Many have objected – including us – to the hundreds of millions in unsubstantiated savings that was included in the House and Senate health and human services budget bills. We all wondered, what would $1.8 billion in cuts really look like? Now we know.
On Wednesday, both the House and Senate passed the health and human services conference committee agreement detailing $1.8 billion in cuts, $1.6 billion of that in the general fund. To reach this target - a 13 percent cut from base spending for FY 2012-13 – the conference agreement includes proposals that will significantly impact the health and well-being of families in our state. More than 100,000 Minnesotans will lose access to affordable health insurance, hundreds of individuals with disabilities will be forced out of their communities and into institutionalized settings, and working parents will face more obstacles in achieving self-sufficiency. We wanted to look at a few of these proposals in more detail.
The conference agreement repeals health insurance coverage for tens of thousands of extremely low-income adults without children through Medicaid (known as Medical Assistance in Minnesota). One of Governor Dayton’s first actions in office was to take advantage of the opportunity to turn an all state-funded program into a better health care option that receives matching federal funds. Reversing this action cuts general fund spending by $921 million in FY 2012-13, but the state will also lose those federal matching dollars. To provide some minimal level of health care for these individuals, the conference agreement revives a limited state-funded General Assistance Medical Care (GAMC) program, capping spending on care for this population with significant health challenges at just $160 million a year (plus some additional funding for a prescription drug pool). Based on our previous experience with this limited GAMC program, we know that it will be difficult for individuals to access care because health care providers are reluctant to participate, particularly in Greater Minnesota.
The conference agreement creates a Healthy Minnesota Contribution program that takes away health care coverage for adults without children over 125 percent of poverty and parents over 133 percent of poverty on MinnesotaCare. To get perspective, this would impact individuals making less than $13,613 a year or a family of three making less than $24,645 a year. These Minnesotans would be given a subsidy that they could use to help purchase health insurance on the private market, but they are unlikely to find coverage options with a reasonable deductible and copayments at a premium they can afford. The proposal cuts $276 million in spending in the Health Care Access Fund (HCAF) in FY 2012-13: this makes it possible to transfer $116 million from the HCAF into the general fund to help resolve the state’s budget deficit. In contrast to the Senate’s original proposal, the conference agreement focuses on populations where the state is most likely to get permission from the federal government to make this change.
Extremely low-income and vulnerable Minnesotans who are unable to work – many of them elderly or disabled – will face an uncertain future as critical support systems are dramatically restructured. The conference agreement would dismantle a safety-net system for around 20,000 Minnesotans that provides them with a small monthly cash benefit, offers additional assistance for individuals who require a special diet for medical reasons or other special needs, and makes emergency funds available to prevent them from losing their housing or having their utilities turned off if they face a crisis. The conference agreement eliminates General Assistance and other emergency assistance programs and turns them into an optional Adult Assistance block grant to counties, reducing the resources that available to serve these individuals by $20 million in FY 2012-13.
There are also a number of cuts that will directly impact individuals with disabilities and the elderly, causing hundreds of people to receive a reduced level of community-based services and forcing hundreds of others into institutionalized settings. The conference agreement places significant limits on access to home-based Medicaid services, which help individuals remain in their community and avoid entering a more expensive and confining institutional setting. In addition, the agreement will further impact these individuals by reducing funding for the institutions and community-based providers that serve them.
Minnesota families working to move from poverty to self-sufficiency will find it harder to make that transition. For example, the conference agreement increases the barriers for low-income families eligible for the Minnesota Family Investment Program (MFIP) to receive assistance in a timely way, get the training necessary to qualify for higher-paying jobs, and own a reliable car that can get them to and from work. And if there is a severely disabled adult living in their household, the family will see their cash assistance reduced by $50 a month. Child care for working families will be less accessible under the conference agreement. A series of program changes and budget reductions will create barriers, increase costs and reduce the information available to parents.
This is just a brief look at the cuts in this conference agreement that will leave tens of thousands uninsured, force hundreds into institutionalized care and place more roadblocks in front of families struggling to make a living in this slow economic recovery. It is almost certain that Governor Dayton will veto the bill when it reaches his desk.