Minn. GOP lawmakers agree on plan to slash services for the poor

Thousands of Minnesotans would be left without health insurance under the Republican proposal for the state's Health and Human Services budget, DFL lawmakers and state officials said Friday.

The measure would repeal the state's early enrollment into the expanded Medicaid program, removing coverage for an estimated 150,000 adults without children who earn less than 125 percent of the federal poverty guideline, which is about $13,600 a year for a single adult.

The proposal was part of the agreement reached in the Republican-controlled Health and Human Services conference committee on Thursday. The agreement also includes cuts to welfare programs, services for people with disabilities, and other programs.

DFL lawmakers and DHS Commissioner Lucinda Jesson criticized the plan and said it would harm the state's most vulnerable residents.

The committee has not yet released a text version of the bill, but did release a spreadsheet that shows the funding cuts to specific programs. The proposal still needs to pass the full Legislature and be signed by Gov. Mark Dayton before it becomes law.

The proposal to transfer low-income Minnesotans out of the federal Medicaid program comes just four months after Gov. Dayton authorized nearly 100,000 Minnesotans into the more generous program. Republicans argue the program is too expensive and restrictive.

Instead, the state would revive a program that provides payments directly to hospital-based coordinated care delivery systems. The hospitals that choose to participate receive payments based on the number of low-income patients that enroll in their coordinated care delivery system, instead of being reimbursed for each individual service provided.

Rep. Jim Abeler, R-Anoka, hailed the program as a way to provide innovative care while reducing costs.

"It saves some money, but more importantly, the health outcomes are phenomenal," Abeler, who chairs the House Health and Human Services Finance Committee, said Friday. "And in some of these challenged populations where they're challenged by income and mobility and mental health issues, a lot of these folks that were in those systems actually have been stabilized and actually become employable, and they get a whole better life, and it's really quite exciting."

DFL lawmakers disagree, and said last year's experiment with the coordinated care delivery systems was a failure and left thousands without medical care.

"I actually think it's worse to do this, because we're suggesting people have coverage when they don't," Rep. Erin Murphy, DFL-St. Paul, said Friday.

The elimination of Medical Assistance for adults without children would save $921 million in the next biennium, according to the HHS conference committee spreadsheet. The bill provides $331 million for coordinated care delivery systems.

In the last legislative session, Gov. Tim Pawlenty removed funding for the General Assistance Medical Care program, a system that provided traditional insurance that allowed low-income childless adults to see a variety of providers at different hospitals and clinics.

The Republican governor's opposition forced lawmakers into negotiations to find another way to provide health insurance for the state's poorest residents.

Murphy, who led the fight to save General Assistance Medical Care in the previous legislative session, estimates that the new coordinated care delivery systems would receive about $930 per patient.

"So essentially it's no coverage at all," she said. "There's no reform there. To expect that a provider would care for somebody, even with a simple condition, for $930 a year is preposterous."

DHS Commissioner Lucinda Jesson also criticized the proposal Friday, calling the funding "woefully inadequate."

"I see a budget that has dramatic effects on a lot of vulnerable people," Jesson said. "I see dramatic reductions in health care coverage."

Another 50,000 adults would also lose their current insurance under the Republican proposal, lawmakers said. The plan would instead provide vouchers to adults with children who earn 133 percent or more of the federal poverty guideline, about $29,725 for a family of four, to help pay for insurance.

Jesson said the voucher plan would be too costly and confusing for many recipients.

"We think that a lot of low-income single adults who might qualify for a voucher are going to basically end up without health insurance," she said.

OTHER CUTS

The proposal would cut funding for programs that allow people with disabilities to receive care in their homes and in the community instead of in an institution. Jesson said the cuts would force about 1,200 people to move into nursing homes. About 5,800 people would not be able to access a waiver that pays for community and home-based care, she said.

The proposal would also eliminate the General Assistance program. The program provides up to $203 a month to 20,000 disabled adults without children. General Assistance is the only income, other than food support, for many homeless adults.

The committee also eliminated several programs that provide emergency assistance to disabled adults and replaced the programs with a less costly Adult Assistance program that would provide block grants to counties.

Jesson called that measure "one of the more troubling cuts made in this budget," and could result in many Minnesotans losing their only source of income.

"We're shifting the burden to the counties, but not giving them enough funds to deal with it," she said.

The proposal would also cut funding for grants that provide services for the elderly and people with mental illness, reduce monthly welfare payments for families with a disabled parent, and cut funding for the child welfare system.

THE POLITICAL BATTLE AT THE CAPITOL

The debate over appropriate funding for the Health and Human Services programs is at the center of a budget fight between Gov. Dayton and Republicans in control of the Legislature. Republicans are putting forward a budget plan that erases the state's $5 billion projected budget deficit through spending cuts. Dayton wants to raise income taxes on Minnesota's top earners to fix the problem.

The two sides have not started serious budget negotiations yet. Dayton refused to negotiate with the GOP until they presented him with a unified budget plan. Most of the specifics have been released and Republican Senate Majority Leader Amy Koch says she hopes budget talks can start soon.

But she said Republicans won't support a budget that relies on tax increases. She said businesses will look more favorably on Minnesota if taxes aren't raised.

"That will give them confidence, and the idea there is that they would be the people who would step up, invest and ultimately hire," said Koch.

Dayton and other Democrats argue that the Republican budget plan will increase local property taxes because of cuts to state aid to cities and counties.

Republicans say they're still optimistic that a budget agreement can be reached before the constitutional deadline for the Legislature to adjourn on May 23.

But Democrats in the House and Senate are less optimistic. DFL Senate Minority Leader Tom Bakk says Gov. Dayton won't agree to a budget plan that doesn't include new revenue.

"I think they are underestimating this governor if they think he is unwilling to go to a special session," said Bakk.

Advocates for the poor said they hope Dayton will veto any bill that includes deep cuts to programs for low-income residents. Brian Rusche, the executive director of the Joint Religious Legislative Coalition, said the Republican plan protects the wealthiest Minnesotans at the expense of the poor.

"It's morally unsupportable," he said. "It's a violation of our commitment to one another as human beings not to put people in desperate circumstances."

GOP legislative leaders say they intend to send Dayton a budget plan even if they fail to reach an agreement with him.

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