Our view: Costs of health-care reform will be borne by counties and statesIf federal health reform doesn’t work fiscally, federal, state and local leaders need to be ready to adjust quickly.
They saw it coming. And even though they were assured repeatedly the cash would be there to offset the costs of implementing federal health-care reform, St. Louis County officials started squirreling away money anyway.
And now they’re glad they did. As glad as every taxpayer in the county can be, from the malls of Hermantown to the shores of Lake Kabetogama. That’s because implementing at the local level the federal Affordable Care Act is expected to cost counties throughout the state and across the U.S. big bucks, despite the initial guarantees and reports to the contrary. In St. Louis County alone, it’s expected to cost a cool $1.5 million — just for the first year. That includes the hiring of 17 new county employees.
Even with federal money covering part of the tab, it’s a cost that rides on the shoulders of all us taxpayers.
“We’ve worked really hard to build our reserves,” St. Louis County Commissioner Keith Nelson of Fayal Township told the News Tribune editorial board last week. “You always put that money away for that rainy day. Well, guess what? It’s raining. And we’ve got that money there for the rainy day. But I don’t have the money there for the flood that might happen.”
“This is just the beginning,” predicted Commissioner Pete Stauber of Hermantown, the chairman of the county’s public health and human services committee.
“We don’t know what’s going to happen,” added Commissioner Frank Jewell of Duluth. “This wheel has to be reinvented as we go.”
In other words, what happens if federal health-care reform continues to cost counties? What if it becomes an annual expense rather than a one-time implementation surge? And what if promised state and federal dollars don’t come through to pay for the work being required by the state and federal governments? That’s something that happens often to counties. It’s what commissioners like Nelson, Stauber and Jewell mean when they speak of “unfunded mandates.”
Will local taxes have to be raised to cover ongoing costs related to America’s new way of offering health care and health insurance? Quite likely.
“There is a history of the state not fulfilling its promises,” Jewell said. “So there’s rightfully some worry.”
The county’s trepidation is only made more frantic when a leading health-care authority like Dr. Peter Person, CEO of Essentia Health, says at a public forum, “I think the implementation is going to be just a disaster. … I don’t know anybody that thinks this is going to work. This is going to be really messy and really complicated and really frustrating and really discouraging.”
At the same public forum this month in Duluth, St. Luke’s Hospital CEO John Strange said, “They’re underfunding it, and they’re way behind on the deadlines.”
Despite uncertainties, counties are stuck getting ready. Earlier this month, the St. Louis County Board considered a resolution to hire 16 financial workers and one administrative assistant to register and to screen thousands of Medical Assistance clients eligible for the first time because of federal health-care reform as well as thousands of others who’ll be transitioned from the state’s MinnesotaCare program to the county. The initial outlay in the resolution, for personnel and technology, is $660,069.76, of which the federal government is supposed to pay at least $310,232.79.
Other costs factored into the county’s expected $1.5 million outlay will be for office space, office equipment, computers and other expenses, according to Commissioner Nelson. That comes to $8 for every man, woman and child in St. Louis County, he said.
The County Board is expected to vote on the resolution June 11. Commissioners decided to hold off until after the Minnesota Legislature adjourned, in case any numbers change.
President Obama signed the Affordable Care Act, sometimes known as “Obamacare,” into law in March 2010, expanding the availability of quality health care to lower-income Americans, some for the first time. And that’s a good thing. Every American deserves quality care.
The sticky part is how it’s being paid for. Some insurers predict workers’ premiums will have to go up 100 percent to 400 percent. Some part-time workers worry their hours will be reduced as their employers try to avoid having to provide insurance in accordance with the new law. And local governments are ramping up.
If federal health reform doesn’t work fiscally, federal, state and local leaders need to be ready to adjust quickly. They need to be willing to fail fast and then to regroup and take a more effective approach. Coming out of a recession with the massive expense of retiring Baby Boomers on America’s horizon, the nation can’t afford federal health-care reform to be the “train wreck” one Democratic U.S. senator has predicted.