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Delivery of health and human services

Published (7/15/2011)
By Hank Long
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Health and human services, the second largest slice of the state spending pie, is often considered to be a major sticking point in budget negotiations at the Capitol. Gov. Mark Dayton confirmed that notion when he vetoed an omnibus health and human services finance bill that would have appropriated $10.9 billion over the next biennium.

Which portions of the legislation led Dayton to send it back to the Legislature without his approval? Several, according to the veto letter explaining his opposition to the bill that would have cut $1.8 billion in projected spending for the 2012-2013 biennium.

HF927/ SF760*/CH41

Medical Assistance reductions

“A reduction of this size jeopardizes the progress Minnesota has made in providing health coverage for the uninsured, supporting our seniors in their communities, offering treatment and community support for people with mental illness, and establishing a public health infrastructure that protects all Minnesotans,” Dayton wrote in his veto letter. The governor’s budget recommended $600 million in projected spending reductions for the next biennium.

Republicans pointed out that, although the bill would have made some serious reforms in health and human services spending, it would have increased overall spending by $500 million from the current budget cycle to the 2012-2013 biennium.

The bill’s biggest spending reduction would have come from the elimination of Medical Assistance eligibility for adults without children beginning Oct. 11, 2011. That reduction would have accounted for $921 million in biennial savings. Dayton contended that provision, along with several others, would have eliminated health care coverage for more than 140,000 people.

Rep. Jim Abeler (R-Anoka), who sponsored the bill with Sen. David Hann (R-Eden Prairie), said Dayton’s claim is untrue. He said the bill would have shifted certain individuals from existing programs into other venues, such as General Assistance Medical Care (GAMC), and would have utilized a Coordinated Care Delivery Systems (CCDS) program to maintain care for the majority of the Medical Assistance population. The bill’s reinstitution of CCDS and GAMC programs would have put

$330 million back into the health and human services budget, but Dayton said he believes the CCDS program is underfunded and is a step back from the Medical Assistance program the bill would have repealed.

“The voucher approach, with its significant cost-sharing, garners much of its budget savings because about one-third of the (125,000) people (who qualify for the program) cannot afford it and will simply go without coverage,” Dayton wrote.

The legislation would have modified eligibility for GAMC by removing several categories of eligibility that would have eliminated an aspect of the program that provides $203 a month for 20,000 Minnesotans who cannot support themselves due to illness, age or disability. Dayton said the provision “would severely strain the basic safety net our already over-extended counties are trying to maintain” and likely lead to homelessness for the many Minnesotans who use the program.

The governor pointed to several other provisions contained in the legislation that he opposes, including:

• reductions to the Medical Education Research Fund that supports reimbursement grants for hospitals and clinics that volunteer as training sites;

• reductions to home- and community-based long-term care services;

• reductions in the home visiting program; and

• reductions to family planning grants.

In addition to its fiscal implications, the bill contained several policy provisions that Dayton said he opposes, including:

• the repeal of the nursing home rate equalization;

• inclusion of residency requirements related to the Minnesota Family Investment Program;

• Minnesota’s entrance into a multi-state nursing licensure compact; and

• restrictions on the state’s ability to fully implement the federal Affordable Care Act.

The bill also would have reduced the administrative budget for the Department of Human Services by $13.9 million resulting in the loss of 123 full-time equivalent positions. The Department of Health would have received a $3 million reduction in its operational budget, resulting in a loss of 20 full-time equivalent positions.

Dayton was encouraged by the shared interest his administration and Republican leaders have in reforming managed care organizations and reducing fraud to improve the integrity of the health care system, provisions included in the bill.

“I also support initiatives that lead to more efficiency and coordination among state agencies in our licensing, regulation and data collection efforts,” he wrote.

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