The bill's sponsor, Duluth Democratic Rep. Tom Huntley, was under orders from House leadership to trim $150 million in the HHS budget from projected growth in need for social programs offered by the state.
Minnesota House Democrats proposed a health programs spending bill Tuesday that includes new money for mental health treatment and small salary hikes for nursing home and long-term care workers, but helps pay for it with an increase in the state surcharge on hospitals that even the bill sponsor said was likely to be "very controversial."
The health and human services (HHS) finance bill amounts to the DFL-controlled House's opening offer on how to divide public dollars in one of state government's largest spending areas. House Democrats are proposing about $320 million less than Gov. Mark Dayton, also a Democrat, wants to spend on such programs. Another proposal, from Senate Democrats, is expected Wednesday.
The bill's sponsor, Duluth Democratic Rep. Tom Huntley, was under orders from House leadership to trim $150 million in the HHS budget from projected growth in need for social programs offered by the state. Dayton proposed spending about $170 million above those projections, which accounts for the $320 million difference.
Huntley proposed offsetting that reduction, and covering spending boosts in some areas, with an increase in the state's surcharge on hospital budgets — from the current 1.56 percent to 2.63 percent. Under the bill, hospitals that treat large numbers of patients on state medical assistance would be eligible for federal subsidies meant to offset the higher surcharge. Huntley said hospitals most likely to benefit would be in urban and rural areas; others, like Mayo Clinic and suburban hospitals, would take a bigger financial hit.
"I know it's going to be very controversial," Huntley said. "This is one where there are winners and losers."
Indeed, Republican Rep. Jim Abeler raised concerns about the surcharge increase at a hearing of the House Health and Human Services Finance Committee. "We will see places closing that were really very well run, and we don't want that," said Abeler, of Anoka, the lead Republican on the committee.
Mary Krinkie, lobbyist for the Minnesota Hospital Association, said her group opposed the bill because the plan would likely divide member hospitals in different areas.
Huntley said it should also be considered that hospitals in Minnesota are expected to see a four-year, $800 million increase in state and federal funding tied to the implementation of the new federal health care law.
The bill also proposes raising about $50 million by making HMOs return excess reserves fed by government insurance programs. Some of the additional money will go to fund 2 percent cost-of-living salary increases for nursing home workers and long-term care providers.
"It will allow those facilities to address chronic turnover problems and improve care for residents," Huntley said. Those workers have not had a raise in more than four years.
In coming in below Dayton's proposal, House Democrats jettisoned some spending increases sought by the governor. Dayton requested money to expand state-subsidized child care, which House Democrats did not include. Huntley said he hoped that need would be offset by spending increases to cover all-day kindergarten that are part of the House education budget proposal.
The House is adopting Dayton's proposed spending increases on mental health programs that have a focus on prevention. Those include beefing up school-based mental health services and mental health crisis response.
The bill includes numerous policy and spending changes meant to help Minnesota implement the federal health care law. Also in the bill is a requirement for a study in hospitals of nurse staffing levels, the results of a compromise between hospitals and the state nurses union in their long-running dispute regarding whether hospitals are employing enough nurses to maintain care standards.