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House passes HHS budget bill

Published (5/6/2010)
By Lauren Radomski
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Rep. Thomas Huntley presents the omnibus health and human services bill on the House floor May 4. (Photo by Andrew VonBank)The House passed its omnibus health and human services finance bill 79-54 on May 4 hours after Gov. Tim Pawlenty vowed to veto the legislation.

Sponsored by Rep. Thomas Huntley (DFL-Duluth), HF2614 would have a net impact of $165 million to the General Fund in the current biennium. It includes cuts to health and human services, public health and early childhood spending, but also includes new tax revenue and surcharges.

The bill also designates $38 million in fiscal year 2011 and $53 million in the 2012-2013 biennium for Minnesota’s participation in a federal health care reform initiative that would allow more people — including the General Assistance Medical Care population — to enroll in the state’s Medicaid program.

More cuts may be coming.

Initially, both the governor and House lawmakers proposed using $408 million in enhanced Medicaid match funding to balance the budget. But at a press conference May 4, Pawlenty called the outlook for receiving the federal funding “unclear at best,” and directed legislators to make further cuts in case the money doesn’t arrive.

Pawlenty also warned he would veto the bill because of its costs in future biennia, or use his unallotment authority to reduce the bill’s size.

On the floor, some House members said they would prefer to make cuts instead of leaving the decisions up to the governor.

“I don’t want to vote for this bill,” said Rep. Tom Rukavina (DFL-Virginia) after more than nine hours of debate. “I’m tired of cutting. I’m tired of hurting people. But I’m going to vote for it because I’m afraid of what Pawlenty’s going to do.”

What’s in the bill

The House proposal includes cuts to non-primary care physicians, mental health grants, chemical dependency funding and children’s protective services. Cuts to hospitals would be delayed until next year, and General Assistance — a cash assistance program the governor had proposed to reduce — would remain intact. An increase in the surcharge on HMOs is designed to capture additional federal funding.

Nursing homes and long-term care facilities, which are untouched in the bill, would actually see a boost in funding under a hotly contested amendment successfully offered by Rep. Frank Hornstein (DFL-Mpls). It would eliminate tax breaks for companies with operations overseas — what some people consider “loopholes” in the tax code. The new revenue would be used to increase operating rates for nursing homes and long-term care facilities and to fund grants to services for the elderly and people with disabilities.

Amendments to the omnibus health and human services bill pile up on a bench in the House Chamber during a marathon nine hour debate May 4. (Photo by Andrew VonBank) Republicans railed against the idea, saying it was inappropriate to change tax policy to generate savings in another budget area, particularly by way of an amendment. Rep. Mark Buesgens (R-Jordan) called adoption of the amendment “blood and guts hardcore partisan politics at its ugliest,” and accused Democrats of trashing House rules.

The floor debate also included several unsuccessful attempts by Republicans to opt out of provisions in the federal health care reform law. Rep. Matt Dean (R-Dellwood) offered an amendment that would lift a requirement to obtain individual health insurance, while a proposal from Rep. Paul Torkelson (R-Nelson Township) would delay Medicaid expansion in order to fund rural nursing homes.

Legislators did find common ground on an idea that also sits well with the governor: allowing the sale of out-of-state health plans. Rep. Jenifer Loon (R-Eden Prairie) successfully offered an amendment that would allow these transactions, provided plans comply with Minnesota laws and their insurers are vetted by the Department of Commerce.

Another amendment that received popular support was a proposal from Rep. Al Juhnke (DFL-Willmar) to reduce the salaries of certain Department of Human Services managers until employees of State Operated Services who have had their hours reduced since last spring are offered a return to full-time employment.

An uncertain future

Despite some compromises, lawmakers remained largely polarized on the bill. Republicans characterized it as “Washington-style” legislation that would spend money the state doesn’t have at a cost to future generations.

“Unfortunately, I think this bill reflects a lack of innovation, of reform and in a sense, of honesty, because you are in fact making promises you can’t deliver on,” said Rep. Steve Gottwalt (R-St. Cloud). “There is no way that you can cash-flow this bill the way it’s set up.”

Democrats disagreed, saying the bill takes initial steps toward reforming health care delivery and payment. Perhaps most importantly, Huntley said, the Medicaid expansion would solve the problem of how to care for GAMC enrollees, many of whom are homeless or mentally ill. Most of the hospitals that qualify to participate in a new, less expensive GAMC care model have opted out.

“Sometimes we have to admit failure,” Huntley said. “What we passed won’t work and we need to do something to correct that. And that’s what this bill does. It corrects that problem, it helps our hospitals and it takes care of the most vulnerable people in this state.”

The Senate amended the bill before passing it 42-19 May 5. A conference committee is expected to try to reach an agreement. Sen. Linda Berglin (DFL-Mpls) is the Senate sponsor.

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