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MN2020 - Governor's Plan Could Leave Thousands Uninsured
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Governor's Plan Could Leave Thousands Uninsured

March 29, 2010 By Nina Slupphaug, Health Care Policy Associate
While the U.S. Congress was working to increase health care access across the country, Minnesota's governor was crafting a plan to cut health and human services by some $350 million in the FY 2010-2011 biennium. Additionally, Governor Pawlenty, according to his supplemental budget proposal, would like to make his unallotments permanent, increasing the cuts to more than $1 billion in FY 2012-2013.

The state is in dire economic straits and conservative leaders have a tunnel vision approach-we must cut our way out! A balanced approach that involves necessary cuts as well as smart revenue increases has been largely ignored. But gutting health care programs specifically in place to help Minnesotans survive tough times isn't a good solution either. It's hard on families and will likely lead to more expenses down the road.

The Health Care Access Fund is used to pay for MinnesotaCare, a program seeing increased applications as more working Minnesotans lose employer subsidized health insurance and fail to qualify for Medical Assistance. Governor Pawlenty would like to eliminate eligibility for childless adults for anyone with an income above 75 percent of federal poverty guideline, or $8,123 per year. It is estimated that an average of 21,500 more Minnesotans per month will find themselves without health care coverage as a result.

In addition, the Governor would like to eliminate access to certain kinds of health care, such as physical therapy for individuals on Medical Assistance and MinnesotaCare, thus making the road to being a successful part of the work force that much harder. The scheduled reduction in MinnesotaCare premiums will be canceled, undoubtedly making the program unaffordable to some and forcing families to drop health care coverage. These cuts to MinnesotaCare are estimated to create enough savings that $159 million can be transferred from the Health Care Access Fund to the general fund to help balance the budget. For FY2012-2013 the savings will be $572 million; however, a number of Minnesota families will be left without any affordable health care options.

It is worth noting that if the Health Care Access Fund  ever goes in the red, the Governor's unallotment authority extends to that fund, effectively giving the Governor unilateral control to cut MinnesotaCare eligibility, benefits and payment to providers.

Governor Pawlenty is not only going after those on MinnesotaCare, he would also like to see changes for those with disabilities. First, the Governor thinks all Supplemental Security Income of disabled household members should count as income in the Minnesota Family Investment Program. For those who don't know MFIP, it is in short the state's welfare-to-work program and is designed to allow the working poor a chance to work their way out of poverty without losing all support once their income reaches above the bare minimum. The program incentivizes more work, rather than encouraging more welfare. The proposed change in income eligibility means that 4,000 families will lose cash assistance and only be able to stay on food assistance, while another 500 families will lose all MFIP benefits.

Second, the short-term thinking Governor would like to restrict the number of individuals who can access home-based Medicaid services, the kind of services that allow people to live at home rather than be moved to more expensive and less desirable institutional living facilities. Third, the Governor would like to permanently eliminate funding for Minnesota Supplemental Assistance - Special Diets. The programs helps very low-income elderly and disabled adults pay for special diets required by a medical condition and helps them stay healthy and out of hospitals.

For those struggling with poverty and unemployment, the outlook is no brighter. The supplemental budget proposal includes eliminating General Assistance, a safety net program for childless adults. For many on the program, the $203 per month is their only source of income and is needed to pay for food and shelter. A short-term emergency program has been proposed, but there are no plans for what will be done in the long-term to help this population. The Minnesota Food Assistance Program provides food benefits to low-income families with legal residency (but without U.S. citizenship) and is also on the chopping block.

Twenty-eight million federal welfare-to-work dollars will be directed away from helping low-income workers and instead be used to help balance the budget deficit. The mental health budget will see cuts amounting to $17 million, 200 lost jobs, and the extermination of several new programs for both children and adults.

The sum total of the Governor's proposed public health cuts would save the state hundreds of millions, but at the cost of 84,000 people losing health care benefits and a 20 percent increase in the state's uninsured population. The U.S. Congress passed historic health care reform last week, but many programs won't go into effect until 2014. In the meantime, Minnesota must keep critical health care programs such as Minnesota Care and GAMC accessible and well funded.

The cuts extend to health care providers as well. The budget proposal includes a 2.5 percent cut in reimbursement rates for continuing care providers, a devastating blow to a sector already struggling with low reimbursement rates and negative operating budgets. Governor Pawlenty would also like to cut fee-for-service rates for inpatient hospital care for Medical Assistance and MinnesotaCare patients by three percent beginning in FY 2011. A proportional cut is also proposed for managed care programs, starting January 1, 2011. Hospitals in greater Minnesota will no longer receive reimbursement rates comparable to metro area reimbursement rates, and it will be more difficult to qualify for higher reimbursement rates for dental care.

As late as March 2, 2010 a report by the Pew Center found that Minnesota falls short in providing good dental health and access to care for disadvantaged children, especially in rural and low-income areas. The shortcoming is in large part due to the low rate the state pays to dentists to treat patients from government health programs. The report found that states with higher reimbursement rates see higher rates of dentist participation and number of kids receiving care. The proposed cuts to dental care reimbursement will likely put us even farther behind, and the rates of oral health problems will increase around the state.

There is no arguing the need to cut expenses, but how do we prioritize where those cuts should come from? Health care is one of the biggest expenditures and an easy target for massive cuts, but we should look at what makes health care expensive and what will happen when we take away care from those who are unable to find it elsewhere. The fact that someone is without health care does not mean they no longer become ill or need medical attention. Without health care coverage they will be unable to access preventive care and cheaper forms of medical care.

Choosing not to see a doctor or deciding not to buy prescription drugs because of the cost will not make illness go away, and ultimately, preventable disease will become an emergency that will need emergency care. This kind of health care is not only more costly but also more taxing on the people involved. Taking money out of the health care budget doesn't mean the expenses will cease to occur; we'll simply pay for those expenses through higher health insurance premiums and increased property taxes-two ways hospitals will be forced to recoup costs in order to stay open.

The Governor's plans to cut funding and shift costs take our state down the wrong path. As the country moves forward on health care reform, Minnesota is sliding backwards. There is a better way to solve our budget crisis than hacking away at everything that makes Minnesota great. A balanced approach that involves increasing revenue and cutting expenses will give us a fighting chance to continue the legacy of a great Minnesota.

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