Analysis: Minn. health deal eases rest of session

Last week's deal between Democratic lawmakers and Republican Gov. Tim Pawlenty to preserve a state health care plan for the very poor went beyond providing relief to more than 30,000 people who rely on the program.

It also improved the chances for a smooth end to the session.

The two sides still have big issues to resolve, including a nearly $1 billion deficit through mid-2011 and a slate of construction projects to boost the economy. And they're not known for their ability to work together. Last week started with the House failing to override Pawlenty's veto to extend the health care plan; a few days later the issue landed in court.

Still, just a month into session, state leaders removed one of the major clashes over who gets government health care. There's hope the good will can spread into other areas.

Similar disputes over health care eligibility and funding dragged out the end of sessions in 2003, 2004, 2005, 2007, 2008 and 2009. The 2005 disagreement led to a partial government shutdown before Pawlenty and Democrats raised a cigarette tax (formally called the health impact fee) to close a budget gap.

"The need was obvious. The goal was mutally agreed upon. People had different ideas about how to get there. We just built on commonalities," Pawlenty said, announcing the General Assistance Medical Care breakthrough Friday at a joint news conference with Democrats.

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Human Service Commissioner Cal Ludeman - whom Pawlenty said acted the part of "Cool Cal" in private talks over the program's future - said it looks like other health and welfare issues won't go to the back of the line in this year's budget negotiations. He said he hopes they'll be resolved before the last hours of session in mid-May.

Lead Senate health care negotiator Linda Berglin, a Minneapolis Democrat, said the GAMC deal will cost $116 million from the general fund while saving about $146 million by scrapping Pawlenty's plan to switch the patients to another state health plan.

The savings help narrow the budget gap. It also doesn't hurt that Minnesota's short-term deficit shrank slightly in last week's forecast. And in Washington, odds improved for passage of federal Medicaid assistance money that could bring nearly $400 million to Minnesota. In St. Paul, Democrats in both houses are starting to outline spending cuts for everything from ethanol payments to public defenders.

"It becomes easier," said Senate Finance Committee Chairman Dick Cohen, a St. Paul Democrat.

Democrats predicted health and welfare spending will remain in play at the end of session, including nursing homes, chemical dependency treatment and possibly the MinnesotaCare health plan for the working poor.

"It's still 30 percent of the budget," House Majority Leader Tony Sertich said.

Last week's GAMC agreement may have been early, but it didn't extend to every detail.

When asked Friday whether the health program would continue to be called General Assistance Medical Care, Berglin quickly answered yes. Pawlenty demurred.

"I don't think we agreed on a name, but I don't know," he said, to laughter from those who had crowded into his reception room for the news conference. "Whatever."

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EDITOR'S NOTE - Martiga Lohn has covered Minnesota politics for The Associated Press since 2004. She can be reached at mlohn(at)ap.org.