Mark Dayton said he will fulfill a campaign promise to enroll Minnesota in a Medicaid expansion plan soon after taking office in January.
Hospitals and health care providers around the state are looking forward to expanded Medicaid because they said it would reduce the state's cost burden and allow more providers to participate. More than $1 billion in federal funds would come to the state.
"The money basically is to allow the federal government to pick up half of the cost that Minnesota is currently spending," Mary Krinkie, vice president of government relations for the Minnesota Hospital Association, told MPR's Morning Edition.
The expansion of Medicaid means all Minnesotas on General Assistance Medical Care and some 20,000 uninsured Minnesotans would be covered under the federal program. About 30,000 Minnesotans are enrolled in GAMC, which would cease to exist once the state enrolls in expanded Medicaid.
Krinkie said under the current GAMC program that was revamped during the last legislative session, providers are "grossly underpaid."
"The new Medicaid program would be a better option," she said.
Krinkie said GAMC patients will also have access to more providers, including dentists.
Lawmakers set a deadline of Jan. 15 for the next governor to enroll in the early Medicaid expansion. Gov. Tim Pawlenty has refused to enroll, saying the state could not afford the matching funds required under Medicaid expansion. The Medicaid expansion was also part of President Obama's controversial health care law.
Mike Harristhal, vice president of public policy and strategy at Hennepin County Medical Center, said his hospital stands to gain $3.5 million a month from the new plan.
He and Krinkie said it will take up to six months for the federal money to start flowing. Krinkie said she hopes it will be more like three months.
(MPR's Curtis Gilbert and Cathy Wurzer contributed to this report.)