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Published December 11, 2012, 08:52 AM

Fewer than expected use Minnesota health care vouchers

ST. PAUL, Minn. (AP) — A plan to shift thousands of Minnesota residents from a state-subsidized health care coverage program to vouchers for private insurance isn't getting the traction that officials planned on.

ST. PAUL, Minn. (AP) — A plan to shift thousands of Minnesota residents from a state-subsidized health care coverage program to vouchers for private insurance isn't getting the traction that officials planned on.

About 1,200 of the 4,200 people who lost their MinnesotaCare coverage are getting the vouchers, which is well below what the state's projections. Minnesota Human Services Assistant Commissioner Scott Leitz told Minnesota Public Radio News (http://bit.ly/UwPidL ) that it may have to do with out-of-pocket costs associated with the new program.

"As people transition from programs, there's a possibility that you'll see fewer people taking up a newer program then as they transition out of an older one," Leitz said in a story that aired Tuesday. "For some individuals, it may be that the up-front cost sharing is something they aren't interested in."

The voucher system was a priority for Republicans when they took control of the Legislature in January 2011. They initially pushed to give vouchers to nearly everyone enrolled in MinnesotaCare, but that was scaled back in a budget deal with Democratic Gov. Mark Dayton. The goal was to achieve savings of $36 million over the next three years.

Among the recipients who explored the new program is Judie Nyholm, a 61-year-old Brooklyn Center resident who was dropped from MinnesotaCare and hasn't had health insurance since July. She became eligible for a state voucher of $395 monthly to buy health insurance on the private market through the Healthy Minnesota Contribution Program.

But Nyholm, who relies on Social Security benefits and a part-time job for income, said the health insurance available to her is either too expensive or inadequate. She said she examined an option that matched the $30 monthly premium for MinnesotaCare, but it would have required her to pay a $10,000 deductible before insurance kicked in. Lower-deductible options had much higher monthly premiums.

"If I'm making $19,000 a year with a part-time job and Social Security and I have to pay $10,000 a year for my health care, let's hope to God that I don't get sick," Nyholm said. "That's all I can do is pray that I don't get sick."

The program has received new scrutiny lately because its two chief architects, both Republicans, were found to have close ties to the private insurance industry. MPR reported Monday that state Rep. Steve Gottwalt and state Sen. David Hann, two health committee chairmen, now have roles in the insurance industry themselves.

According to the radio station, Gottwalt obtained a license to sell insurance and became an associate with a firm that pushed for the bill months after it passed in 2011. Hann, of Eden Prairie, sits on the board for the Minnesota Association of Health Underwriters, which lobbied for the bill.

Both lawmakers insisted they have no conflicts of interest after Democrats began questioning the arrangements.

"If I were taking in 20 or 30 people and getting in lots of commissions off of them, you might have an argument," Gottwalt told MPR for a story that aired Monday. "But you would still have to argue that we'd built and passed legislation to benefit Steve Gottwalt, and that's simply not the case."

Hann defended the program itself amid its slow start and said the state should share more information with insurance companies about the people who need coverage.

"What some of the insurance folks are saying is that you should allow us to know who those people are who are eligible so we can go and invite them or reach out to them and say, 'here's some things you can look at,'" Hann said.

The hitch is that state privacy laws don't allow the Department of Human Services to share personal information about clients.

Rep. Tom Huntley, D-Duluth, the incoming chairman of the House Health and Human Services Committee, said he plans to hold hearings on the program.

"I'm not opposed to trying some experiments and trying something new, but then you have to analyze it and say did this work or didn't it work? And it doesn't seem to be working," Huntley said.

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