Late Tuesday night, the House and Senate conference committee came to an agreement on $114 million in reductions to health and human services for the FY 2010-11 biennium. The conference report (HF 2614) takes positive steps to provide health care to very low-income Minnesotans and rejects some of the most painful cuts that were on the table. However, there still are cuts in services that will have a negative impact on struggling families, people with mental illness and other Minnesotans with disabilities.
One of the most positive provisions in the bill provides health care coverage for very low-income adults without children under Medicaid. Health care providers have balked at participating in the recently-passed General Assistance Medical Care agreement – which was intended to provide health care for this population - because of the low payments and high risk to health care providers. Covering these individuals under Medicaid is a better solution, as it provides participants with a clearly defined set of benefits and providers with a higher level of reimbursements than under the GAMC agreement. In addition, the federal government would cover half the costs until 2013, and 100 percent of the costs in 2014. The final agreement pays for the state’s share of the costs, mostly through a surcharge on hospitals, HMOs and facilities for individuals with disabilities. This surcharge allows the state to access additional federal funding. The agreement drops a Senate-proposed surcharge on nursing homes.
For low-income families struggling in this economy, the conference agreement includes some good news: it preserves a job creation initiative that provides short-term skill-building work opportunities, and there is some permanent additional funding for food shelves. The bill does not include House proposals to cut benefits for families working their way out of poverty or a Senate proposal to reduce funding for child care assistance.
However, there are cuts that will impact these families. The agreement eliminates a cash bonus for individuals who successfully leave welfare for work (this bonus helps the state meet federal performance requirements). The agreement also cuts unspent child care funds that could have been used to serve qualified families who are waiting for help. In addition, the agreement redirects $28 million in federal welfare-to-work funds that came to Minnesota under the federal Recovery Act and are intended to prevent cuts to services for very poor children during the recession.
Minnesotans with disabilities struggling to live independently are still significantly impacted by this conference agreement. The agreement limits access to services that allow individuals to live in their homes and avoid costly institutional care, reduces the hours of in-home assistance to help individuals meet basic needs, and it increases fees for parents needing services for their severely disabled children.
For individuals suffering from mental health issues, the conference agreement includes a few reductions, but drops the significant cuts to mental health grants that were proposed by the House.
There is a significant cut to the Children and Community Services Act (CCSA), which provides resources to counties to fund social services for children, adolescents and other individuals. One of the most significant uses of these funds is child protection services. The conference agreement includes a nearly $17 million reduction to CCSA in FY 2010-11 (and a smaller ongoing reduction in FY 2012-13), which is a larger cut than was proposed by either the House or Senate.
The agreement includes a variety of funding cuts to managed care, hospitals and other health care providers. Some of these cuts do not take effect until the FY 2012-13 biennium. There are also smaller cuts to nursing homes and in-home supportive services for low-income elderly Minnesotans. Facing their own budget challenges, these providers may make the difficult decision cut back on staff, reduce their level of services to all clients, or even stop providing some services altogether.
Early in the conference committee process, the House dropped a provision in their bill that would have raised $55 million in revenues in FY 2010-11 to prevent cuts to the elderly and other vulnerable populations. The provision – which repealed special treatment of Foreign Operating Corporations and closes a “tax haven” loophole – was added to the bill as an amendment on the House floor.
The conference committee agreement will now return to the House and Senate floor for final passage – a vote could come as soon as Wednesday evening.
-Christina Wessel
