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Pioneer Editorial: Competing health plans worth trying

While attention focuses on Washington, D.C., this week on what direction health care reform will take, Gov. Tim Pawlenty on Tuesday created his own stir by releasing his own health care reform measures for Minnesota.

At first blush, one of his three proposals -- to allow Minnesotans to purchase health insurance from other states -- has promise and should be studied further.

The other two -- to require publicly subsidized health insurance programs to price their services on quality and cost, and include consumer-driver incentives in MinnesotaCare -- leave much to be desired.

On the first measure, however, much has been said about a lack of competition among health insurers, with only three major plans in Minnesota. Currently, Minnesotans are prohibited from buying health insurance products from other states. Gov. Pawlenty's plan would allow greater choice for Minnesotans in the marketplace, and hopefully competition will bring health insurance premiums down.

There are valid concerns that opening the door may bring down the level of coverage as well, but the governor is also proposing that those out-of-state providers adhere to certain minimum standards, such as being accredited by the National Association of Insurance Commissioners and possess a certificate of authority in Minnesota. And the insurance company must abide by Minnesota's claims practices and other consumer protection laws.

Broadening the marketplace for people to shop for the insurance coverage and costs that suit them well seems like a no-brainer. It's a measure that the Legislature, when it convenes in February, should give serious thought.

The governor's other two provisions also seek to increase choice for consumers but on the medical services side on the coin. There we have concerns.

Gov. Pawlenty cites the state employee health care program, Minnesota Advantage, as a good example as state employees choose any clinic available to them in a private market system. But they pay more out-of-pocket if they pick one that is more costly and less efficient.

That system may work well in the metro area where competition among providers is possible, but we fear that consumers in rural areas where there may be only a single provider could see higher bills. Rural consumers can't travel to the metro area for their medical services that may be cheaper because of economy of scale, and shouldn't be penalized by sticking with the sole provider in their community.

Better would be a system where rural providers are given an equitable reimbursement rate for the publicly subsidized services that they provide.

Hopefully, the governor's proposals will also lead to a discussion of how to replace the health care he vetoed for the state's poorest residents.