Health care providers, advocates feel budget sting

Signing budget MPR Photo/Jeffrey Thompson

Advocates, nonprofits and health care providers continue to scrutinize a state Health and Human Services budget that could restructure social services and public healthcare in Minnesota for years to come.

Gov. Mark Dayton signed the department's $11.4 billion budget into law Wednesday along with other bills that ended the state government shutdown.

The budget bill that emerged Wednesday preserved health insurance coverage for the state's poorest residents. It made slight cuts in welfare spending and services for people with disabilities. And it cut payments for health care providers and created incentives for hospitals to reduce emergency room visits and readmissions.

"We see this budget as protecting the most basic services to people and reshaping delivery so that we can purchase for value," said Anne Barry, the deputy commissioner of the Department of Human Services.

Others put it a different way. Rachel Voller gathered around a table with colleagues at the Mental Health Consumer Survivor Network of Minnesota to examine the just-released bill that will now guide much of their work.

"There wasn't champagne glasses and us thinking that we did a fabulous job and got all the programs in place and all the funding in place that we wanted," said Voller, the group's acting director. "However it wasn't a pity party with us crying and us leaning on one another's shoulders."

Many advocates had worried the programs would face even deeper cuts. For months, it's been clear that the DFL governor and the Republican-controlled Legislature would clash over funding for health and human services programs. Dayton was elected on a promise to raise taxes on the rich to avoid deep cuts in services for the poor. Many Republican lawmakers were elected on a promise to cut government spending without raising taxes.

“There wasn't champagne glasses and us thinking that we did a fabulous job and got all the programs in place and all the funding in place that we wanted.” Rachel Voller, Mental Health Consumer Survivor Network

That left funding for the Department of Human Services up in the air. In March, Republican lawmakers said the health and human services budget needed to be cut by $1.6 billion.

The figure worried Rep. Jim Abeler, R-Anoka, who chairs the House Health and Human Services Finance Committee.

"The target I had originally was extremely challenging, and it would've been difficult to implement, frankly," he said.

Abeler said he was "relieved" when Dayton struck a deal with Republican legislative leaders to raise another $1.4 billion in revenue. The plan, which relies on borrowing against future payments from a settlement with tobacco companies and delaying payments to schools, has been criticized by lawmakers of both parties.

But Abeler said the money staved off more drastic reductions to programs. The health and human services budget received $559 million of the extra money. Much of it went to fund the state's ongoing enrollment into the expanded Medical Assistance program, he said.

The program provides health insurance coverage for low-income and disabled residents. The federal health care overhaul allowed Minnesota and several other states to enroll early in an expanded version of the program. Dayton made the issue a priority in his campaign, and on his second day in office, he signed an order to expand Medical Assistance to cover more than 90,000 Minnesotans.

Republican lawmakers had opposed the program's expansion, but Dayton said he wouldn't sign a bill that removed Minnesota from the program.

Barry, of the Department of Human Services, said funding for the expanded program was one of the most significant accomplishments in the budget bill.

Other programs weren't so lucky. Here's a list of some of the cuts:

The budget places restrictions on child care assistance. It reduces payments for child care providers who care for children from low-income families.

It makes it more difficult for some low-income adults to receive General Assistance, the state's cash assistance program for people who cannot work due to an illness or disability.

It cuts funding for emergency assistance to help families pay past-due rent and avoid eviction. It makes it more difficult for families to access the state's family welfare program.

And it moves about 8,000 adults who earn more than 200 percent of the federal poverty guideline - about $22,000 a year - off MinnesotaCare, the state's health insurance program for people who cannot afford coverage. Instead, they'll receive vouchers to buy private insurance.

The amount varies, but critics say it's not enough to buy decent coverage. For example, people ages 19 to 29 would receive about $116 per month.

"If you and I were going out and looking with that amount of money today on the individual market, I don't think they can purchase anywhere near the level of similar coverage that they're currently receiving in the MinnesotaCare program," said Ghita Worcester, a spokesperson for UCare, a Minnesota nonprofit that offers health care plans.

But Abeler said that although people might pay a bit more for insurance, they'll probably get a much better product.

He points to MinnesotaCare's limits on hospital coverage as one example. The plan caps inpatient hospital care at $10,000 a year, plus a $1,000 deductible. Abeler said many enrollees would be better off with a private plan.

"This would be a commercial product that would pay normal prices to clinicians and have a normal, million dollars or so, hospital cap," he said. "So they could get better care and have real insurance."

Abeler said if the voucher program doesn't work, he's willing to try something else. He said it made sense to experiment with the program, particularly because the 8,000 or so enrollees were slated to lose all MinnesotaCare coverage under both the governor's and Republican lawmakers' initial budget proposals.

Many organizations are still trying to figure out exactly how they'll be affected by the health and human services bill.

Ron Brand, the executive director of the Minnesota Association of Community Mental Health Programs, is writing a letter to his members to explain the new budget.

"There are so many different parts of the health and human services bill that affect people who are more vulnerable," he said. "And so you end up having to look and see how different services that need to go together in order to make the right package - housing, plus treatment services or support services, for example."

Brand and others said we may not understand the full impact of the health and human services bill for some time to come.

Related: At a glance: Health and Human Services budget