Round One of HHS runs its course…Round Two begins

The health and human services conference committee put in a marathon session on Saturday – starting at 9:30 in the morning and wrapping up around 5:30 a.m. on Mothers’ Day (I’ll admit that I gave up around 3:30 a.m.). The House and Senate acted quickly to pass the bill on Monday and send it along to the Governor.

So, what happened in HHS, Round One (HF 1362)? You can look at the bill language and the spreadsheet online, but here is a quick synopsis:

Overall, the Round One bill cuts spending in health and human services by $489 million in FY 2010-11 and $742 million in FY 2012-13.

Health care. The compromise bill did not include any of the Governor’s reductions in eligibility for health care or his proposal to merge the Health Care Access Fund into the general fund. In fact, there are a few positive proposals in the compromise bill, including several small reforms to expand coverage for children. However, the bill includes a 3% cut in reimbursement rates to most providers (although long-term care facilities get a 2.58% cut, specialty care providers get a 5% cut and primary care providers are exempted from cuts).

Persons with disabilities. Most of the proposed cuts to persons with disabilities were included in the compromise bill, including limits on disability waivers, reductions in Personal Care Assistance services that will impact thousands, a reduction in the personal needs allowance for individuals living in group residential housing, and cuts in provider rates.

Child care. The compromise bill avoids the Governor’s reductions in child care and includes $8 million in federal resources to reduce the waiting list for child care assistance. The bill also includes some funds for a quality rating system and a school readiness pilot.

Families moving from poverty to self-sufficiency. In the end, the changes in the Minnesota Family Investment Program (MFIP) are minimal. The compromise bill avoids some of the negative proposals  – like cutting cash assistance for families receiving a housing subsidy or Supplemental Security Income (SSI). But it also skips some of the positive proposals – like exempting families from the 60-month MFIP time limit during this economic downturn.

The compromise bill does include the negative proposal to reduce the work participation cash benefit and cut the MFIP consolidated fund (although the cuts are limited to administrative functions). On the positive side, it looks like the bill provides $8 million for “stepping stone” jobs – short-term paid work for parents on assistance who cannot secure work in the competitive labor market.

Other provisions. Both senior nutrition and community action grants see a temporary reduction in state funding in anticipation of an influx of federal funding. On the other hand, supportive housing services get $3 million in one-time resources for FY 2010-11 and the Homeless and Runaway Youth Act goes from zero funding to $218,000 for the biennium (and $238,000 in base funding in the next biennium). Food shelves, however, end up with no increase for FY 2010-11.

That’s a quick (not a comprehensive) look at Round One. Feel free to leave a comment if you think I’ve overlooked something important.

But the HHS conference committee is back again working on Round Two. Remember that tax bill the legislature passed last Friday? That bill raised about $1 billion in revenue and used the resources to fund education, hospitals, nursing homes and long-term care facilities. The Governor, however, vetoed that bill. House and Senate leadership argue that if his veto stands, then the legislature will have to fill that $1 billion hole with an additional $1 billion in spending cuts in FY 2010-11.

Well, Round Two of the HHS discussion (HF 1988) suggests how the legislature will come up with the health and human services share of that $1 billion in additional spending cuts (this would be above and beyond the HHS cuts included in Round One). The Round Two proposal contains just two provisions – cut reimbursement rates for hospitals by 20.4% ($194 million in FY 2010-11) and nursing homes and long-term care facilities by 25% ($207 million in FY 2010-11). Those two cuts add up to $401 million of that $1 billion in additional cuts…the other $586 million in spending cuts is likely to come in E-12 education.

The conference committee heard testimony from the community today and is meeting at 10:00 am on Wednesday to take more testimony. It is unclear when the committee plans to take action on the Round Two bill.

-Christina Wessel

About Christina Wessel

Christina served as the Minnesota Budget Project's deputy director until January 2014.
This entry was posted in Budget Proposals, Health Care. Bookmark the permalink.

2 Responses to Round One of HHS runs its course…Round Two begins

  1. Christina Wessel says:

    The Minnesota Budget Project has a mission to provide research, analysis and outreach on tax and budget issues, emphasizing their impact on low- and moderate-income persons and other vulnerable populations (see our About page). So we do evaluate whether budget proposals will have a positive or negative effect on those particular populations. We don’t claim to be journalists, and our mission is clearly stated, so I wouldn’t consider it to be a hidden bias. However, we do aim to be fair and reasonable in our evaluations and base those conclusions on factual information. For example, it is important to us to link to original sources whenever possible so people can check them and come to their own conclusions on the issues.

  2. Terry Stone says:


    Your characterization of budget items as “negative” and “positive” are a matter of opinion. Based upon your characterizations, I comfortably conclude that you have a strong liberal bias. I prefer objectivity and I will use my own adjetives when needed.

Leave a Reply