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Investments in healthy people, healthy communities at stake this session with fate of provider tax

Clark Goldenrod
Jan 09, 2019

Funding for affordable health care for one million Minnesotans is at risk in the 2019 Legislative session because the health care provider tax is set to expire on January 1, 2020. Provider tax revenues are the primary source of funding for the Health Care Access Fund (HCAF), which goes toward investments in Minnesotans’ health and well-being.

The Minnesota Legislature created the provider tax in 1992 to fund a bipartisan health care reform package aimed at more Minnesotans getting health care coverage. The provider tax primarily supports affordable health care through MinnesotaCare and Medicaid, and other public health priorities. But due to a deal struck in 2011 to pass the state budget and end a 19-day state government shutdown, the provider tax will sunset at the end of this year unless policymakers act to maintain it. Allowing the provider tax to expire would result in about a $700 million annual loss in dedicated funding for health care in Minnesota.

Policymakers can’t afford to hit the snooze button this session on extending the provider tax:

  1. One in five Minnesotans have better access to a doctor when they’re sick thanks to Medicaid and MinnesotaCare, which are funded in part by the provider tax. These include working Minnesotans who don’t have affordable insurance through their employers, seniors, and Minnesotans living with disabilities.
  2. The positive balance in the Health Care Access Fund won’t last long without the provider tax. While it’s true that the HCAF currently has a projected surplus of $591 million for FY 2020, that’s largely due to positive balances carried over from previous years. And that balance is being spent down each year as it is used to help fund Minnesotans’ health care needs. The November forecast shows that by FY 2023, the Health Care Access Fund will have a deficit of almost $1 billion if the provider tax is allowed to expire.
  3. Allowing the provider tax to expire would put pressure on the state’s general fund, and this could have serious consequences for other public services that Minnesotans value. Losing close to $700 million annually in funding for the health of Minnesotans could constrain other investments in areas like K-12 education, financial aid for college students, and statewide access to broadband.

In the 2019 Legislative Session, Minnesota policymakers must act to extend the provider tax in order to preserve health care for over one million Minnesotans and keep moving us forward toward becoming a state where good health is available to all.

To learn more about why the provider tax is so important, check out our new analysis.

-Clark Goldenrod