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A joint-powers board voted Friday afternoon to kill the Stedfast Health Plan which would have bought health care for thousands of Medical Assistance recipients after Gov. Tim Pawlenty’s veto of a bill considered vital to the plan’s success.
Winona County had invested roughly $660,000 to jumpstart the plan, which it hoped would offer better coverage for low-income residents at lower costs than private plans. But the veto prompted the board that oversees the plan to have second thoughts.
“I just can’t see us pumping more money into a losing proposition,” said Dave Perkins, a member of the board and Olmsted County commissioner.
Winona, Olmsted, Houston, Fillmore and Mower counties have invested roughly $4 million in planning and startup costs for Stedfast. The counties should be able to recover about 95 percent of the money, said Stedfast CEO Charity Floen. The other 5 percent, which was mostly spent on studies and administration, is nonrefundable.
The organization which had planned to start covering residents by October now will cease operations by July 31.
The Stedfast plan would have offered an HMO-type health plan to roughly 5,000 state-insured residents in the five counties. Medical Assistance recipients in those counties now choose between two private health plans: Blue Cross and UCare.
Supporters said Stedfast would have provided better provider access and preventative care than the private plans resulting in better long-term health outcomes and lower overall costs.
The measure Pawlenty vetoed passed overwhelmingly in both the House and Senate. It would have enrolled Medical Assistance recipients who don’t specifically choose a private plan roughly 30 percent of that population on the Stedfast plan.
Stedfast projections indicate the provision would have enrolled 2,189 patients on the plan by its second year, as opposed to 1,094 patients without the provision. With those additional patients, projections showed the plan breaking into black ink by more than $1 million in four years. Without them, the plan was predicted to barely break even in a five-year span.
“It was just, financially, too risky,” said Marcia Ward, vice-chair of the Stedfast board and Winona County commissioner.
Ward was one of six representatives who voted to kill the plan, with Olmsted commissioner Mike Podulke and Houston County commissioner Larry Connery dissenting.
Podulke argued private insurers were threatened by Stedfast and lobbied Pawlenty to veto the bill. He compared the fledgling Stedfast plan to “an infant” that could have changed the way health care is delivered to Minnesota’s state-insured residents.
“The powers that be strangled the infant in its crib,” Podulke said.
Contact Mark Sommerhauser at (507) 453-3514 or msommerhauser@winonadailynews.com.
