Safety net is squeezed by budget cuts

Published 1:32 pm Saturday, December 19, 2009

According to our most recent budget forecast, Minnesota is facing a $1.2 billion dollar deficit for the current 2010-11 biennium and the projections only get worse over the long-term as the deficit rises to $5.4 billion in 2012-13.

Over the past several weeks, our state budget officials have explained that these projected deficits are the result of an unprecedented revenue problem that is reeling from the biggest biennial drop in Minnesota income tax revenue since World War II. In this economic downturn fewer people are working or working fewer hours and too often for less wages. Jobs are at the core of our current budget shortfall and will not be remedied with any quick fixes as we begin a slow recovery in both jobs and wages.

So what do these projected deficits mean for one of Minnesota’s largest safety-net hospitals, the Hennepin County Medical Center, already hit hard by Gov. Tim Pawlenty’s elimination of the general assistance medical care program scheduled to end medical coverage for 36,000 impoverished, uninsured Minnesotans without dependents on March 1, 2010?

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First of all, to truly consider the fallout of the projected deficits, it’s important to understand that these projections do not include reinstatement of funding for the general assistance medical care program. If the forecast assumed continuation of the program at current levels, an additional $437 million would be required in the 2010-11 biennium and $928 million would be required in the 2012-13 biennium.

With that in mind, let’s consider what the prospect of losing GAMC funding means to HCMC services. Recently HCMC’s board approved big cuts in their 2010 budget in anticipation of losing $90 million in compensation for caring for uninsured patients over the next two years at the same time its cost for treating these patients will rise. Decisions made to date include eliminating several hundred more jobs next year, restricting access to its non-emergency services, and closing a cardiac rehabilitation clinic as well as a senior care clinic.

Clearly the elimination of the GAMC program in the face of looming deficits only serves to further burden the deteriorating financial conditions at Minnesota’s largest health care provider to the state’s poor and uninsured. Currently the HCMC board is working with lawmakers on a proposal to prevent some of the hospital’s harshest budget cuts and preserve basic health care for vulnerable Minnesotans without increasing costs for cash-strapped middle-income Minnesotans.

The legislative solution proposes a short-term, lower-cost reformed GAMC program for 16 months (March 1, 2010 to June 30, 2011) to serve as a bridge to national health care reform. This program will provide ongoing access to basic care for those currently enrolled in GAMC, protect thousand of health care jobs, and restore the solvency of the health care access fund into 2012. This solution is relies largely on cost saving reforms and is funded without new taxes. During the remaining weeks before the 2010 legislative session convenes, lawmakers will continue to collaborate with health care stakeholders on a bipartisan solution. I will keep you updated as the process unfolds.

As the chairwoman of the Housing Finance and Policy and Public Health Finance Committee at the Minnesota House of Representatives, I will keep Minnesotans informed about public health finance issues and policies during the 2010 legislative session. Please feel free to call or write with any ideas or issues. I can be reached by phone at (651) 296-0294, by mail at 471 State Office Building, 100 Martin Luther King Blvd., St. Paul, MN 55155 or by e-mail at

Karen Clark, DFL-Minneapolis, is the state representative for House District 61A.