Not only must lawmakers balance a $5 billion deficit for the next biennium, they must work to avoid deficits in future biennia. Even if they find $5 billion today, state spending is projected to outpace revenue collections for decades to come. The Minnesota Budget Trends Study Commission [PDF] projects that spending will annually grow by 5.4 percent between 2008 and 2033 while revenues will grow by only 3.9 percent.

Guess where all the spending growth takes place?  Yep, health care. Health-care spending is projected to annually grow by 8.5 percent.

Obviously that's not sustainable, and that's why Republicans in the House and Senate are moving a number of legislative provisions to fundamentally redesign state health care programs.

Replacing MinnesotaCare with a state subsidy for individually owned private health plans is one of the key parts of the effort to redesign how the state provides health care to the poor. As Grow noted, this can save $100 million on childless adults and up to $600 million if everyone is included.

Multiple benefits of premium subsidies
The beauty of premium subsidies is that their benefits extend well beyond budget savings.

• A premium subsidy provides more portable and continuous insurance coverage. With a subsidy, the individual owns the coverage and no longer needs to switch coverage when his or her  Medicaid eligibility changes. Medicaid managed-care programs like MinnesotaCare do not promote continuous coverage.
   
• A premium subsidy provides more continuous access to care. Coverage continuity translates to provider continuity, which studies show leads to higher quality care.
   
• A premium subsidy provides incentives for insurers to innovate and add value for low-income enrollees because insurers will need to compete for this new market of customers.
   
• A premium subsidy empowers parents to choose one plan for their whole family with one network of doctors.
   
• A premium subsidy provides more financial protection because private insurance policies are not subject to MinnesotaCare's $10,000 cap on in-patient hospital payments.
   
• Maybe most important, a subsidy pays providers at private payer reimbursement rates, which cures a host of problems. Paying private payer rates will (1) expand access to providers, (2) reduce cost shifting, (3) reduce administrative complexities, (4) increase transparency in the program budget, and (5) eliminate any incentive for doctors to provide second-class care.

It's about redesigning, not eliminating
Above all, understand that this is a conversation about redesigning a government program, not eliminating it.

Frankly, some Republicans must be wondering why there wasn't more talk about eliminating the whole program for childless adults. The fact is, most states don't have a health-care program for childless adults. Of those that do, six are closed to new entrants and only five expand income eligibility as high as or higher than Minnesota does.

No doubt some folks will quibble with these points. OK. Then we should discuss those differences. We shouldn't be celebrating the silly political theater that sidetracks that discussion.