Minnesotans fear disability benefits overhaul will lead to more institutionalization

Lance Hegland lost little things when he moved from his apartment to a group home.

The freedom to have the window open on a cold day without being chastised. Picking what he wanted to eat for dinner.

And then there were the big things, like a feeling of lost respect and a worry that poorly trained staff could injure him.

“You lose a lot of dignity; you lose a lot of autonomy; you lose a lot of inclusion,” said Hegland, 51, who lives in Brooklyn Park. He has muscular dystrophy and had to make the shift three years ago after he couldn’t find enough providers to care for his needs in his own place.

He fears others will be forced to leave their homes or a family member’s residence and move into group homes or assisted-living facilities under a proposed state overhaul of disability waivers.

Minnesota is reworking its Medicaid waiver system, used by roughly 70,000 people with disabilities to cover vital services, including employment support, transportation and assistance with such daily activities as bathing, eating and dressing.

The Department of Human Services (DHS) is rethinking the waivers to try to simplify the system and give people “more choice and control over their services.” Department officials said their proposed model would make more money available for the vast majority of waiver recipients.

However, early budget figures have triggered an outcry among some who rely on the aid. They show people living in group homes would be eligible for far larger sums than those in their own homes or living with family.

“I am afraid we’re going backward,” Hegland said. “We’re incentivizing institutionalizing people.”

The pushback recently prompted legislators to strengthen requirements that DHS officials collaborate with people who will be affected by the so-called “Waiver Reimagine” process. But many Minnesotans with disabilities and advocates remain wary.

Minnesota has four types of disability waivers based on needs or diagnoses. They serve those with brain injuries, the chronically ill, people with developmental disabilities or related conditions, and those whose disabilities would otherwise require a nursing facility level of care.

Under the new system, there would be just two waivers. People living in their own homes or with loved ones would get one; those in settings such as group homes and assisted-living centers would get the other.

At the core of many advocates’ concerns is a chart DHS published in 2021 breaking down how much money people living in different settings could receive annually under the reimagined system. The proposed budgets vary depending on a person’s needs, but the range for an adult living with family tops out at $87,298. Those who have their own home could qualify for up to $93,674.

Meanwhile, people living in community residential services, such as group homes, could qualify for up to $210,064.

Those numbers will be updated, DHS officials said. They said the budgets were shaped by the cost and use of services. Historically, people living in settings such as group homes use more service hours, while people living independently use less.

People with disabilities said they are already struggling to piece together the help they need to live in their own homes amid personal care assistant shortages. They worry the proposed waiver structure would result in more providers following the money to serve people in group homes rather than working with those in individual or family residences.

“Waiver Reimagine, as it is designed now, would definitely take disabled people’s rights away, number one,” said Lauren Thompson, 36, a disability rights advocate who has cerebral palsy and has had a waiver for more than 20 years. “Number two, it would be much more expensive for the taxpayers because more people would be pushed into more expensive services.”

Thompson served on the advisory committee for Waiver Reimagine but left amid frustration over a process that she said wasn’t incorporating feedback.

Lawmakers passed the new legislation this session. It mandates that the advisory group must be able to “collaborate in a meaningful way” in the waiver rethinking process and in a revision of MnCHOICES, the state’s tool for assessing people’s needs and determining what services they require to live well.

“We need to fundamentally revamp how we’re doing engagement,” Natasha Merz, the DHS assistant commissioner of Aging and Disability Services, said at a legislative hearing this spring. “We need to hear from people. We need to show them that their input has changed the arc of this project.”

The state is trying to make the waiver system easier to navigate, Merz said. She said officials want more people to be able to self-direct their dollars, meaning they are in charge of a budget and can design a plan to meet their needs and employ workers. They are also trying to create consistency across the state, Merz said.

A Star Tribune report in 2019 highlighted issues with the arbitrary and confusing system for distributing aid and how inconsistencies across counties have led families to move in search of the care they need. The report also examined issues with MnCHOICES, which was prone to service-disrupting crashes.

Families who rely on waivers are also raising red flags with the ongoing MnCHOICES revamp. They warn that people are seeing their aid cut after an assessment, even though their medical needs did not change.

Katrin Bachmeier has four children with disabilities and is involved in Facebook groups for households like hers. She said she sees posts about funding cuts and unsuccessful appeals of assessment outcomes.

“We’re just losing really, really life-threatening appeals left and right,” she said.

The waiver program provides about $150,000 to Bachmeier’s 21-year-old daughter Nyla, who has cerebral palsy and a brain injury. The money allows Nyla to live with her family in their Eagan home and pays for her personal care assistant Rachel Kalsow.

Kalsow described her job as ”being an extra limb” for Nyla. She ensures all the shampoo is rinsed from Nyla’s hair and that she takes her seizure medication. She’s a companion on trips to the beach or when Nyla rides her adaptive tricycle, which was also paid for with waiver dollars.

Bachmeier said her family and others are terrified their dollars will be slashed as the state reworks its systems.

The state is monitoring data trends and will analyze why people’s budgets change, a DHS spokesman said in an email, adding that people can reach out to DHS to discuss changes.

The state agency had planned to debut the reimagined waiver system in January 2026. It is now eyeing spring 2027 due to delays in the assessment system update, as well as community members’ questions and concerns.

Families must be heard and valued as the system is redone, said Sen. John Hoffman, DFL-Champlin, who chairs the Human Services Committee. He said having more people in group homes is “the complete opposite of what we’re trying to do in the world of human services.”

Hoffman said lawmakers mandated that DHS ensures the waiver changes don’t cause unintended service disruptions.

Attorney Misti Okerlund, of the newly launched initiative Disability Voice Advocates said she was skeptical that new legislation would change the waiver overhaul process. If it doesn’t, she said, the disability community has options, including returning to the Legislature or filing lawsuits and civil rights complaints.

“We’re going to be watching and organizing,” Okerlund said. “If we feel DHS is not going to partner with the very people they are supposed to be serving well, we’re going to have to take a stick to the fight.”