Minn. House approves deep cuts in health spending

Published 11:44 am Thursday, April 7, 2011

ST. PAUL, Minn. (AP) — The Minnesota House approved deep cuts to health and welfare programs early Thursday after a protracted debate that began a day earlier.

The health budget bill would cut projected spending on health care and social services by $1.7 billion over the next two years, while bringing sweeping change to the state’s public health care programs. The package is the final piece in budget frameworks assembled by both legislative chambers as majority Republicans attempt to erase a $5 billion deficit without state tax increases.

The House approved the bill on a largely party-line vote of 70-62, with three Republican lawmakers voting against it and one Democrat voting for it. Its passage sets the stage for budget talks between top GOP lawmakers and Democratic Gov. Mark Dayton.

Email newsletter signup

The first-term governor wants to raise taxes for the state’s top earners. His top advisers have raised multiple objections to the GOP slate of spending plans, issuing a stream of letters highlighting areas of disagreement.

The health bill would unravel a Medicaid expansion Dayton ordered this year for 100,000 vulnerable adults, eliminate MinnesotaCare health coverage for 7,200 adults and give other MinnesotaCare enrollees subsidies to buy private insurance. It counts on saving $300 million by getting federal permission to tinker with Medicaid, known in the state as Medical Assistance. Services for disabled people would also be cut significantly from projected spending levels.

Rep. Jim Abeler, the bill’s sponsor, said an overhaul is needed to curb the fastest-growing area of state spending and preserve a safety net for the most vulnerable.

“If you care about the people we’re serving, then you better find a way to keep affording to serve them,” said Abeler, R-Anoka, on the sidelines of the debate late Wednesday.

Democrats argued that the bill banks savings that might never materialize.

Human Services Commissioner Lucinda Jesson said $750 million of the cuts are unsubstantiated by state fiscal analysts and the rollback of the Medicaid expansion would result in the loss of $1.3 billion in federal money over three years. Health Commissioner Ed Ehlinger predicted the bill would undo big pieces of a health care overhaul the state adopted in 2008, including stripping funding for prevention programs and efforts to save money by better coordinating patient care.

“Basically half of their cuts are not real,” said Rep. Tom Huntley, the ranking Democrat on the House Health and Human Services Finance Committee.

Lawmakers amended the bill Wednesday to block penalties for those who refuse to buy health insurance as required by the federal health care overhaul, after a philosophical exchange over the federal law and states’ rights. The GOP majority defeated a Democratic attempt to require the governor to consider calling a special session if savings from the federal Medicaid waiver weren’t realized, so lawmakers could address the resulting budget gap.

The health budget bill and spending plans for public schools, colleges, courts, prisons, job and farm programs and more are headed to legislative negotiating panels charged with reconciling differences between the chambers’ approaches. Some details of the House bill differ from a Senate version approved last week, but both seek to undo the Medicaid expansion and obtain a federal waiver to give the state more control over health care spending.

Earlier Wednesday, the House voted 72-61 along party lines for a bill that would slash state agency budgets by a third while reducing the state work force 15 percent by 2015. Republicans said the bill would slim state bureaucracy while Democrats bashed it for cutting state workers.

Lawmakers and Dayton have until May 23 to agree on a budget during the regular legislative session. The current budget cycle terminates at the end of June.