RELEASE: Failure to Comply with House File 1 Could Put Minnesota’s Health Care Funding at Risk

FOR IMMEDIATE RELEASE

MEDIA CONTACT:
Sabina Haase, 651.297.8149 
Sabina.Haase@house.mn.gov

Failure to Comply with House File 1 Could Put Minnesota’s Health Care Funding at Risk 

St. Paul, MN — Minnesota faces serious financial and health care risks if Democrats refuse to comply with the requirements outlined in House File 1 (HF1). While none of the potential federal actions are automatic, the consequences of noncompliance could be significant and costly for Minnesota families, providers, and taxpayers. 

HF1 ensures Minnesota aligns with federal requirements under HR1. Failure to do so could invite a range of federal responses from the Centers for Medicare & Medicaid Services (CMS) and other federal agencies that would directly impact the stability of the state’s health care system. 

If Minnesota does not comply, the following risks could become reality: 

• Denial of Critical Waivers: CMS could refuse to approve key waivers, including 1332 and 1115 waivers, which allow Minnesota to expand and tailor Medicaid and Medicare programs to meet the specific needs of our residents. 
• Blocked Innovation: Federal officials may deny waivers that allow Minnesota to experiment with new and innovative health care delivery models. 
• Rejection of State Plan Amendments (SPAs): Minnesota could lose flexibility to modify or improve existing Medicaid programs if CMS declines to approve amendments. 
• Reduced Federal Funding (FMAP): The federal government could lower the Federal Medical Assistance Percentage (FMAP) for certain services. This has already occurred under HR1, where the federal match for Medicaid emergency care provided to undocumented immigrants was reduced from 90% to 80%. Similar reductions could increase costs for Minnesota taxpayers. 
• Conditions on Loans and Grants: Federal loans and grant funding could come with added conditions or restrictions, limiting Minnesota’s flexibility and increasing administrative burdens. 
• Increased Federal Oversight: CMS could intensify Medicaid integrity audits and compliance checks on Minnesota programs relative to other states, potentially delaying services and increasing administrative costs. 
• Targeted Federal Policy Actions: The federal government has broad discretion in setting policy criteria. While hypothetical examples may seem unlikely, federal agencies could craft funding conditions based on characteristics unique to Minnesota, placing our state at a disproportionate disadvantage. 

State representative and Health Committee chair Jeff Backer (R-Browns Valley) released the following statement. “The bottom line is clear, Minnesota’s health care system relies heavily on federal partnership and funding. Noncompliance with HF1 could jeopardize billions of dollars in federal support and limit our ability to serve vulnerable populations. Lawmakers must prioritize fiscal responsibility and the stability of our health care system. Political disagreements should not come at the expense of Minnesota families who depend on Medicaid services, nor should they put additional financial strain on taxpayers.” 

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