It appears likely that the state of Minnesota will get a $408 million boost in health care funding from the federal government, according to Tom Hanson, Commissioner of Minnesota Management and Budget (MMB). However, it is very unlikely that the Minnesota legislature will know for sure before May 17 – the date the legislature is constitutionally required to adjourn for the session.
At issue is an anticipated increase in federal dollars for Medicaid (known as Medical Assistance in Minnesota), health care for low-income people whose costs are shared between federal and state governments. The increased federal share is sometimes called the FMAP extension, with FMAP standing for Federal Medical Assistance Percentages. The federal health care funding issue has been hanging over the entire session. The federal government’s initial stimulus package provided the states with additional federal health care funding – Minnesota received $1.8 billion – so that people would not lose their health care during these tough economic times, and to prevent additional cuts in vital services as states responded to the economic crisis. This additional health care funding ends December 31, 2010. The question is whether Congress will provide another six months of additional federal health care dollars, estimated to bring $408 million to Minnesota.
The Governor’s budget proposal included the anticipated federal dollars, as do the House budget targets. The legislature has hoped for more clarity before it wraps up its final budget bills and adjourns.
Hanson gave an update Tuesday to the Legislative Commission on Planning and Fiscal Policy’s Subcommittee on a Balanced Budget, a body that includes both Senators and Representatives. Hanson and his staff had been on a conference call with the National Governor’s Association (NGA) and the National Association of State Budget Officers. Hanson reported they said that the FMAP extension was passed by the Senate and awaiting action in the House. There was an 80 percent probability it would pass.
When Minnesota officials asked about the likelihood of Congressional action before May 17, Hanson said they were told it was “significantly unlikely.”
The FMAP extension is part of a larger bill that extends unemployment insurance and COBRA insurance assistance. These two supports for unemployed workers were part of the Recovery Act. Without Congressional action, they will sunset by the end of May. Hanson said NGA felt that Congressional action would likely occur May 24-29.
The bill also contains unrelated tax provisions that could pose stumbling blocks to its passage.
Other national groups don’t appear as optimistic as the NGA. Legislators received an Action Alert from the National Council of State Legislatures (NCSL) that said the FMAP extension was “on the ropes.”
Senate Minority Leader David Senjem asked about the seemingly contradictory messages between NCSL and the NGA. Hanson called the situation fluid.
Questions were raised about what the state’s contingency plan is. Senate Majority Leader Larry Pogemiller said the state had about $200 million in reserve. If the $408 million did not get approved by Congress, the state would have about a $200 million gap. (Hanson said the $200 million figure might be a bit high.)
It is unfortunate that policymakers will not have certainty about the federal Medicaid dollars before the end of session. It would be prudent for policymakers to negotiate a “Plan B” that determines a decision point that, if Congress has not yet acted by that time, policymakers will determine an alternative plan of action. That process should be transparent and include input from the public and stakeholders.
-Scott Russell
