Legislative Update: 7/26/11


The Minnesota Legislature passed all of the state’s budget bills and Governor Dayton signed them into law at 9:00 am Wednesday, July 20.  This action was based on a compromise reached last week between Dayton, Speaker of the House Kurt Zellers and Senate Majority Leader Amy Koch. While the compromise was disliked by both sides, they agreed to it to end the 19-day state shutdown.

Overall the new budget spends $35.4 billion over the next two-year budget period. This is $1.4 billion more than the bills the Legislature passed and the Governor vetoed, and approximately $2 billion less than the budget proposed by Governor Dayton.  In the Health and Human Services area, the new budget spends $11.3 billion of general fund money. This is nearly $500 million more spending than the Legislature proposed and $180 million less than the Governor’s recommendations.

The Health and Human Services bill was first released to the public Tuesday night around 10:00 p.m. and voted on just after midnight. After reviewing the language in the bill, and after listening to the supporters and detractors summarize the bill, it is a mixed bag.

Key spending and budget elements:

  • It spends approximately $500 million more in HHS than was passed by the Legislature in May.
  • It continues the early enrollment of MA for adults without children. This results in the elimination of that state’s GAMC program and the capturing of federal matching money to cover this population.
  • It does not cut anyone completely off our public programs.
  • It does not limit us from receiving federal money from the Affordable Care Act (ACA).
  • It begins phasing out the 2% provider tax and repeals it altogether in 2019.
  • It provides $15 million to the State Health Improvement Program (SHIP) for FY 2012

Noted spending cuts:

  • It cuts general fund spending in the HHS areas by nearly $1 billion.
  • It cuts physician and other outpatient provider rates by 3% across the board.
  • It includes cuts to PMAP health plans ranging from 10-13% that most likely will be passed on to physicians and other providers in reduced payments.
  • It implements a voucher program for MinnesotaCare that will provide vouchers to adults without children earning between 200% and 250% of the poverty level.  These vouchers will allow enrollees to purchase coverage in the private market.  There is not enough detail in the bill to know whether the coverage they will be able to afford will adequately cover outpatient services without large deductibles.
  • It cuts the Medical Education and Research Cost (MERC) program by 50% in 2012, reducing to a 25% cut in 2013.

What is also important to note is there are a number of controversial items that were in the earlier passed HHS legislation that are not a part of this deal.  They include:

  • There are no changes to newborn screening program or limitations to the collection of that data.
  • There is no language limiting the use of vaccines that include “fetal DNA.”
  • There is nothing that reduces reimbursements to “high-cost providers.”
  • There is nothing that “silos” health care homes by creating pregnancy health care homes, mental health care homes, or other condition specific health care homes.
  • There are no new limitations on stem-cell research or abortion-related services.

Of particular interest to the MN-AAP, the bill does contain language creating the “Minnesota Task Force on Prematurity.”  The task force is charged with crafting a report to the Legislature.  The bill also continues the “Autism Spectrum Disorder Task Force,” on which a member appointed by the MN-AAP is to serve. It too is tasked with drafting a report to the Legislature.

Annual Sponsors

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University of Minnesota Health
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Mayo Clinic
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