HHS BUDGET OVERVIEW
The Senate Majority’s Health and Human Services Budget makes deep and unnecessary cuts to health care, child care, and disability services despite a substantial state surplus. The entire HHS budget is based on allowing the provider tax to sunset Dec. 31, 2019, which would leave a gap in the Health Care Access Fund of more than $900 million by FY2023. The budget transfers hundreds of millions of dollars out the general fund and cuts critical programs in order to do so.
The Governor, the DFL House, and dozens of health care and patient advocacy organizations support repealing the sunset of the provider tax to keep this dedicated source of funding in place. Senate Republicans are convinced that the provider tax is no longer needed; however, their budget proves that without the provider tax, low-income Minnesotans will be left behind, and less money will be available for other urgent budget priorities.
The HHS budget is made up of two separate bills sharing one target. At this time, the committee chairs have been unclear about whether the bills will stay separate or come together as one piece of legislation.
Items included in omnibus bill:
The Senate Human Services Reform Committee spent considerable time discussing alleged fraud in public programs this session. In March, the Office of the Legislative Auditor (OLA) released a report responding to specific accusations in the Child Care Assistance Program (CCAP). While the report maintained that child care fraud is a significant issue that the Legislature should explore, it found no evidence to support exaggerated claims of child care assistance dollars being used to fund terrorism.
Governor Walz’s budget includes important and necessary changes to the CCAP program based on the OLA’s recommendations. It is a thoughtful and strategic approach to help the state better track where these dollars are going. In contrast, the Senate Republican budget takes the extreme position of effectively eliminating the program all together and requiring a complete redesign from scratch. Eliminating CCAP robs children of needed early-educational opportunities and prevents parents from contributing to the workforce.
The HHS budget does include a series of proposals Senate Republicans assert will improve program integrity, but they do not include all of the Governor’s recommendations and continue to push for controversial ideas far beyond child care. Opponents have argued that Republican proposals will increase administrative burden without corresponding benefit and may result in eligible people losing access to critical programs like health care and food support.
Health care cuts
The Senate HHS budget makes devastating cuts to health care for Minnesotans with disabilities and low-income individuals and families as a way to justify ending the provider tax at the end of this year. The tax creates a stable source of health care revenue, but it will sunset at the end of 2019 without legislative action. Instead of continuing the provider tax as Governor Walz is proposing, the Senate’s budget makes the conscious choice to reject available revenue and make unnecessary cuts to programs thousands of Minnesotans rely on.
Senate Republicans have proposed capping enrollment in some medical assistance waiver services and reducing the number of people who are eligible for personal care assistance (PCA) services, both of which help people with disabilities to thrive and be engaged in their communities. They have also proposed severely reducing the health care benefits of some Minnesotans who are enrolled in medical assistance and MinnesotaCare. Benefits like dental, vision, transportation to medical appointments, and PCA services will no longer be covered. Without access to these services, the cost of health care will only rise as more people are forced to use emergency rooms for care.
The Senate HHS budget includes restrictive, controversial anti-choice policy that will lead to certain veto. One item would ban abortion after 20 weeks of pregnancy in the state of Minnesota. The bill would not only infringe on Minnesotans’ basic right to health and safety but would also criminalize doctors for acting in the best interest of their patients.
If the legislation becomes law, a physician who performs an abortion after 20 weeks in Minnesota could be prosecuted for a felony offense and become subject to civil claims. This legislation uses intimidation and fear to prevent physicians from delivering care that is in the best interest of their patients. It is not reflective Minnesota’s standard of high-quality, comprehensive care.
The budget also includes legislation that was vetoed last year requiring doctors to ask patients whether they would like to view an ultrasound if one is performed prior to an abortion. It is predicated on the false notion that some doctors do not allow their patients the opportunity to view an ultrasound and suggests that women have not already carefully considered their decision.
Medically appropriate care is best determined between medical experts and patients, not politicians. Every pregnancy is different, and adequate medical options should be available for doctors and all Minnesota families so that they may determine what is best for them. (SF 1609)
Despite cuts to some disability services, the budget does make needed investments in other programs. This includes eliminating the spenddown for individuals with income over the limit to qualify for medical assistance, increasing rates for PCA services for people with complex medical needs, increasing rates for providers under the Disability Waiver Rate System (DWRS), and eliminating Tax Equity and Fiscal Responsibility Act (TEFRA) parental fees for children accessing medical assistance who would otherwise not qualify.
While the inclusion of these proposals will make a big difference for some Minnesotans with disabilities, the funding comes at the expense of access to services for others in need. At a time when the state has a surplus and existing revenue like the provider tax that could easily be extended, it is wrong for Senate Republicans to be picking winners and losers this way.
Other noncontroversial provisions
The Senate HHS budget includes several proposals that received bipartisan support in committee, such as funding to continue tobacco cessation services when ClearWay MN dissolves, grants for fetal alcohol spectrum disorder, reducing barriers for people in recovery to help others with substance abuse disorder, and grants that help people with disabilities to access adaptive fitness programs.
Items that have passed Senate Floor:
The Senate passed bipartisan legislation in April to combat the opioid epidemic in a decisive 59-6 vote. The legislation raises annual registration fees on pharmaceutical manufacturers and wholesale distributors, charging up to $250,000 to manufacturers responsible for selling the highest quantities of opiates in Minnesota. The goal of this effort is to raise $20 million each year to fund treatment and prevention programs, amounting to only a sliver of the skyrocketing profits made by manufacturers of opiates each year. Advocates argue that drug manufacturers need to pay their fair share for the harm their products have caused and alleviate some of the financial burden borne almost entirely by taxpayers to address this crisis.
The bill also authorizes funding to update the prescription drug monitoring program (PDMP) to make it easier for doctors to use, requires prescribers to check the PDMP before prescribing controlled substances like opiates, and limits the quantity of opiates prescribed for acute pain, such as pain after an injury or surgery, to a seven-day supply for adults and a five-day supply for children. Doctors can still write prescriptions for more than the limit if they believe it is necessary, and prescriptions are not limited for patients experiencing chronic pain.
Unfortunately, the legislation includes a provision opposed by DFLers to sunset the highest fees in the bill if Minnesota receives more than $20 million from any of the active litigation against drug manufacturers. As a result, programs and services funded under the bill may not be able to depend on receiving the money and the Legislature would have to act to reinstate the fees. Considering how hard the Legislature has fought to pass this bill over the last few years, a sunset would be devastating.
The House bill does not contain this language and includes other, less controversial policy differences that now must be worked out in a conference committee. As of Apr. 11, 2019, the conference committee has only met once, coming to little agreement on a path forward despite Senate Republican leaders expressing a desire to pass this bill before the legislative break. (HF 400)
Bipartisan legislation to license key players in the pharmaceutical industry, called pharmacy benefit managers (PBMs), unanimously passed the Senate Floor on a 67-0 vote in April. Licensure makes a strong statement that Minnesotans deserve more transparency at a time when the pharmaceutical industry keeps pointing their fingers at each other over high costs while prescription drugs prices for consumers only rise higher and higher. The legislation would authorize the Minnesota Department of Commerce to license and regulate PBMs operating in Minnesota and requires the companies to share certain information about how they conduct business.
Critics of PBMs point to the use of rebates as a reason why the pharmaceutical industry may have a disincentive to keep prices low. PBMs negotiate rebates from the manufacturers in return for agreeing to add or restrict medications on insurance company formularies. Manufacturers can keep raising prices and steering customers to certain medications while PBMs benefit because they keep a portion of the rebates they secure. Licensing PBMs will shine a light on an extremely complex system that lawmakers see as a crucial first step toward reigning in high drug prices for Minnesotans. More information will help everyone, from lawmakers to patients, make better decisions that make health care more affordable and put patients first.
The House has included their companion bill in the health and human services omnibus bill, so the legislation will be considered in a conference committee. (SF 278)
Minnesota passed a program in 2017 to lower the cost of health care premiums for plans offered on the individual health insurance market. The bill allocated $542 million to insurance companies to help mitigate the risk of high-cost claims. It was a two-year program set to expire this year.
The Senate passed a bill off the floor before break that would allow the program to continue through 2022, using already allocated funds that remain unspent since the 2017 authorization.
The program was part of many factors that did lower the average cost of premiums on the individual market in 2018 and 2019; however, it also came with problems. The federal government reduced the amount of money sent to Minnesota for other health care programs by more than $200 million after approving the reinsurance program, and it unexpectedly cut another $100 million in funding in December 2018. Further cuts to federal funding for the program can be expected.
Beyond federal funding issues, many Senate DFLers are concerned that this plan sends more than a half-billion dollars in state money to insurance companies but did nothing for direct consumer premium relief or to achieve long-term, sustained rate reductions.
A number of DFL amendments were offered on the floor, all of which aimed to improve the bill and protect consumers. All but one, which added a reporting requirement, failed to make it into the bill.
The bill passed off the Senate floor 37-28. It was heard in the House Commerce Committee and sent to the House Health and Human Services Committee, where it has yet to receive a formal hearing.
Governor Walz has offered a number of alternatives to lower the cost of health care on the individual market, including a direct subsidy and tax credits for consumers on the individual market, as well as the OneCare Minnesota health care plan. None of these alternatives have been given a hearing in the Senate.
It remains to be seen what will happen with reinsurance and the health care conversation in general, but it will certainly be part of the discussion as the legislature moves closer to the end of session. (SF 761)
This information is also included in the Commerce Section.
Other Key Issues:
Last year, Republican legislative leaders failed to pass critical reforms to better protect seniors and vulnerable residents in long-term care facilities across the state. This year, Senate Republicans began the session with a promise to pass these reforms early. With just six weeks left in the legislative session, the bill has stalled in committee.
The legislation was heard in the Family Care and Aging Committee in March that is partly based on the work of various stakeholders who have been trying to find agreement on reforms that will keep seniors safe. The MN Department of Health convened several informal working groups after last year’s veto to make progress on new legislation for this session.
There are still areas of substantial disagreement over how best to protect seniors in assisted living facilities, which is why the bill seems to be stalled. However, there does appear to be consensus that Minnesota must join all 49 other states and finally license assisted living facilities. The legislation includes provisions that will require facilities to be licensed, clarifies and strengthens the rights of individuals living in assisted living settings, and adds new requirements and protections for electronic monitoring (also known as granny cams).
Minnesota seniors cannot wait any longer for these protections. Senate DFLers will once again be working hard this year to ensure that high-quality care and consumer rights are always at the forefront of the conversation. Any legislation must create real and systemic change to keep seniors safe and allow them to enforce their rights in a meaningful way. (SF 8)
The provider tax is a 2% gross revenue tax at the provider level for medical services and hospital stays, aimed at increasing accessibility to quality health care for low-income Minnesotans. The provider tax primarily funds medical assistance, which covers nearly 15% of all Minnesotans, almost a quarter of all children, and half of all Minnesotans with disabilities and those residing in nursing homes.
A broad coalition of groups, the House DFL, and the Governor are all advocating to repeal the December 2019 sunset of the provider tax to protect vulnerable populations as well as the state’s budget. The provider tax is the largest source of funding for the Health Care Access Fund (HCAF) — if funding for it ends, many Minnesotans will be at risk of losing their medical assistance benefits, endangering their long-term health care needs. Senate Republicans realize this – their budget uses $521 million of the state’s $1 billion surplus to make up for the lack of provider tax funds in this account.
The tax will generate over $680 million in revenue in 2019, and that money remains the best available option for continuing to fund both MinnesotaCare and medical assistance program costs. There are no strong alternatives to replacing the revenue from the provider tax, and Minnesota has no better option than repealing the sunset to ensure that low-income Minnesotans continue to have access to quality health care.
Cost of insulin
In the spirit of making prescription drugs more affordable, the Alec Smith Emergency Insulin Act was offered by DFLers as an amendment to the Pharmacy Benefit Manager licensing bill after Senate Republicans made it clear they were not going to give the proposal a hearing this year. The bill establishes an emergency insulin program to get insulin into the hands of Minnesotans who need it but cannot afford it. It is named after Alec Smith, a young Minnesotan who died in 2017 due to insulin rationing.
Access to insulin is a matter of life and death for many Minnesotans, but despite the urgent need for this program, the amendment failed with all Republicans voting that the amendment was not germane to the bill. None of the other proposals in the DFL package addressing insulin cost and access have been considered this session.
Child care providers
An omnibus bill of regulatory changes for family child care providers was quickly pushed through the committee process in March and is awaiting action in the Finance Committee. Concerns were raised by members on both sides in the Family Care and Aging Committee while hearing the underlying bills in the package, which includes changes to things like safety training and licensing violations. Some Senate Republicans have provided assurances that these concerns would be addressed moving forward; however, no changes have materialized.
The legislation seeks to clarify the laws family child care providers must follow in an effort to encourage child care providers to stay in business and make it easier for prospective providers to open new businesses. Lawmakers are grappling with the best way to help providers, who believe current regulations are too complex and burdensome, while still ensuring safety remains a number one priority. Senate DFLers are looking to make improvements to the bill as it continues to move forward to prevent any unintended consequences.
Many communities are facing a significant shortage of available child care. As this conversation continues, it is critical that the solutions considered include a comprehensive approach to making needed investments in facilities and training new providers, in addition to any regulatory changes. (SF 2)
The Senate HHS Committee considered a bill to address certain barriers to the state’s medical cannabis program. Since registry began in 2015, over 7,000 Minnesotans have dropped their enrollment in the program due to high prices and other restrictions.
The bill authorizes use of industrial hemp in the medical cannabis program, doubles the number of authorized distribution centers in the state (from four to eight), permits health care practitioners to re-certify patients for medical cannabis remotely via telemedicine, and authorizes the possession of medical cannabis in schools. This school restriction under current law has served as a barrier for families and student patients who must be taken out of class and off school grounds during the day to take their medicine. Though the legislation does address some of the barriers to care, it is still criticized by some medical cannabis supporters for not doing enough to increase affordability. The bill has stalled in the E-12 Committee. (SF 1070)
Portions of the bill have been included in the HHS budget bill; however, access to medical cannabis on school grounds was not included. (SF2452)
Tobacco cessation and tobacco 21
QUITPLAN Services is a nonprofit organization that provides free tobacco cessation services to all Minnesotans. It was funded through a portion of the Minnesota tobacco settlement revenue that tobacco companies were ordered to send the state in 1998.
QUITPLAN was created with a strict timeline and funding is scheduled to cease in March 2020, which would make Minnesota the only state in the nation to not offer a free cessation service. A bipartisan bill heard in the Health and Human Services Reform Committee and included in the HHS budget bill would fund a new smoking-cessation program through the Minnesota Department of Health to continue the important work of addressing tobacco addiction among Minnesotans. (SF 461)
Bipartisan legislation to raise the age to purchase tobacco products was heard in the Senate Health and Human Services Committee in February. The legislation would make 21 the legal age to purchase tobacco products in every corner of the state. It has the support of dozens of health care and patient advocacy organizations, and 23 cities and counties have passed similar ordinances in Minnesota. Numerous studies and surveys lay out a strong case for raising the age to purchase tobacco statewide, but the bill has been left sitting in the Judiciary Committee. (SF 463)
An omnibus bill of mental health provisions is still moving through the committee process. The bill includes every mental health-related proposal from across the Senate’s budget jurisdictions, like agriculture, health and human services, and education.
Among the many grants and programs included in the bill, there is funding for a new mental health crisis hotline to fill the void after the state-based hotline shut down last year, grants for mental health services at Minnesota state colleges, school-linked mental health grants, shelter-linked mental health grants to provide services to youth experiencing homelessness or sexual exploitation, a community competency restoration task force, and funding for mental health counseling to support farm families and business operators.
All of the appropriations in the bill remain blank, but Senate DFLers are hopeful that the bill will ultimately contain adequate funding to make real progress in building out the state’s mental health system. (SF1)