Minnesota Counties Assess Costs of Obamacare Implementation

Published June 12, 2013

Beyond its impact on states and the nation, President Obama’s health care law has effects on county governments as well, as Minnesota counties are currently discovering.

Some county officials anticipate a 25 percent to 30 percent increase in workload as they ramp up to begin enrolling new and existing recipients of Medicaid and Minnesota Care in MNsure, the state health insurance exchange.

Counties are scrambling to meet this new workload as they attempt to implement and pay for what Rhonda Sivarajah, chair of the Anoka County Board, calls the “not so Affordable Care Act.”

“Locally, we are just beginning to fully realize how unaffordable the Affordable Care Act will be to carry out, specifically the publicly funded medical assistance portion of this law,” said Sivarajah. “After years of identifying efficiencies, streamlining services, and reducing the county levy, we will now be hit with unfunded costs estimated to be as much as $1.4 million over the next three years to pay for the additional staff and overtime needed to administer the ‘Affordable’ Care Act.”

Counties Face Compliance Costs

A survey of Minnesota counties finds a wide range of new staff, budgetary requirements, and caseloads. Statewide, the Minnesota Department of Human Services estimates about 108,000 new participants will be added to county health care rolls. Approximately the same number will be transferred by county staff from Minnesota Care to the new system. In addition, existing Medical Assistance cases must be converted using the new eligibility rules and management information system, MNsure.

While many counties are still struggling to estimate the number of new government employees and associated costs of implementing the health care law, it’s already clear there will be a big impact on local resources and taxpayers, says Janet Goligowski, division director of the Stearns County health department.

“We are in conversation with a number of counties who are also attempting to try and figure out what they’re doing and how they’re going to approach their boards in order to anticipate what is happening,” Goligowski said at a recent board meeting. 

Partial Federal Matching

The federal government will pay just under half of county costs to administer the medical coverage program, leaving it up to local taxpayers to fund millions in implementation costs. The heavy lifting will last 18 months or more as thousands converge on county offices to sign up for the program.

“Being poorly thought through, rushed through with some Congress members stating ‘they need to vote for it to understand what is in it,’ we are finding out at the local level, the byproduct of their wishful thinking,” said Anoka County Commissioner Matt Look.

Counties anticipate other services will see increased use as people sign up for the new entitlement program, with some officials predicting up to 40 percent of health-care enrollees will sign up for food assistance at the same time.

Costs Passed to Taxpayers

According to Bruce Mellert, Chisago County administrator, these requirements will have to be paid for through increased property taxes or budget cuts.

“We will have to pass those costs on to our local citizens through tax increases or budget cuts to make room. And in our particular case, the current county board has made it clear that tax increases are not a realistic option,” said Mellert. “So we will have to adjust our budget elsewhere and cut services or programs to make room for these additional costs.”

Other counties worry about the fiscal burden in the long term if implementation costs continue, according to St. Louis County Commissioner Chris Dahlberg.

“We as a county this year are going to be spending over $1 million to address some of this issue,” said Dahlberg. “As a county, we try to run on a policy of having a surplus for tough times, but Washington is putting us on a path to jeopardizing our financial security as counties.”

Tom Steward ([email protected]) writes for Minnesota Watchdog, where a version of this article previously appeared. Reprinted with permission.