The case for GAMC health care


The pen is mightier than the sword, something Governor Pawlenty proved earlier this year when, with the stroke of his pen, he used his line-item veto to eliminate the General Assistance Medical Care or GAMC program. GAMC is a state-funded health insurance program for low-income adults, ages 21-64, who have no dependent children and who do not qualify for federal coverage. 

The list of eligibility requirements shows that the population relying on GAMC is the poorest in the population, those with the most transient lifestyles, and those who would otherwise fall between the cracks.

Two weeks ago the Governor announced 28,000 GAMC recipients will be automatically transferred from GAMC to MinnesotaCare. This “solution” was offered as a way to “ensure” continued access to care for those who would otherwise be without options once GAMC runs out. Counties will be held responsible for paying the premiums until the eligibility period runs out. At the end of eligibility or after 6 months, recipients are responsible for renewing and paying the premium.

MinnesotaCare provides subsidized health insurance to working Minnesotans who do not have access to employer-provided health care coverage. Adults without children are subject to a $10,000 annual limit for inpatient hospital services, copayments of 10% for inpatient services, and $3 copayments on prescriptions.

MinnesotaCare is a great program for those it is designed to serve, but for the GAMC program population it is a poor match.  Why?

60-70% of GAMC recipients are mentally ill and/or deal with chemical dependency. GAMC has $3 copayments on brand-name prescriptions, and $1 copayments on generic drugs up to a maximum of $7 per month; with anti-psychotic drugs exempt from the copayment. MinnesotaCare has comparable copayment rates, but no provisions for a maximum monthly copayment amount, nor an exemption for anti-psychotic drugs.

The prevalent illnesses and conditions among the GAMC recipients are likely to exceed the $10,000 treatment cap which will lead to a shift in cost onto the hospitals and ultimately everyone else through higher insurance premiums.

Although there will be an automatic transfer of GAMC program participants on March 1, 2010 those who would have qualified for GAMC will be faced with the 3-4 month waiting period for MinnesotaCare on March 2, 3, 4 etc. Right now, someone who qualifies for GAMC can be enrolled immediately and not saddled with exorbitant costs for treatment. When GAMC is discontinued, these people will have to apply for MinnesotaCare, which will not take effect for another 3-4 months, ensuring that these people will be solely responsible for any cost related to medical emergencies.

The average monthly premium for GAMC recipients will be $5 once they are transferred to MinnesotaCare. For many of us, this seems like a bargain, but for someone living on an average $200 per month it is a substantial barrier to health care. MinnesotaCare premiums must also be paid by debit/credit card, check, money order, or in cash at the St Paul downtown office. Most homeless or mentally ill do not have bank accounts and thus are unable to use a card or check. A money order for $5 costs $1.10 at the post office, and the bus to downtown St Paul can run up to $2.25 effectively increasing the premium to $6.10 or $7.25.

MinnesotaCare requires timely payment of premiums and re-enrollment every six months. If premiums have been defaulted any program participant can be denied care and will have to face the 3-4 month wait for re-enrollment.

MinnesotaCare receives the majority of its funding from the Health Care Access Fund which receives its revenue from a 2% provider tax and a 1% premium tax. The Health Care Access Fund is estimated to run out in 2012, but now it may run out as early as April 2011 if it is bogged down with 28,000 new program participants from GAMC.

GAMC does more than guarantee access to care for the poorest of the poor; it guarantees payment for that care. Hospitals will continue to provide emergency care to anyone in need of it, but without GAMC the costs will be covered through various cuts in programs and staff and higher rates to the insured.

Hennepin County Medical Center, the hospital with the most GAMC patients, is expecting a loss of revenue at about $43 million for 2010.  This year 200 positions at HCMC have already been terminated. On November 18, HCMC unveiled its proposed budget which included cutting another 150-200 positions. The hospital is considering “gating”, a practices that will deny care to uninsured, non-Hennepin County residents with non emergencies at out-patient clinics. The proposed budget also included provisions to close an outpatient cardiac rehabilitation program and the Senior Care Clinic. Many medical students do their clinical rotation at HCMC, and many health care providers and professionals from around the state go to HCMC for advanced clinical training. With the cuts to GAMC, the hospital is considering reducing or eliminating training programs. HCMC is the state’s largest Level 1 trauma center and receive cases from every corner of the state, some of these specialty programs and services are now at risk.

In Duluth, Miller-Dwan Rehabilitation Center will lose $4.5 million, or 5.4% of their budget, St Mary’s Medical Center will lose $9.3 million, or 2.9% of their budget, and Saint Luke’s Hospital will lose $5.5 million, or 2.7% of their budget.

Overall, the loss in funding to hospitals statewide is $403 million and it is estimated that it will result in 7,600 jobs lost.

Without insurance, people are hesitant to see a doctor. The lack of preventive care will in turn lead to higher numbers using emergency rooms as a primary care point.

This is not only morally wrong, but it will lead to higher cost for everyone as more care is provided through the expensive ER and ICU. Recent studies also suggest insured adults in communities with high levels of uninsured are more likely to experience difficulties accessing necessary medical care.

MinnesotaCare, although an affordable and excellent program, is not a good match for the GAMC population. When we do the math it is easy to see why; the premium of $5, the copayments on prescription drugs of $3, the copayment on inpatient hospital services of 10% all add up to more money than they can afford to spend on their health care.

Without medication, those struggling with mental illness will become sicker and more likely to fail to meet premium payments and will thus lose coverage.  Without coverage they are more likely to have to rely on the more expensive emergency care which will leave the hospital with unpaid bills and everyone else with less available services at the hospital, increased wait in the emergency room, higher insurance premiums, and more medically induced personal bankruptcies. If, by some miracle, the shift to MinnesotaCare works, the Health Care Access Fund will deplete at a rapid rate, leading to a possible deficit by fiscal year 2011-2012. The need to cut costs will likely result in cutting eligibility for those in the higher income brackets and adults without dependent children, the latter being the current GAMC population thus once again leaving them without a health care safety net.

We should all be compelled to save the poorest of the poor in Minnesota to ensure that they too will have access to proper health care and unabashedly tell our policy makers that we do not support policies that move Minnesota backwards.