Governor Pawlenty’s supplemental budget proposal would cut health and human services by about $350 million in the FY 2010-11 biennium. The Governor also proposes to make his unallotments permanent, which increases the level of cuts to more than $1 billion in FY 2012-13. While a solution to the state’s budget deficit will require some cuts, significant reductions to services which help families survive this economic downturn seem counter-productive.
The state’s Health Care Access Fund (HCAF) would play a significant role in solving the state’s general fund deficit in the Governor’s proposal. The HCAF pays for MinnesotaCare, the subsidized health insurance program for working Minnesotans. The HCAF is funded by a tax on health care providers and the premiums paid by MinnesotaCare participants. The Governor recommends several major reductions in HCAF expenditures, then transfers $159 million of these savings from the HCAF to the general fund to help balance the state’s budget. In FY 2012-13, spending reductions in the HCAF would grow to $572 million.
Some of the cuts impacting services funded by the HCAF include:
- Eliminating MinnesotaCare eligibility for childless adults with income between 75 and 250 percent of the federal poverty guidelines (for an individual, that’s income between $8,123 and $27,075 per year). An average of 21,500 fewer Minnesotans per month would have health care coverage as a result.
- Eliminating access to certain kinds of health care for individuals on MinnesotaCare and Medical Assistance (MA) – including rehabilitative services (like occupational and physical therapy).
- Eliminating a reduction in MinnesotaCare premiums scheduled to take effect in FY 2012-13. The extra cost will result in families dropping from the program.
The Governor also proposes cuts that would impact individuals with disabilities, including:
- Counting all Supplemental Security Income (SSI) income of disabled household members as income in the Minnesota Family Investment Program (MFIP), Minnesota’s welfare-to-work program. As a result, 4,000 families would lose the cash assistance component of MFIP and would only be eligible for food assistance and another 500 families would lose all eligibility for MFIP benefits.
- Restrictions on the number of individuals with disabilities that can access home-based Medicaid services, which allows them to avoid being moved into a more expensive and confining institutionalized setting. There are currently 3,900 individuals on the waiting list for these services.
- Permanently eliminating funding for Minnesota Supplemental Assistance – Special Diets (MSA-SD), which helps very low-income elderly and disabled adults pay for special diets required by a medical condition (this program was previously unalloted by the Governor). And also eliminating funding for the other element of MSA which provides special needs payments for some meals, housing repairs and fees for guardianship. More than 4,000 individuals would be impacted.
Cuts will also impact families and individuals struggling in this economy, including:
- Eliminating General Assistance, a safety net program for adults without dependent children. Thousands of Minnesotans will lose their monthly grant of up to $203 per month (up to $260 for a couple). Some funds would be used to create a short-term emergency cash assistance program to help at-risk adults facing a crisis situation pay for housing, utilities or other basic needs.
- Eliminating the Minnesota Food Assistance Program (MFAP) that provides food benefits for low-income families that are legal residents, but non-citizens, impacting 200 to 250 individuals.
- $28 million in federal welfare-to-work funds that could have been used to help low-income workers during this recession would instead directed to the general fund to balance the state’s budget.
- Eliminating services helping individuals struggling with mental health issues, including stopping the implementation of several new programs for children and adults. The Governor also eliminates a special enhanced payment that provides a higher level of health and psychiatric care for the most difficult to reach homeless population – those with serious mental illness. This in-depth program helps these chronically homeless individuals attain and maintain stable housing.
Health care providers would also be impacted by the Governor’s budget proposal:
- The Governor proposes to cut reimbursement rates for continuing care providers by 2.5 percent. This reduction would impact home and community-based programs, home personal care services, nursing facilities, ICF’s/MR’s and continuing care grants. This reduction would come on top of a 2.58 percent reduction implemented last session. The Governor also proposes to phase out the requirement that prevents nursing facilities from charging private pay residents higher rates than the rates set by the Medical Assistance program.
- The Governor would also cut fee-for-service rates for inpatient hospital care for Medical Assistance and MinnesotaCare by three percent beginning in FY 2011. Reimbursement rates for managed care programs would also be reduced by a proportional amount, although this wouldn’t be implemented until January 1, 2011.
- There are also several proposals that would particularly impact health care in Greater Minnesota. The Governor would eliminate a special payment to hospitals in Greater Minnesota that ensures their reimbursement rates for certain procedures are close to metro area reimbursement rates. The Governor would also make it more difficult for providers to qualify for a higher reimbursement rate for dental care. This is likely to add to the severe shortage of dental providers in Greater Minnesota.
Keep in mind, the Governor will need to make some adjustments to this initial supplemental budget proposal to reflect changes in the February Forecast and the recent agreement to reform the General Assistance Medical Care program.
-Christina Wessel
