Senate committee passes deep-cutting health bill

A health and human services budget bill that would trim $1.6 billion in projected spending and convert parts of Medicaid and MinnesotaCare to a voucher system passed its first state Senate committee hurdle Friday night.

The measure continues Republican legislators' march to erase a $5 billion projected budget deficit by relying on budget cuts, with no tax increases.

"Clearly, there are a lot of needs out there ... and this budget will not eliminate them. But I think we're doing what all families do," said chief sponsor Sen. David Hann, R-Eden Prairie, saying the bill represents needed reforms. "We're doing the best we can with what we have."

The bill, which received party-line approval from the Health and Human Services Committee, must, like its counterpart in the House, be passed by one more committee before it goes to the full body late next week for final approval. Several DFL senators skipped Friday's final committee vote, including Sen. Linda Berglin of Minneapolis, senior minority committee member.

Both House and Senate bills call for deep cuts in spending, but versions of the bills passed will have to go through a conference committee to work out major differences. And the final bill is certain to be vetoed by Gov. Mark Dayton unless it undergoes even more major changes, legislators said.

"What I want to know," Berglin asked Hann before the final vote after 10 hours of testimony and debate Friday, "is when you're going to start working on the real budget?"

The committee acted after hearing from more than 90 witnesses, many of whom noted the difficult budget issues facing the Legislature, but nearly all asking that the committee ease cuts to scores of health care and social programs for poor, aged and disabled people.

"Taking away the money won't take away the needs," said Sen. John Marty, DFL-Roseville. He and other DFLers on the committee argued that efforts aimed at short-term savings actually will raise costs and damage lives of the poor and sick.

Human Services Commissioner Lucinda Jesson said the department had "serious questions" about some of the bill's projected savings and opposed several of the biggest changes.

One of the biggest changes the bill would bring would be a restructuring of public health insurance in Minnesota. All families and children on Medicaid with incomes above 75 percent of poverty rate -- about $13,900 for a family of three -- would lose Medicaid coverage and receive vouchers to buy private insurance. That also would apply to all those on MinnesotaCare with incomes above 133 percent of poverty, about $24,650 for a family of three.

Hann said the change represents treating the poor with dignity by allowing them to buy their own private insurance. DFLers argued that most could not afford to buy private insurance unless it had large deductibles and copays.

The bill would seek exemption from federal oversight of Medicaid and would repeal the "early Medicaid expansion" that is moving 95,000 poor childless adults onto Medicaid from the state-paid MinnesotaCare and General Assistance Medical Care (GAMC) programs. Hann calculates that the changes would save $934 million, then cost $225 million to revive the GAMC program.

It also would cut sharply into mental health programs and services that help keep the aged and disabled out of institutions.

Under the bill, the General Assistance program, which now pays $203 a month to about 21,000 disabled people earning less than 75 percent of poverty level, would be changed to a block grant program administered by counties, but capped at $47 million, cutting about $20 million.

Warren Wolfe • 612-673-7253