House omnibus health and human services bill moving quickly

The House health and human services omnibus bill was passed out of committee on Tuesday night (actually, more like early Wednesday morning). The bill had to try to balance the needs of Minnesotans struggling during these tough economic times with the assignment to reduce the state’s general fund deficit by $155 million.

The bill was met with mixed reactions.

On the positive side, the House omnibus bill does not include some of the more controversial cuts to health care, services to the elderly, and support for Minnesotans in crisis that were proposed by the Governor. For example:

  • There are no cuts to General Assistance, a safety net program for adults without children.
  • Families with a disabled family member will not see a decline in the size of their MFIP grant.
  • Maintains health care 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) in MinnesotaCare.
  • There are no cuts to Minnesota Supplemental Assistance – Special Needs, which helps very low-income elderly and disabled adults pay for meals, housing repairs and fees for guardianship.
  • The bill does not adopt the Governor’s 2.5 percent permanent rate reduction for continuing care providers, including home care services and nursing homes.
  • Some recent reductions and unallotments of critical access dental care are reversed in the bill.
  • None of the Governor’s unallotment reductions for the FY 2010-11 biennium are made permanent.

Many are pleased to see that the House omnibus bill implements the early expansion option for Medicaid provided under federal health care reform (which we’ve blogged about in more detail). Under the House bill, very low-income adults without children would receive health care coverage through Medicaid (called Medical Assistance in Minnesota), instead of through the recently-passed General Assistance Medical Care (GAMC) agreement, starting on January 1, 2011. Expanding Medicaid coverage avoids the implementation challenges that have arisen around the GAMC agreement, and offers a more clearly defined benefit set for participants and higher levels of reimbursement for providers. The down side is that the expansion is funded mostly out of the Health Care Access Fund, leaving the fund with a $410 million deficit by FY 2013 (although we should note that the HCAF was projected to have a $410 million deficit under current law too).

Of course, when a committee has to cut $155 million from its budget, there is also going to be some bad news.

  • There are more than $22 million in cuts to mental health services for children and adults, temporarily eliminating several grant programs.
  • Families on the Minnesota Family Investment Program (MFIP) would be impacted by several changes. Families could not own a car with a value exceeding $7,500, they would exit the program when their income reaches just 110 percent of poverty, and those receiving subsidized housing would have their assistance reduced by $100 per month. In addition, $4 million was cut from an initiative to create short-term skill-building jobs.
  • The Children and Community Services Act (CCSA) grant, which funds a variety of social services provided at the county level, is permanently cut by $10 million per year. This is in addition to recent budget decisions and unallotment actions that have already reduced funding for these critical services for vulnerable children and adults.
  • The House adopts the Governor’s proposal to restrict 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.
  • Inpatient hospital reimbursement rates would be reduced by 7.5 percent starting in FY 2012, likely resulting in hospitals cutting back their level of services. However, two hospitals (Children’s of Minnesota and Gillette Children’s) would be exempt from the rate increase and would actually split $7 million in additional funds in FY 2012-13.
  • There is a three percent reduction in reimbursement rates for non-primary care providers.

The House is also relying on an anticipated $408 million from the federal government extending an enhanced Medicaid matching rate (known as FMAP). Congress, however, is unlikely to pass the additional federal Medicaid dollars until late May - after the state legislature adjourns for the session. The bill includes language that would ensure Minnesota would remain eligible for these federal funds if Congress passes the extension.

The bill is moving quickly through the process – it passed out of the House Finance Committee on Wednesday morning and heads to the House Ways & Means Committee on Monday morning. The Senate is poised to release its health and human services bill Thursday morning.

-Christina Wessel

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