Saint Paul, Minnesota – State Representative Tom Huntley (DFL – Duluth), chair of the House Health and Human Services finance committee, unveiled the HHS omnibus finance bill today, which reduces the HHS budget by $150 million over two years through targeted cuts, reforms, and re-prioritization within the HHS budget. The bill protects the most vulnerable Minnesotans, funds cost-preventive mental health initiatives, and includes a funding increase for workers in nursing homes and long-term care providers. In addition, the bill continues implementation of federal health reform, including a modernizing of MinnesotaCare through the Basic Health Plan, a major opportunity to assert more state-based control over federal health care dollars.
“Cutting $150 million from this budget was not a desirable or easy task, but we have achieved our goal of making significant reductions in the HHS budget while protecting the most vulnerable Minnesotans,” said Huntley.
The House HHS bill achieves cost savings in several ways, including an estimated $66 million through managed care payment reforms. The bill also saves about $93 million through targeted reductions to existing programs and reforms of services in areas like dental and prescription drugs. The bill recognizes savings from budget decisions elsewhere, such as the fact that funding all-day Kindergarten reduces the number of children on welfare requiring child care.
Within a budget that overall makes net reductions, the House bill sets the right priorities by providing a 2% cost-of-living increase for long-term care providers. Nursing home and long-term care workers have not seen a raise in over four years.
“Despite the reductions we are making in our budget we found a way to increase funding for our nursing homes and caregivers,” said Huntley. “This is a real victory for our nursing homes and the workers who care for our loved ones.”
The bill also funds cost-preventive mental health initiatives for adults and children such as fully-funding the Governor’s request for expanding school-based mental health services and mental health crisis response services.
The House bill includes funding to further implement significant portions of the federal health reform law, such as removing bureaucratic and wasteful barriers to coverage for medical assistance, for children and adults. In addition, the bill protects and improves MinnesotaCare for middle class families as part of the ongoing process to implement federal health care reform. Hospitals and health care providers are expected to see a decrease in uncompensated care due to MA expansion and see a substantial influx of dollars over the next four years.
Recognizing that Minnesota hospitals are expected to see a nearly $1 billion increase in funding over the next four years, the bill includes about $100 million in hospital surcharges. The surcharge allows for a strategic modification of hospital funding in Minnesota, including new incentive payments for every hospital that makes it a priority to serve more “safety net” clients.
Even after the surcharge is implemented, Minnesota hospitals statewide are expected to see a four-year, $800 million increase in state and federal funds due to the implementation of federal health care reform.
“Our bill takes into account the interaction of federal health care reform with hospital reimbursement,” said Huntley. “Given the influx of federal dollars, we felt this surcharge was one of the least harmful ways to reduce overall spending in the HHS budget while protecting our most vulnerable Minnesotans.”
The House HHS bill can be viewed online here: http://www.house.leg.state.mn.us/comm/docs/DEA13-0408_1.pdf