Health and human services budget takes shape

House and Senate negotiators Saturday night were on their way to approving more than $12 billion in health and human services funding for the next two years.

The legislation includes new funding for nursing homes and mental health programs, but few of the major cuts and program changes legislators were discussing earlier in the session.

That’s in spite of a last minute deal by legislative leaders that effectively forced conference committee members to find more than $300 million in savings.

“There’s a lot of shifts in this bill that make the cut somewhat manageable,” said Senate Health and Human Services chair Tony Lourey, DFL-Kerrick.

“There’s also some incredibly important investments in this bill. We’re investing in child protection, we’re investing in mental health,” Lourey said. “Overall, this is a bill I’ll be asking all my colleagues to support.”

Much of the savings in the coming biennium come from a complicated arrangement that involves moving $455 million from general health and human services spending this year into the Health Care Access Fund, which is used to pay for some health care programs, effectively lowering spending in the coming budget cycle.

Senate Majority Leader Tom Bakk, DFL-Cook, called the shift a budget gimmick meant to allow Republicans to claim lower spending in the coming year. But Bakk said he ultimately agreed to the plan because it has the overall effect of increasing program spending.

“We are getting more spending than we originally had in the Senate and the governor’s bill,” Bakk said.

Among other things, an additional $25 million will be saved by requiring the Department of Human Services to verify the eligibility of people on public programs. That’s far less than the House GOP estimate that DHS could save $300 million over two years by cracking down on fraud.

And the bill effectively increases cost-sharing for those enrolled in MinnesotaCare, a state health care program for people who make too much money to qualify for Medical Assistance and not enough to buy their own plan if their employer doesn’t offer them one. That provision will save about $65 million.

The change to MinnesotaCare is significantly smaller than one initially proposed by House Republicans that would have phased out the program entirely, saving the state more than $500 million over two years.

Senate Democrats refused to agree to even a modified version of that plan.

“I’m disappointed we weren’t able to achieve some of the reforms and savings I think we can and should do down the road,” said House Health and Human Services Finance Chair Matt Dean, R-Dellwood.

But Dean said he’s happy the bill includes $500,000 for a task force to decide what to do with the program before its funding source dries up in fiscal year 2019.

“We know we will talk about the issue because there’s no way to pay for what we have down the road,” Dean said.

There are some wins in the bill for Republicans, too, who have been making a big push to either eliminate or change the state’s health insurance exchange, MNsure.

That includes a House proposal that requires the state to request a federal waiver to allow anyone who qualifies to get federal subsidies to help buy insurance whether they purchase it through MNsure or directly from an insurance company.

MNsure’s premiums will be released earlier, too – a change the state’s business community had been pushing for.

When the new health and human services budget target was released Friday after five days of negotiations between Gov. Mark Dayton and legislative leaders, some interest groups were concerned that there would be even less money to go around.

Among them is Sue Abderholden, who is executive director of NAMI Minnesota, a group that supports mental health services.

But in the end the bill will include funding for the programs she supports.

“They’ve invested in every single section of our mental health system,” Abderholden said, including prevention programs, behavior health homes and mental health crisis teams. “Across the board, really, really good investments.”

The nursing home industry also has some long-sought after funding. The conference committee allocated $138 million over two years in part to help boost pay for nursing home workers and make the positions more competitive.

It was a provision pushed by House Republicans.