By Trey Mewes and the Associated Press

As the Minnesota Legislature pounds out a budget for the next two years, local legislators and health advocates are speaking out against a House proposal to cut MinnesotaCare, a health care program for low-income residents, as part of $2 billion in tax relief.

“I do not think it’s a good idea and it’s one of the very few finance bills that has gotten zero DFL support in the House,” Rep. Jeanne Poppe, DFL-Austin, said.

House Republicans moved the bill through to committee last week, which has prompted DFLers and health professional groups to launch a publicity tour to keep MinnesotaCare rather than switch low-income residents to the MNsure health insurance exchange.

“It’s really kind of a centerpiece of health care for the state,” Liz Doyle, associate director for TakeActionMinnesota, said.

The bill’s passage sets up a wide gulf with the Democrat-controlled Senate, where top lawmakers say going afterMinnesotaCare, a program created in 1992 for residents who make too much money to qualify for Medical Assistance, when the state has a hefty budget surplus is unthinkable. It has sparked memories of 2005, when a GOP-led effort to tighten MinnesotaCare enrollment was a large factor in a government shutdown.

With changes that weed out ineligible enrollees from the state’s public programs and cutting administrative expenses at the Department of Human Services, the Republicans who control the House aim to make more than $1 billion in cuts to a sector of state government they say is spending too much money, too fast.

“The ship we’re on is heading for a waterfall,” said Rep. Matt Dean, chairman of the House committee that handles health care spending. “I think you know it, we know it, Gov. Dayton knows it.”

But the biggest savings, more than $500 million, come from axing MinnesotaCare. In its place, the GOP budget would offer a state-based tax credit to buy down private coverage as roughly 90,000 enrollees move to the health insurance marketplace starting next year.

“We all realize that there’s going to be change, and change is scary sometimes,” Dean said before the House took up his bill. “So if we’re trying to be serious about helping low-income Minnesotans be able to afford health insurance, that’s what we’re talking about.”

House Democrats said the bill would put the state’s budget in peril — it banks on saving $300 million by auditing the state’s public programs to remove ineligible enrollees, but a fiscal estimate from nonpartisan budget staff released Tuesday pegs the savings at just $16.5 million.

“Right now you have a $285 million hole in your budget,” Minority Leader Paul Thissen said, arguing the measure should be delayed and reworked.

Dean and other Republicans dismissed the administration’s fiscal note as “phony,” pointing to a legislative audit suggesting larger signs of fraud within public health and economic support networks.

“We need to be aggressive and we need to be able to get these savings,” Dean said.

Yet critics say defunding MinnesotaCare would ultimately punish low income residents by putting more of a burden on their budgets. Rose Roach, executive director of the Minnesota Nursing Association, believes the bill would likely affect a larger number of Greater Minnesota residents as a result.

“Either the premium, or individual pay would increase significantly, or their out of pocket costs will go up significantly,” Roach said. “Really, that’s why the state chose to put MinnesotaCare in place in the first place.”

Sen. Tony Lourey, Dean’s counterpart in the Senate, sounded a note of caution to House Republicans last week on how they could nail down an agreement while trying to do away with MinnesotaCare — a nonstarter with his caucus and Gov. Mark Dayton.

“We’ll have to have them get serious about their entire budget,” he said. “The manner in which they’re disrupting how Minnesotans get their health care is a very dangerous approach.”

A group of about 20 protesters gathered outside the House chambers to call on lawmaker to keep MinnesotaCare in place. Even with additional tax credits, enrollees would likely face much higher out-of-pocket costs, said Liz Doyle with TakeAction Minnesota, a coalition of unions and advocacy groups.

Dean criticized Democrats for drawing the line on maintaining MinnesotaCare.

“I think that’s short-sighted, because they’ve also admitted that they can’t pay for what we currently have,” the Dellwood Republican said. “We need some stability and predictability in Minnesota’s health care market. That’s the discussion that we’re starting today, and it’s one that’s long overdue.”

The state has until the end of next week to put together a budget, though legislators are growing increasingly wary of an impending legislative standoff and potential special session to work out the budget.

“It’s going to be tough to finish up in 12 days,” Poppe said. “I have a hard time imagining how we’re going to end in agreement.”