take in Minnesota to provide greater choice and competition while holding down explosive health care costs.”

Governor Pawlenty proposed three health care reform initiatives:

  • Allow Minnesotans to Purchase Health Insurance from Other States
  • Require MinnesotaCare & Medical Assistance to Price Health Care Services Based on Quality and Cost
  • Include Consumer-Driven Incentives in MinnesotaCare

The “consumer-driven incentives” for the state system would give plan recipients some economic incentives to shop for better and more cost-effective medical care.  Unused allocations would roll over into subsequent years, for instance.  It would also use higher deductibles in coordination with state contributions to encourage better consumer involvement in provider selection, relying on the normal market pricing mechanism to control costs and the problem of overaccess. Pawlenty also wants to apply some efficiencies already built into state employee health insurance into the state programs as well.

Democrats often accuse Republicans of offering no ideas on health care, a patently false charge as the House has ignored Rep. Paul Ryan’s HR2520, which offers a comprehensive package of market-based reforms that would actually lower costs and expand access.  Pawlenty gives Republicans another arrow in that quiver, and moves the policy battle back where it belongs — in the purview of the states.

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Jazz Shaw 5:31 PM on February 04, 2023