Health & Human Services

HHS omnibus budget bill

The Senate approved a bill to provide funding in FY 2018-19 for the Department of Human Services (DHS) and Department of Health (MDH) as well as many health-related boards, but the Republican-led bill is predicated entirely on shifts and gimmicks. Through payment and policy delays the bill pushes over $454 million of HHS spending into the FY 2022-23 biennium, funding ongoing programs with one-time money and using budget tactics for a time when the state has a deficit not a $1.65 billion surplus.

With a general fund cut of $335 million in FY 2018-19, the bill cuts funding for child care assistance, reimbursement rates for hospitals and doctors, funding for the St. Peter Security Hospital, funding for assessment and support planning for long-term care services, and includes a 8.5% reduction for the Department of Human Services central office and a 7% base reduction for the Department of Health. The bill doesn’t include funding for child protection, foster care or permanency programs, funding for the St. Peter Security Hospital Staffing, and many of the proposals in the bill will take the state out of compliance with federal requirements.

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 creates a disincentive for more providers across the state to offer care for MA program enrollees.

Direct Care and Treatment cuts: 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.

MNCHOICES cut: The bill cuts the MNCHOICES Administration by $61.5 million – a program for assessment and support planning for long-term care services. This cut will 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 takes savings of $14.1 million from the child care assistance program (CCAP) integrity modifications – a recommendation from the Governor – but doesn’t include any of the increases in funding for CCAP or attribute the savings back to CCAP which will result in a longer wait list for the program and less access to high quality child care.

Guaranteed renewability eliminated: The bill eliminates 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.

Elimination of family planning grants: The Republican elimination of family planning special projects grants will result in reduced access to women’s health 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. (SF 800)

Reinsurance bill becomes law

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. 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” which costs $543 million and only provides temporary relief for two years. While the goal of the legislation is well-intentioned, this proposal takes over $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. Under the bill, insurance companies get paid for high cost claims, but there is no assurance from insurance companies that they will make their rates more affordable or expand their provider networks across the state. (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)

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)

Abortion-related legislation

Two bills aimed at limiting access to abortions in Minnesota are moving through the legislative process. Both bills have previously been determined as unconstitutional and Governor Dayton has vetoed similar legislation in the past and has indicted he will veto the legislation again if it reaches his desk.

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 them 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)

Senate DFL Media