MMA Viewpoint
Balancing Act
Minnesota received another dose of bad budget news at the end of 2009 when we learned that the state faces a $1.2 billion deficit for the rest of this budget cycle. This means that MMA members, leaders, and staff will be going back to the Capitol when the legislative session starts February 4 to try to convince lawmakers and the governor to take a balanced approach to resolving this round of budget troubles.
This is something they failed to do during the last session, when the state faced a $4.8 billion shortfall. During the heat of that debate over how to resolve the deficit, the MMA urged Gov. Tim Pawlenty and lawmakers to do it with a combination of cuts and new revenues. We urged lawmakers not to make cuts that damaged the health care safety net at a time when Minnesotans needed it most.
Neither lawmakers nor the governor followed that advice. The DFL- controlled Legislature passed a budget that reduced forecasted health care spending by $500 million in part by cutting reimbursements for specialty physicians serving patients on state-funded programs by 5 percent. Pawlenty deepened the reimbursement cut to 6.5 percent and slashed another $380 million from health care programs by unalloting funding for General Assistance Medical Care (GAMC).
Our elected officials have consistently chosen to cut health care over other services. Between 2008 and 2013, cuts to health and human services programs have accounted for about two-thirds of spending reductions, or $3.3 billion, despite the fact that these programs make up only about a third of the state’s budget.
As a result of last year’s budget decisions, a crisis looms for about 30,000 Minnesotans scheduled to lose their health coverage March 1. Safety-net hospitals such as Hennepin County Medical Center have laid off workers in anticipation of losing tens of millions of dollars.
I know our leaders are genuinely concerned about the Minnesotans in the GAMC program who are some of the most disadvantaged residents of our state—more than 60 percent of those served by GAMC have serious mental health issues. But the solutions they have proposed have been disheartening, as they continue to eat away at Minnesota’s health care safety net.
The most recent proposal to save GAMC put forward by DFL leaders has components that are on the right track—it restores about $300 million of the $400 million cut from the program and has the advantage of capturing lost matching funds from the federal government. However, it also includes a 50 percent cut in outpatient payment rates for providers who care for GAMC enrollees. Even at 100 percent, those payments haven’t covered practice costs for years. Lawmakers need to know that reimbursement for state programs has only been increased once, by 3 percent, during the past 16 years.
The Pawlenty administration’s proposal to shift GAMC enrollees to MinnesotaCare is not the right solution to the problem the governor created by unalloting funds for GAMC either. It will not ensure that all of these vulnerable patients have adequate health coverage long term, and it has the potential to quickly bankrupt MinnesotaCare and drain the Health Care Access Fund.
MMA members need to once again tell lawmakers that the budget should not be balanced on the backs of the sick and the providers who care for them. That approach will lead to even higher overall costs as the uninsured seek care in emergency departments.
There are things the state can do to solve its budget shortfall and avoid tearing a hole in the health care safety net. For one, it can raise revenues by increasing tobacco and alcohol taxes. We providers will do our part to ensure that the sick are cared for and that state dollars are well-spent. But we can’t do it all. Lawmakers and the governor need to keep working toward budget-balancing solutions that are truly balanced.