June 3, 1991

To the People of Minnesota:

On May 20, 1991, the Legislature passed House File 2 which promised all Minnesotans health care insurance by 1997.

About six weeks ago, Senate Majority Leader Roger Moe expressed serious reservations about this proposed health care plan, saying that “you are talking not about a fiscal time bomb but a fiscal atom bomb.”

Then, on May 20, the very last day of the legislative session during final floor action on the bill, Senator Don Samuelson, Chair of the Senate Finance Committee’s Health and Human Services Division, voted against the proposal.  He said it was “certainly not an easy vote to cast” but that he was doing so because “it would probably cost us in the neighborhood of $1 billion.” 

Minnesota’s largest daily newspapers declared that this bill could be “a prescription for disaster” (St  Paul Pioneer Press, May 12, 1991) and that the bill “makes false promises about what it does and costs, and offers scant reform of a bloated health-care system that pampers many but excludes an unlucky few.” (Star Tribune, May 24, 1991).

I agree with the thoughtful but guarded cautions expressed by these people.  Therefore, I have vetoed House File 2, the bill providing state subsidized health care insurance.  I am now asking legislative leaders to work with me, the Commissioners of Health, Human Services and Commerce, health care providers and practitioners, public policy groups and health insurance companies to continue developing an affordable solution to the health care access problem.

Our collective charge will be first to fashion a responsible proposal that serves all of Minnesota’s citizens well, a proposal that Minnesota taxpayers can afford.  Then we need to take the time to submit the plan to extensive public scrutiny.

I will begin work immediately to revisit this issue.  On June 20, I will participate in regional hearings on rural health care sponsored by the National Governors’ Association in Sioux Falls, South Dakota.  The report on this and three other regional hearings across the country will be presented at the Association’s meeting in August.

Health care reform is the focus of the National Governors’ Association this year.  A major outcome of their effort will be a report detailing options states can use to control health care costs and to expand access to health care.  I intend to take full advantage of this information as we work together here in Minnesota to find a solution that provides care for the uninsured without pricing those Minnesotans who now have insurance out of the market, or raising taxes to unacceptable levels.

Because the term “universal health care” has been too loosely attached to House File 2, this bill is perceived by many people as the answer to the problem.  Unfortunately, it is not universal.  At current funding levels, 90 percent of the population who want and need it will not be covered.

And so, reluctantly but with full commitment to reaching a more positive and sustainable solution, there was no honest option but to reject this legislation.

I did not make this decision to veto lightly.  40 percent — or $13 million of the allocated $32.5 million — would be spent on administration and creating a new bureaucracy.  The Charities Review Council in Minnesota sets 30 percent as the maximum for administration.  Why should government be allowed more?

I have numerous other serious concerns about this legislation:

It puts the state and Minnesota taxpayers at great financial risk at a time when we are already coping with the effects of financial shortfalls.

Although it has been billed as universal health care, it will cover only a few; further, it does not deliver the kind of health care coverage that people are expecting and want.

It requires all Minnesotans to have health care coverage by 1997 without fully identifying how taxpayers will pay for it.

It will increase health insurance premiums for many Minnesotans who are currently insured and could force them to join the ranks of the uninsured.

It will adversely affect the ability of private health insurance companies to continue serving individuals and small employers.

It does not bring about reforms that would cut the escalating cost of health care by assuring that all of the state’s health care systems concentrate on necessary and basic health care.  This must occur prior to establishing a universal program for all Minnesotans.

Dedicating $32 million of our precious resources during these uncertain economic times to an untried and unproven program — the Minnesotan’s Health Care Plan — would not be prudent, especially since this program fails to meet the needs of the people of Minnesota.  It has been billed as a universal plan when in reality it will provide inadequate coverage to only some people because of limited funds.

Earlier this year I proposed a health care pilot project for Minnesota to learn more before proceeding on a statewide basis with such a costly long-term commitment by the taxpayers of Minnesota.  I continue to believe this is a better approach.  I thought we should provide needed health care to about 12,000 people to learn about their health care needs and how best to treat and fund those needs.  We can use this information to develop a program in which we can all take pride — one which would have full input from the practitioners and most importantly the consumers — the group it must serve well.

Incidentally, this also is the approach being taken by most other states.  The June 3 issue of Fortune magazine pointed out that “all plans for universal health care are either gone or reduced to demonstration programs. . .”

As strongly as I believe all Minnesotans should have access to health care, I do not believe House File 2 is a responsible solution.  In summary, this bill creates false hopes, provides only very limited care to a few people now and mandates exorbitant budget-busting costs in later years.  It builds in no cost controls, it might encourage people to come to Minnesota for health care, it will increase rates for small group employers and for young, healthy people and it will drive up the cost of insurance premiums for many, if not most, Minnesotans.

For all of these reasons, I am vetoing House File 2.  In doing so, I want you to clearly understand that I have not wavered in my commitment to address this problem.  My hope is that the 1992 legislature will work closely with me to develop a proposal that works better for the people of Minnesota now and in the future.

                            -Arne Carlson