Pawlenty's plan would extend insurance coverage to an additional 23,000 Minnesotans -- half of them kids. After his re-election, Pawlenty said he wanted to insure all Minnesota kids. Today he said that's still his goal, but it can't be done all at once.
The governor says his plan does goes further than health care plans introduced by Democrats. He says he wants to fix the healthcare system. "Providing more access to a broken system is not a complete solution. The system itself needs to be fixed and improved, while we grant more access and as we strive to get everybody more coverage," said Pawlenty.
The governor suggests one way to fix the system is by encouraging some MinnesotaCare enrollees to switch to what he describes as more of a private market plan. The plan would still be subsidized by the state. But its premiums would be 50 percent lower for kids.
"We'll have MinnesotaCare Classic and we'll have MinnesotaCareII, which is an expanded voluntary enrollee choice for them. And the incentive there is the premiums that they would pay would be significantly reduced from MinnesotaCare Classic. The benefit set would remain, but they would be encouraged to go into the private market," said Pawlenty.
In exchange, Pawlenty says the plan would have higher deductibles and co-pays to encourage MinnesotaCareII recipients to make more responsible decisions about doctor's visits.
The governor also wants to give bonuses to families in the program who meet preventative care goals.
"You'd get up to $50 per child, up to three children per year, by adhering to protocols for better health," Pawlenty said. "For example, immunization schedules; for example, the types of preventative care that we want to see particularly in youth, before they get into the teenage years."
The governor also proposes creating a nonprofit organization called the Minnesota Insurance Exchange that would connect employers and employees with more affordable health coverage options.
Through the exchange, the governor would require all employers with more than 10 employees to establish a "Section 125 plan" so that their employees could buy cheaper health insurance. Pawlenty says the plan would cost employers about $300 to set up.
"Even if you didn't pay for the insurance as an employer, if just two of your employees go out and buy insurance through the exchange, the benefits to the employer on a pre-tax basis -- because of their payments to Social Security and otherwise into the 125 plan -- more than cover the cost of setting up the plan," said Pawlenty.
The governor's proposal was met with a mixture of support and skepticism. Rep. Tom Huntley, DFL-Duluth, says he wonders how MinnesotaCareII will be able to offer lower premiums without passing that cost on to providers. But overall, Huntley says he agrees with many of Pawlenty's market-oriented approaches.
"I like it. I'm sort of more market-placed than some Democrats. But we have to go after the cost and quality problem for people that already have insurance," said Huntley.
The Children's Defense Fund Minnesota is somewhat less impressed with the plan. Spokesman Marc Kimball says the governor's proposal falls far short on insuring kids.
"One of our concerns as we look at it is there are at least 68,000 uninsured kids in Minnesota. That's enough to fill the Metrodome and have thousands more standing outside. And his plan would cover, at best, less than one in five of those."
Gov. Pawlenty says his plan would start in 2009 and would cost about $31 million that year. He says it would cost $88 million if it is fully implemented in the following biennium.