Health and Human Services

Health and Human Services Budget

The health and human services budget provides funding for the Department of Human Services, Department of Health, and many health-related boards. The bill uses payment and policy delays to push nearly $200 million five years down the line, funds ongoing programs with one-time money, and uses budget tactics that would typically be used during a time of budget deficit. The first HHS budget bill was vetoed because of significant cuts. Though this bill is more fiscally sound, it relies heavily on the Health Care Access Fund, which puts MinnesotaCare and other state health programs at risk. (SF 2)

The bill includes:

Child Care Assistance

The bill includes savings of $14.1 million from the child care assistance program (CCAP) integrity modifications – a recommendation from the Governor – and increases funding for the program by $18.6 million. This program helps families access high-quality child care.

St. Peter Security Hospital Staffing

The bill increases funding for the Minnesota Security Hospital by $22.9 million to help ensure the safety of treatment staff and maintain the state’s ability to assure quality, clinically sound care to some of Minnesota’s most vulnerable individuals.

For-Profit HMOs

Republicans decided to allow for-profit insurance companies to join Minnesota’s health insurance marketplace, allowing nonprofit HMOs to keep taxpayer dollars if they decide to convert to for-profit HMOs. This bill places a moratorium on HMO nonprofit conversion until July 1, 2019.

MNCHOICES

The bill shifts 20% of MNCHOICES Administration costs to counties. MNCHOICES is a program for assessment and support planning for long-term care services. This cut will significantly affect county budgets and could raise Minnesotans’ property taxes.


Reinsurance

A bill that spends nearly $543 million over two years on a proposal intended to stabilize Minnesota’s individual health insurance market has become law in Minnesota. The goal of the new reinsurance law is to remove high-cost, high-risk enrollees from the individual market to keep rates low for the remaining individual market enrollees. The law gave $543 million to insurance companies to help pay for these high-cost claims, but without any assurance from those companies to make rates more affordable or expand provider networks across the state.

Under the new law for the 2018 insurance year, when an enrollee reaches $50,000 in insurance claims, 80% of claims would be paid by the state’s reinsurance program until those claims hit $250,000. After 2018, the program board will set the payment parameters with an attachment point of at least $50,000, a coinsurance rate between 50% and 80%, and a reinsurance cap of $250,000 or less.

Minnesotans need health insurance reforms that will offer the state long-term stability. This is another Republican “fix” that costs $543 million and only provides temporary relief for two years. While the goal of the legislation is well-intentioned, this proposal takes more than $400 million in funding from the Health Care Access Fund (HCAF), a fund intended to be spent on health care for low income Minnesotans, to help insurance companies. (HF 5)


Health insurance premium assistance

Early this session, a bill was signed into law to provide immediate relief to Minnesotans who are struggling with increased health insurance premiums. The bill reduces 2017 health insurance premiums by 25% for Minnesotans, regardless of their income, who purchase their insurance on the individual market and do not receive federal tax credits. The new law is reducing the average premium increase facing Minnesotans in the individual market from 55% to 16%, and some families are saving as much as $594 per month on their premiums.

Under the law, the 25% subsidy is retroactive to January 2017. $312 million was appropriated for the premium relief from the budget reserve account and $157,000 was appropriated to the Office of the Legislative Auditor for the purposes of auditing the premium assistance program.

Additionally, the new law includes several health insurance market reforms. One reform measure that is the most troubling to many DFL senators is a provision to allow for-profit HMOs to operate in Minnesota. This drastic change could have significant impacts for rural and smaller hospitals and medical providers. For-profit HMOs exist to make a profit for their shareholders, while looking out for the best interests of their members comes second. (SF 1)


Health and Human Services Bills that Did Not Become Law

VETOED: Health and Human Services Budget

In April, the Senate approved a health care budget bill that cut millions from the Department of Human Services (DHS) and Department of Health (MDH) as well as many health-related boards, predicated entirely on cost shifts and gimmicks. Through payment and policy delays, the bill pushed more than $454 million of HHS spending into the FY 2022-23 biennium, funding ongoing programs with one-time money and using budget tactics typically used as a last resort when the state has a deficit – not a $1.5 billion surplus. (SF 800)

Egregious items included in that bill were:

Payment shifts

The Medical Assistance (MA) capitation payment shifts used to fund this bill could have a destabilizing effect on the state’s health insurance market at a time when Minnesota needs to enact reforms to stabilize the market and ensure Minnesotans have access to affordable health plans and adequate networks of doctors.

Hospital and Provider Cuts

The MA reimbursement cut to Minnesota hospitals and providers and the delay of inpatient hospital rate rebasing will adversely affect rural hospitals and create a disincentive for more providers across the state to offer care for MA program enrollees.

St. Peter Security Hospital Staffing

The cuts to DHS direct care and treatment, including the St. Peter Security Hospital, put the safety of treatment staff at risk and reduce the state’s ability to assure quality, clinically sound care to some of Minnesota’s most vulnerable individuals.

Guaranteed Renewability

The bill eliminated the guaranteed renewability requirement for health plans in Minnesota. Guaranteed renewability has been on the books in Minnesota for 25 years and removing it will leave consumers vulnerable to plans being yanked out from underneath them when it’s time to renew their health insurance policy.

Child Protection, Foster Care or Permanency Programs

These programs were left unfunded in the Republican bill.

Without public input or financial documents to back up improbable savings, Republicans sent a $505 million health care budget cut to Gov. Dayton in early May that was a combination of the original House and Senate proposals. Other dramatic cuts included in that bill, which was vetoed immediately, included:

Eliminating MNsure and MinnesotaCare

The bill would have eliminated MNsure and transitioned the state to a federal exchange, a move that would cost Minnesota taxpayers millions of dollars, eliminate MinnesotaCare, and relinquish all control to the federal government. This was despite some Republicans admitting a federal exchange is not the right choice for Minnesota.

For-Profit HMOs

HMOs are currently sitting on reserves of taxpayer dollars, funds they are tasked with carefully managing under the state law that prohibits for-profit insurance companies from selling insurance in Minnesota. But Republicans decided to allow for-profit insurance companies to join Minnesota’s health insurance marketplace. This change allows nonprofit HMOs to keep taxpayer dollars if they decide to convert to for-profit HMOs. That money should be returned to taxpayers, not quietly transferred to a for-profit insurance company. There was a bipartisan solution worked out that would have created a process for nonprofits to become for-profits, and protect our taxpayer dollars, but that provision was replaced by language that benefits insurance company CEOs and shareholders.

MNCHOICES

The bill cut the MNCHOICES Administration by $61.5 million – a program for assessment and support planning for long-term care services. This cut would take the state out of compliance with home- and community-based services waivers and requirements under the Minnesota Olmstead Plan.

Child Care Assistance

The bill took savings of $14.1 million from the child care assistance program (CCAP) integrity modifications – a recommendation from the Governor – but didn’t include any of the increases in funding for CCAP or attribute the savings back to CCAP, which would result in a longer wait list for the program and less access to high-quality child care.

Family Planning Grants

The Republican elimination of family planning special projects grants would result in reduced access to women’s health care in Minnesota, specifically for low-income Minnesotans in rural areas. These grants have provided access to health care for Minnesotans across the state for nearly 40 years.

VETOED: Abortion-Related Legislation

Two bills aimed at limiting access to abortions in Minnesota moved through the legislative process in the final days of session, despite Governor Dayton’s promise to again veto the legislation. Both bills have previously been determined as unconstitutional and Governor Dayton has vetoed similar legislation in the past.

The first bill would prohibit state funding for abortions except in cases to save the life of a woman or in cases of rape or incest. State law in Minnesota already prohibits the use of state funding for abortions except in cases of rape or incest, for health or therapeutic reasons, and when a woman’s life is in danger. Similar legislation has been ruled unconstitutional in other states and have cost them millions of dollars in legal fees. Last year, Wisconsin paid $1.6 million in challengers’ legal fees when a district court ruled the law was an undue burden on women seeking abortion. (SF 702)

The second bill would subject abortion clinics to the licensure standards of the Outpatient Surgical Center Act, which essentially classifies the clinics as small hospitals and is designed to shut down abortion providers in Minnesota. The evidence of unsafe practices within these clinics to warrant this type of heightened licensure is not present in the clinics that operate in Minnesota. (SF 704)

MinnesotaCare Buy-In

A proposal included in the Governor’s budget would allow individuals and families buying insurance on the individual market of any income to buy in to the state’s MinnesotaCare program, offering them quality health care at a price they can afford.

Just like health insurance policies offered by commercial health plans, Minnesotans who want to take advantage of this program would purchase their policy and their premiums would pay for the cost of their insurance coverage. Other than a one-time startup cost of $12.9 million, the plan would require no extra ongoing costs for Minnesota taxpayers. MinnesotaCare has just 3% overhead, making it an efficient, competitive, and accountable alternative to commercial health plans.

Due to the rising premium increases and the limited number of participating health plans on the individual market, Minnesotans need more affordable and accessible health insurance options. This plan would increase choices, encourage competition in the marketplace, and ensure that all Minnesotans have access to affordable insurance with a comprehensive network of health care providers. Unfortunately, this proposal was not included in the HHS budget bill or the reinsurance bill, despite numerous attempts to include it as an amendment. (SF 781, Article 4, Section 63)

Senate DFL Media