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Capitol View®
Catharine Richert

GOP health plan would end MinnCare, shift payments

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Republicans in the Minnesota House took the wraps off a health and human services budget bill Thursday that cuts about $1 billion over the next two years, money Republicans want to use to help pay for tax cuts.

The bill ends MinnesotaCare, shifts payments to insurance companies to future years,  cuts Human Services Department spending and adds money for nursing homes.

The bill's sponsor says it's designed to increase access to health care in the state.

"Our omnibus bill seeks to reconnect Minnesotans with the best health care in the country. Sadly, in recent years that care that has been unavailable to many due to high cost, red tape and long lines," said Rep. Matt Dean, R-Dellwood, who chairs the House Health and Human Services Finance Committee.

The $1 billion cut comes despite the state's $1.9 billion budget surplus.

And the cuts in the bill fail to meet an earlier House GOP budget target of more than $1.1 billion.

Gov. Mark Dayton has proposed increasing spending for health and human services by about $284 million over the next two years.

House Democrats said the bill is riddled with budget gimmicks, and that it makes no sense to eliminate MinnesotaCare when the state has a budget surplus.

“The GOP is willing to cut off thousands of Minnesotans from health care in order to pay for tax cuts,” said Rep Tina Liebling, DFL-Rochester.  “At a time when the state is projecting a surplus, this is harmful to Minnesotans and reckless for our economy.  Cutting taxes is not a health insurance plan.”

The biggest savings in the House Republican legislation- about $849 million over two years - come from eliminating MinnesotaCare at the start of 2016, a public health program that’s meant for people who make too much money to qualify for Medical Assistance and not enough to buy their own insurance plan if they can’t get one through an employer.

Dean’s bill would instead require MinnesotaCare enrollees to buy a plan on MNsure, the state’s health insurance exchange. Dean has promised some sort of subsidy to help people pay for a plan on MNsure, but hasn’t said how much. Proponents of the current program worry people will end up paying more.

The savings are drawn from what's known as the Health Care Access Fund, where a tax on health care providers is deposited to help pay for MinnesotaCare.

The provider tax ends in 2018, according to Dean's bill, and House Minority Leader Paul Thissen, DFL-Minneapolis, says that presents a budgetary problem for future legislators.

"There's no money for them to pay for all this new spending in the [GOP's] budget, and we're going to have a huge hole in the general fund," Thissen said. "We're going to be back in the same kind of terrible budget situation we were in three, four years ago."

The bill also directs the Commissioner of Human Services to find $100 million in savings in administrative costs associated with medical assistance for this biennium.

And Dean’s bill will delay $135 million in payments to insurance companies that handle special needs patients into the next biennium.

There is some new spending in the budget bill, including $138 million over two years for nursing homes. The nursing home industry has said that funding isn’t keeping up with services.

"We recognize the most vulnerable and disabled in the state," Dean said. "That's what the priorities of the committee are, and the budget reflects that. It's going to be a pretty difficult bill to vote against."

Patti Cullen, who heads CareProviders of Minnesota which represents nursing home facilities, says it’s a welcome adjustment.

“What [House Republicans] have shown is a commitment to seniors and senior issues is really good,” Cullen said.

The bill also provides a one-time, 5 percent cost of living adjustment for home-based care workers and restores funding for the Medical Assistance for Employed Persons with Disabilities Program to reduce their premium payments.