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State Representative Jeanne Poppe
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-4193
For more information contact: Sandy Connolly 651-296-8877
NEWS COLUMN
WHY A FUNDING INCREASE FEELS LIKE A CUT
As I visited with people throughout the district over the past months, I repeatedly sought their opinions on how we can best address the historic budget deficit our state is facing. The Governor’s budget proposal has given me the opportunity to talk in specific terms about his ideas for cutting costs and funding state priorities, weighing the pros and cons of what he has recommended. This past week, I was asked why the 9.6% funding increase for the Health and Human Services (HHS) budget he has proposed is not considered to be enough. To help answer that question, I thought it would be helpful to look more closely at why the rate of growth in the health care budget is so high.
To begin with, the HHS budget was originally slated to receive a 20 percent increase. State budget projections indicate HHS costs will grow at an average of 8 percent per year between fiscal year 2009 and 2013, which is more than double the rate of growth in overall General Fund spending. Contrary to popular belief, nursing homes are not the cause of this growth. Constituting 10 percent of HHS spending in FY 2009, the few remaining nursing homes in Minnesota have little enrollment growth and costs are projected to increase at a rate of just 2.1 percent per year.
By contrast, waivered-services, the alternative to nursing homes that includes assisted living and services for people with disabilities, are a major source of rapid budget growth – growing at almost 10 percent per year. Growth in the waivered services budget has a disproportionate effect on total spending since they constitute 20 percent of the HHS budget. The growth in waivers is due in part to our rapidly growing senior population and the fact that more seniors are going into assisted living (elder waiver) instead of nursing homes.
By far, however, the fastest growing budget area is the health care category. The Medical Assistance Families and Children budget makes up 18 percent of HHS spending and is increasing at an average rate of 12 percent per year. The MA elderly and disabled services budget constitutes 22 percent of HHS spending and is increasing at 11.2 percent per year, and the General Assistance Medical Care (GAMC) budget constitutes 6 percent of HHS spending and is increasing at 12.1 percent per year.
These budgets are growing at this rapid pace primarily because of two factors - demographic changes and a federal law requirement that all managed care contracts be paid at actuarially certified rates. These large, annual increases are linked to medical inflation by federal law. If the budget is cut, these mandated increases must remain the same – leaving direct services to Minnesotans as the only place to cut. As a result of the Governor’s proposal, health care coverage for 113,000 adults and 20,000 children would be eliminated, 350 disabled Minnesotans would lose services, nursing home funding will be cut by $55 million and another $85 million will be cut for long term care providers, just to name a few.
Finally, if we consider the spending in this budget not linked to long-term care and health care, the growth rate averages just 1.5 percent per year, less than half the rate of growth in total General Fund spending. Welfare spending, often blamed for budget woes, represents just 0.8 percent of HHS General Fund spending and is so miniscule it is statistically insignificant in the context of the overall growth in the budget. In fact, the federal government is rumored to be considering a multi-million dollar fine against Minnesota due to under - spending on welfare.
It is worth noting that there is one other area of the General Fund budget that is growing at the same 8 percent annualized rate as the health and human services budget – debt service – rising from $410 million in FY 2008 to $593 million in FY 2013. If the final budget we pass this year includes significant borrowing, the debt service will continue to grow.
I encourage you to join Senator Sparks and me at upcoming town hall meetings. They are scheduled for Friday Feb. 13, from 2 – 3 p.m. at the Grand Meadow Public School Media Center, and 3:30 to 4:30 p.m. at the Austin Public Library Large Meeting Room. On Saturday, Feb. 14th, we’ll be at the Brownsdale Community Center from 8 – 9 a.m., the LeRoy Community Center from 9:30 – 10:30 a.m., and the Kingsland Middle School in Wykoff from 11:15- noon.
Please contact me with your questions and feedback. I can be reached by phone at 1-888-682-3180 or 1-651-296-4193, by mail at 487 State Office Building, 100 Martin Luther King Blvd., St. Paul, MN 55155 or via e-mail at rep.jeanne.poppe@house.mn.
News Items
- POPPE SELECTED AS AGRICULTURE POLICY COMMITTEE CHAIR - (Posted: 2012-11-16 00:00:00)
- Rep. Jeanne Poppe Encourages High School Juniors to Apply for Minnesota House of Representatives Page Program - Application Deadline is November 19th - (Posted: 2012-11-12 00:00:00)
- HORMEL INSTITUTE EXPANSION SIGNED INTO LAW - 2012 legislative session adjourns sine die - (Posted: 2012-05-11 00:00:00)
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