Gov. candidates Walz and Johnson are at odds on health care. Would either’s plan fix much?

Oct. 15--Tim Walz and Jeff Johnson are both promising Minnesotans better-quality health care for less cost.

But it is unlikely that either candidate for governor's plan would do just that.

That's the conclusion of several health care experts interviewed by the Pioneer Press.

"We're hearing things that are more aspirational than concrete," said Scott Keefer, vice president of public affairs for Blue Cross Blue Shield of Minnesota. "What we want to hear is more of a holistic conversation that would improve the health care system and make it more affordable for everyone, and we're not really hearing that."

Instead, says Larry Jacobs, an expert on health care policy and the director of the Center for the Study of Politics and Governance at the University of Minnesota's Humphrey School of Public Affairs, we're hearing elaborate talking points.

* Walz, a Democrat and Mankato congressman, is pushing a philosophy that expands government programs to those who would benefit from them.

* Johnson, a Republican Hennepin County commissioner, is arguing that government needs to get out of the way and allow market forces to work.

Both ideas are incomplete, if not flawed, experts said.

That leaves voters to choose which philosophy -- Republican or Democrat -- they most agree with, but with no clear evidence that either candidate will bring sweeping change to the system.

Maybe that's the way it should be.

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"We should be making incremental changes at the state level, rather than letting the whole thing implode because of some ideal that doesn't work," said Jim Schowalter, president of the Minnesota Council of Health Plans, which represents the state's largest insurers.

A DIFFICULT BALANCE

The problem, experts say, is that there are no easy solutions to the myriad challenges facing the U.S. health care system. Most broad changes leave somebody or some group -- taxpayers, doctors, hospitals or insurers -- coming out winners, while others come out losers, financially speaking.

"There's nothing free here, and the most clear point is that there are winners and losers," Jacobs said.

That doesn't mean voters of different ideologies won't prefer one candidate's plan over an others.

For instance, Johnson's push for less regulation and more competition may benefit workers who already get their insurance through larger employers and want to keep their costs down.

On the other hand, Walz's proposals would help people with limited choices who struggle to afford coverage.

What it does mean is both proposals, if implemented, will likely have consequences beyond their intentions.

"The expenses don't go away just because someone else pays them," said Eileen Smith, spokeswoman for the Council of Health Plans. "Premiums are expensive because care is expensive."

WALZ'S PLAN

The argument: Walz wants to open up state-run MinnesotaCare, coverage currently limited to the working poor, to anyone who buys insurance on the individual market. That would give roughly 100,000 people who don't get insurance from their employer more options, especially in rural areas where offerings are limited.

MinnesotaCare is widely seen as a successful program and the so-called chance for anyone to "buy in" is broadly supported by Democrats, including Gov. Mark Dayton, who initially proposed it.

Walz argues his plan would essentially be cost-neutral to taxpayers because those who buy in would pay higher premiums than the working poor. The biggest benefit, Walz says, is improved access to affordable health care.

"I think it is irresponsible not to get everyone covered," he said.

Walz admits the proposal is a step toward a "single-payer system," which he says he still supports despite Johnson accusing him of backing away from the idea after the primary. But Walz concedes that type of widespread change would take action at the federal level.

Republicans hate the idea -- calling it a "government takeover" of health care.

Walz acknowledged the MinnesotaCare "buy-in" would have limited impact on the overall system in Minnesota. He also supports more price transparency and strategies to improve preventative care and overall well-being.

The questions: There are additional costs associated with Walz's plan. It would take at least $12 million just to put the government infrastructure in place and the state also would have to put up about $100 million as a sort of insurance backstop.

There would also be costs for those buying the insurance, and it's unclear how the plans would compare with the commercial market. The Dayton administration estimated the average "silver plan" would cost $658 per person per month -- a figure some Republicans say is way too low.

"New people buying in would have higher premiums, and that's something Tim Walz doesn't really want to talk about," Jacobs said. "You gotta get the money somewhere. You either have to cut provider payments, which would hurt hospitals. Or you have to increase premiums. Or you have to increase taxes."

That's why hospitals and insurers oppose the idea.

Insurance companies worry it will further divide an already-dwindling individual insurance market. Insurers say competing with a government-run plan would likely drive up the cost for private customers.

Hospital advocates fear the lower rates government insurance plans pay for services will hurt their bottom line. Typically, the more patients on government insurance, the higher the costs for everyone else.

Lynn Blewett, a professor of health policy at the University of Minnesota's School of Public Health, said a carefully targeted expansion of MinnesotaCare could lessen those concerns. But it does nothing to control the overall cost of care.

Blewett adds that was the key omission of the Affordable Care Act, also known as Obamacare. "It just didn't really address costs at all," she said.

Finally, expanding MinnesotaCare would need the approval of the Trump administration, which generally wants to give more control to states but opposes widespread government intervention.

JOHNSON'S PLAN

The argument: Johnson argues that Minnesota had a better health care system before Obamacare -- something disputed by some experts, including Blewett. Government needs to get out of the way, Johnson says, and loosen restrictions to allow market forces "to create more choice for Minnesotans."

He would back legislation encouraging more employers to self-insure and more cooperatives, such as groups of farmers, to pool together and negotiate better rates. Johnson supports allowing health plans from other states to be sold here.

Johnson has also called for more flexibility in the types of things insurance plans have to cover. But he says experts, not the government, should decide what could be left off.

Like Walz, Johnson has also called for more transparency in pricing for care, which he argues would increase choices and bring down costs.

Essentially, while Walz wants to make government-run health care available to more Minnesotans, Johnson thinks they'd be better off on private plans that would cost less if there was more competition and fewer regulations.

He also believes eliminating fraud and waste can make the government programs that remain run more efficiently and effectively.

The questions: Experts say the idea that market forces can lower costs hasn't proven to work. Johnson even admits he doesn't have an example where it's been widely successful, but says that's because his ideas haven't all been tried together before.

Jacobs and Blewett disagree.

"For almost four decades, this is what we've been trying, going back to Richard Nixon, who authorized HMOs," Jacobs said. "That's been the model, and it has not worked, and it's not from lack of effort."

Blewett added: "Health care just doesn't really behave like an open market."

A big reason for that is there are lots of people with pre-existing medical conditions and limited financial means. It's unclear how those residents would be protected under Johnson's plans.

Johnson wants to get rid of Obamacare but continue to cover pre-existing conditions and return to a state-subsidized high-risk insurance pool.

Experts say that could be disastrous for the market.

"As soon as you pull back the ACA, it's very, very difficult to keep pre-existing conditions, and that's not ideological," Jacobs said. "That's gravity. A guarantee of pre-existing conditions just changes the health care market."

Insurers could be hit hard, premiums might spike and state lawmakers would likely need to use taxpayer dollars to keep markets stable.

DECISIONS HAVE TO BE MADE

Regardless of who wins, the next governor and state Legislature face a ticking clock when it comes to state health care policy.

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At the end of next year, a tax on health care providers that raises nearly $700 million a year for government programs and efforts to improve access and care will sunset. Not replacing that revenue, whether through new sources or budget changes, will mean deep cuts to programs.

Walz supports keeping the provider tax, while Johnson wants to let it expire. Republicans have repeatedly argued that MinnesotaCare, one of the big reasons the tax was created, is now mainly funded by federal resources under Obamacare, which Democrats point out is constantly under fire.

The state's reinsurance program, which limits how much insurers have to pay for the state's sickest residents, is also about to expire. That program cost $540 million over two years, but it helped bring down and stabilize rates on the individual market.

Both insurers and health care providers like the concept, but it isn't a long-term solution without a dedicated funding source.

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