Health and Human Services budget combines some good investments with harmful changes

Ben Horowitz
May 21, 2015

The Health and Human Services budget (Senate File 1458) provides more families with options for affordable child care, more resources to protect the young and care for the elderly, and better access to health care for people with disabilities and mental illnesses. Unfortunately, the final agreement also contains several disappointments like $65 million in cuts to MinnesotaCare and a potentially inefficient re-verification proposal. It also fails to include a proposal that would have better supported Minnesota’s most struggling families in the Minnesota Family Investment Program (MFIP).

A $10 million increase in FY 2016-17 for Basic Sliding Fee Child Care Assistance will help about 350 more families afford child care in an average month, and takes an important step in addressing a waiting list that is more than 4,000 families long. With Basic Sliding Fee, parents can afford to go to school or work while their children thrive in consistent care environments and employers can more easily find reliable employees.

At the same time, the Health and Human Services budget also reduces Basic Sliding Fee’s resources by $3 million in FY 2016. These are unspent funds from FY 2015 — however, these funds are held up due to procedural issues, not due to a lack of demand. The Department of Human Services testified that this $3 million would otherwise go towards serving more families.

The E-12 education bill also includes $62 million for young children through Early Learning Scholarships and school readiness efforts. However, Governor Mark Dayton vetoed this bill because it does not include funding for some of his other education-related priorities. While all of these programs can work together for families with young children, Basic Sliding Fee is the only tool that serves kids from infancy through age 12 and covers the amount of hours and range of times parents need to work.

The Health and Human Services investments targeted to children and the young total $78 million, and include:

  • $52 million for child protection reforms,
  • $7.9 million to increase resources for some of Minnesota’s most struggling families by changing the way child support payments are handled in MFIP, and
  • $2 million for the Homeless Youth Act and $3 million for Safe Harbor for Sexually Exploited Youth.

The Health and Human Services budget also includes proposals to make health care more affordable for seniors and adults with disabilities. It provides $4.8 million to reduce Medical Assistance premiums for employed Minnesotans with disabilities. The agreement also contains $3.4 million to reduce the cost of Medical Assistance for working seniors and people with disabilities who also have high medical costs.

Cuts to MinnesotaCare in the Health and Human Services budget will also make it harder for some Minnesotans to afford health care. The $65 million in reduced funding will raise premiums and triple out-of-pocket costs for working Minnesotans. MinnesotaCare offers affordable health insurance for households earning 133 to 200 percent of the federal poverty guideline ($15,654 to $23,540 for an individual). These cuts are unnecessary because both the general fund and the main funding source for MinnesotaCare have projected surpluses in the FY 2016-17 biennium. Because the changes result in higher costs that add up with each visit to the doctor, chronically ill Minnesotans will be hit the hardest.

The Health and Human Services agreement contains an eligibility re-verification proposal that could create a procedural barrier for families eligible for health care. The House Health and Human Services omnibus bill (House File 1638) contained a similar version that would have hired a third-party vendor to re-verify the eligibility of participants in services for families. The Health and Human Services budget will instead have the Department of Human Services perform a similar task within slightly different parameters. We were glad the conference committee moved away from Illinois’ harmful approach. However, the state must be sure that its audit focuses on Minnesota’s ability to determine eligibility rather than creating a new layer of red tape that causes eligible families to lose their health care.

The Health and Human Services conference committee did not include a proposal from the Senate and Dayton that would have raised the cash grant in MFIP for the first time in 29 years. Since 1986, a very low-income family of three participating in MFIP has received $532 per month. That amount does not cover a family’s basic needs. A strong body of research connects increased family resources to better outcomes for kids. Policymakers missed an opportunity to help thousands of Minnesota children take a step away from living in deep poverty.

Other significant Health and Human Services expenditures include:

  • $138 million for higher payments to nursing homes,
  • $76 million for mental health and chemical dependency, including efforts to expand access, build new facilities, and provide innovative services, and
  • $3.3 million to increase access to dental services through higher payments to dental providers.

The Health and Human Services budget contains praiseworthy investments in Minnesota’s children, seniors and people with disabilities or mental illnesses. However, real damage will be done by cuts to MinnesotaCare, and the state’s eligibility audit could install a new barrier to affordable health care. This “some steps forward, some steps back” approach was not necessary in a year with a nearly $2 billion surplus.

-Ben Horowitz