Health spending endgame nears at Legislature

DFL lawmakers pushed a step closer to the Legislature's budget endgame Monday, with action in both houses on bills to trim millions of dollars in state spending for health and human services.

With just two weeks left in the session, those bills likely will be on the House and Senate floors this week and in conference committee by the weekend to resolve substantial differences, including $40 million more in cuts in the House version.

In the House, Republicans have said they probably will use the floor debate to seek deeper spending cuts and avoid expanding Medicaid.

To deal with a nearly $1 billion budget shortfall, the Senate bill would cut $114 million in health and human services spending this biennium, compared to a $154 million cut in the House bill and $196 million proposed by Gov. Tim Pawlenty.

Unlike the governor's plan, the House and Senate bills would allow adults without children to retain health coverage on MinnesotaCare, the program for lower-income working people. They would also preserve some help with meals and housing repairs for very low-income seniors and disabled people.

Both also would cut services and raise some fees. However, the House bill would make substantially deeper cuts in mental health programs.

But the big question is whether the final legislative agreement on spending, almost certain to include a controversial expansion of Medicaid, will pass muster with a skeptical Pawlenty.

"The Medicaid part will be in the bill," said Sen. Linda Berglin, DFL-Minneapolis, sponsor of the budget bill that was introduced and approved Monday, then sent to the Finance Committee before heading to the Senate floor.

Minnesota and 10 other states may add new Medicaid financing for poor, childless adults three years earlier than other states, under the new federal health law. That would replace a newly revamped General Assistance Medical Care program, scheduled to start June 1 but rejected so far by most hospitals.

Tapping into Medicaid now might bring the state $1 billion over the next three years, but the state would have to match that at a time when the long-term budget outlook is bleak.

"There's not a lot of time to get this wrong," said Kevin Goodno, former commissioner of health and human services under Pawlenty and now a lobbyist for some groups that depend on state health and human service spending. "If the governor gets a bill he doesn't like next week and vetoes it, there's only a few days to pass a new bill and get it to his desk."

Warren Wolfe • 612-673-7253