Talking Health Care With Gov. Pawlenty

With his second term set to expire at the end of next year, Minnesota Gov. Tim Pawlenty is widely considered a likely contender for the 2012 Republican nomination. Pawlenty took a step toward raising his national profile recently when he formed a political action committee, called Freedom First. Last Friday, TAS‘s Philip Klein spoke to Gov. Pawlenty over the phone to get his reaction to the Democrats’ current health care push. The following is a transcript of the exchange.

TAS: To start with, since I’m sure you’ve already read the 1,900 page House health care billâ€_

Gov. Pawlenty: I stayed up all night reading it.

TAS: Okay, well, what’s your reaction to it?

Gov. Pawlenty: Well, I think both in detail and in philosophical direction, I think that it’s a very misguided piece of legislation. I think this effort is going to go down in history as one of the biggest bait and switch tactics in modern political history. You have a promise that we’re going to tackle costs and make health care more affordable. I think this bill and the Senate counterpart are going to spend more government money — not less. It’s going to cost premium payers more — not less. And it’s a big deception.

TAS: Can you talk for a bit about the expansion in Medicaid? In the Senate bill, Medicaid eligibility is increased to 133 percent of the federal poverty level, and on the House side it’s 150 percent. From the perspective of a governor, how would that affect things at the state level?

Gov. Pawlenty: Well, it will vary from state to state, because different states have assumed different levels of responsibility or initiative for those populations, but as a general rule, it’s going to cost the states more money, and in many cases it’s going to cost the states dramatically more money. It’s another unfunded liability from the federal government, which they will manage as a big federal bureaucracy without much innovation, without much ability to reform and without much ability to improve.  We’ve seen that already in the existing Medicaid program, and now they want to expand it and send some of the bill to the states. I would add that every major entitlement program that the federal government currently runs is on a pathway to bankruptcy or insolvency. That includes Social Security, Medicaid, and Medicare. With that track record, why in the heck would we give them another one to run and manage? In addition to moving in the direction of having the federal government take over the health care system or additional parts of it, it is just directionally flawed and philosophically flawed. 

TAS: On the Senate side, there’s a provision that would allow states to opt out of the government plan. As governor of Minnesota, if the Senate legislation were to pass as currently designed, would you recommend that the state of Minnesota opt out of the government plan or opt in?

Gov. Pawlenty: First of all, let’s call this what it is. This isn’t opt in or opt out, this is government-run health care, and their rationale for having a government-run health care plan is that they want to quote “keep the private sector honest.”  That’s what the president and Democratic members of Congress have said, and it is ludicrous. If you take that logic to the next step then, if we don’t like the price of toothpaste are we going to have government-run Wal-Marts or government-run Targets? If we don’t like the price of gasoline is government going to takeover the filling stations and oil refiners in the country like they have done in South America? I mean, it’s a preposterous mindset. So, they obviously want some sort of government-run plan, and they’re thrashing about trying to get the camel’s nose under the tent, or foot in the door. They couldn’t get it straight up in the bill, so now they’ve focused on triggers, opt ins, opt outs. I think it should be out of the bill completely because I think it’s a bad idea. The opt out is a sham. It’s a charade. The word out of Washington is that if you were to choose to opt out as a state, you can opt out of the benefits, but you can’t opt out of the tax increases to support the benefits. So all you’d be doing is paying for other states’ participation in the program. I don’t like it. I would prefer that it didn’t exist. I would like Minnesota to opt out, but it looks like they’re not really allowing you to opt out. It’s a sham. They’re allowing you to opt out of the benefits, but they’re not allowing you to opt out of paying for it.

TAS: What about their argument that it’s not going to derive money from general tax revenue, but only from the premiums it collects? In other words, that it will be self-sustaining and won’t need government revenue?

Gov. Pawlenty
: First of all, I don’t believe that. But second of all, managing and operating a plan with the full force and effect of the government and the police powers of the government to compete with private enterprise on the marketplace gives them enormous advantage and they can probably intimidate some of their competitors. And if they’re going to go into the marketplace and essentially dictate pricing of what they’re going to pay providers, that gives them that big of an advantage, and it’s frightening that they think that’s okay from a philosophical standpoint.