Health Care Access Fund contributes $399 million to deficit fix

The Health Care Access Fund (HCAF) collects money through health care provider taxes and premiums from MinnesotaCare enrollees. Created in 1992, the HCAF was intended to provide low-cost health care for working Minnesotans, so use of these funds for other purposes is controversial. However, the HCAF is a popular place to look for additional resources whenever the state faces a budget deficit.

This year is no exception. The Governor’s supplemental budget draws $250 million outright from the HCAF and transfers it to the general fund to help fill our $935 million budget hole for this biennium. That part is obvious.

However, the Governor’s budget draws an additional $48 million in this biennium (and another $101 million in the FY 2010-11 biennium) from the HCAF by doing some “refinancing.” Around the State Capitol, “refinancing” means you change which fund pays for a particular program. In this case, we are talking about transitional health insurance for adults without children (for you health care geeks – this is Transitional MinnesotaCare for those moving from GAMC to MinnesotaCare). This program has been funded from the general fund since it was implemented during the 2005 Legislative Session – and the Governor proposes paying for it from the HCAF instead.

Many will object to this change since the Governor reduces resources available in the HCAF by $149 million over the next three years (and more on into the future) without making any improvements in access to health care for working families.

So, between the $250 million transfer and the $149 million refinance – the HCAF is contributing $399 million over the next three years to help solve our budget deficit. Want to see for yourself? Then take a look at the information from the Department of Finance.

-Christina Wessel

About Christina Wessel

Christina served as the Minnesota Budget Project's deputy director until January 2014.
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