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Minnesota House of Representatives

State Representative Jim Davnie

445 State Office BuildingState Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-0173

For more information contact: Ted Modrich 651-296-5809

Posted: 2011-07-27 00:00:00
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HOUSE BRIEFS

Children’s Health Care

A number of concerns were raised throughout the legislative session on the impact of different proposals on health care for children. The additional revenue created by the final shutdown-ending budget agreement prevented the repeal of the new Early Medical Assistance (MA) program and ensured continued health care coverage for more than 140,000 Minnesotans. However the final bill still cuts $1 billion from the HHS budget. Hospitals and nursing homes are hit particularly hard in the final budget agreement, with cuts to hospitals amounting to nearly half a billion dollars.

For the good of our state now and in the future it is critical that all children have access to quality, affordable health care. In 2009, approximately 9.0 percent of Minnesotans, or 478,000 people, did not have insurance. Of this figure, approximately 83,000 were children 17 years of age or younger. Providing coverage to our children undoubtedly increases their access to quality care from professionals. Adequate access to primary care helps reduce preventable hospitalizations and allows children to maintain their regular daily activities. For those children who do not have good health, or for those who have a disability, any unmet health care needs can lead to potentially life threatening problems.

Several of the largest components of the Special Session HHS budget bill, such as the Early MA program and the creation of the defined contribution program in MNCare, only pertain to childless adults. Therefore, these provisions do not have any impact, either positively or negatively, on the children’s health care. In addition, there were no major changes to the income and asset standards for Minnesota’s public health care programs, so there is unlikely to be a major decrease in the number of families benefitting from these important services.

The bill does contain, however, major cuts to hospital funding that will impact facilities around the state. The most significant funding reduction is due to a repeal of hospital inpatient rebasing, which result in a loss of nearly $500 million in hospital funding. By repealing rebasing, this budget bill ensures that state payments will not keep up with state medical inflation rates that average about seven percent annually.

In addition, funding for managed care programs is slashed by more than $420 million and, while some of these reforms were necessary to achieve accountability standards for state contract, these massive cuts are likely to be passed along to private-pay consumers – possibly resulting in higher insurance premiums for middle-class Minnesotans and an increase in the uninsured rate. In Hennepin County in particular these cuts could also yield higher property taxes from the County to provide for the functioning of Hennepin County Medical Center.

Hospitals may also be hurt by the five percent payment reduction for outpatient and ambulatory surgery services, and a two to three percent cut for many other physician and non-actuate care services. The new law also includes a ten percent fee-for-service rate reduction for inpatient services, but children’s hospitals are amongst the facilities excluded from this cut.

I voted against the HHS budget bill, but it was signed into law on July 20th. I strongly believe that we can and must do better. For my part, I will continue to be a strong advocate for our communities’ core principles of economic fairness and protection of the more vulnerable members of our society.

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