Legislative Update

January 30, 2009

Governor’s Budget: No New Taxes and Deep Cuts in Health and Human Services
Governor Tim Pawlenty unveiled his $33.6 billion proposed budget on January 27.  To address the state’s $4.8 billion projected deficit, the governor proposes a net cut in spending of 2.2% or $750 million over the current state budget.  It includes $1.3 billion in accounting shifts, $983 million in revenue from selling half of Minnesota's ongoing tobacco payments and $920 million in federal aid expected from a federal stimulus package.  Pawlenty earmarks $860 million for tax cuts, for new spending including increases for public schools and for replenishing the state's now-empty rainy-day account.  He also proposes a wage freeze for all public employees including teachers.

According to the Governor “we are not able to continue to fund everything at ever-increasing levels, so tough decisions need to be made about what is most important to Minnesota.” However, he may be delaying some of those tough decisions because he uses one-time money to pay for 60% of the deficit.

The proposal provides $2.5 billion in spending cuts—some of it offset by increased spending in other areas.  He proposes the following changes over the forecasted increases:

K-12 Education—a 1.1% increase tied to reforms

Higher Education—a 9.9% decrease

Property Tax/Local Aids—a 15.3% decrease

Health and Human Services—a 10.3% decrease

Debt Service/Capital Projects—a 89.6% decrease

All other areas—a 1.8% decrease

Changes to Healthcare Programs
The Governor made a number of drastic changes in basic healthcare.  84,000 adults are expected to lose their health care coverage under his proposal.

• Eliminates the GAMC hospital only program, the transitional MinnesotaCare program, and MinnesotaCare eligibility for all adults without children, all effective 1-01-10. ($508.1 million State savings) 
   

• Eliminates MinnesotaCare eligibility for parents (adults with children and caretakers) effective 7-01-10. ($65.7 million State savings)
   

• 3% reduction for basic care services in the MA and GAMC programs; includes inpatient hospital services, outpatient services, physicians, mental health, etc. ($96.3 million State savings).  In addition for hospitals, it eliminates the first 3 months of rebasing hospital rates, and the hospital inpatient quarterly payments under MA—these save the state an additional $57.7 million.  It also would eliminate the partial elimination of the exclusion of mental health from hospital ratable reductions.
   

• Eliminates dental, chiropractic and podiatric care for adults over 21.  This saves the state about $40 million.  Its also eliminates the critical access dental add-on under the MinnesotaCare and Medical Assistance programs. ($12.3 million State savings)
   

• Eliminates the Health Care Access Fund and transfers all money to the General Fund.  Essentially, the 2% provider tax on doctors and hospitals that was initiated to provide access to health care will now pay for roads, schools, etc.
   

• Reduces DHS administration costs by $12 million.
   

• Reforms payments for Chemical Dependency providers and delays new mental health initiative.
   

• Eliminates several of the 2007 reforms to reduce barriers to public program enrollment including certain MinnesotaCare premium reductions; MinnesotaCare premium grace month and additional month for enrollees who fail to submit renewal forms, automatic MinnesotaCare eligibility for children, and outreach incentive grants of $25.
   

• Limits Medical Education Research Costs (MERC) carve-out of MA capitation rates to comply with new federal requirements, restores FY 2009 MERC payments-$38 million and delays transferring of MERC funds from DHS to MDH—this is a one-time saving.
   

• Includes $350,000 per year for base funding for the Center of Health Informatics to ensure implementation of the e-health requirements.
   

• Reduces funding for the Statewide Health Improvement Program (SHIP) from $47 over two years to $24 million over four years.  This was passed as part of the health reform legislation to reduce chronic diseases by targeting interventions to reach the broadest population possible including schools, worksites, communities and health care.
   

• Replaces activities associated with defining an “essential benefit set” with a less expensive study on value-based insurance design using existing Health Economics Program research capacity.
   

• Reduces base funding for Family Planning Special grants by $1.05 million each year.

The size of these cuts will put a real strain on physicians and other providers of services through our health care safety net programs.  It will be difficult for providers who see a large number of public programs to continue to cover their costs with these cuts.

The next step in the process is for the legislative committees to hold hearings on the Governor’s budget to better understand the rationale behind his decisions.  They will begin creating their own budget following the next budget forecast which is scheduled for the first week of March.

Health Coverage Proposals
Senate and House health committees heard numerous proposals to provide more subsidized coverage for more Minnesotans.  In the Senate the Senate Health & Family Security Committee heard SF 118 (Marty), the Minnesota Health Plan on January 19.  The purpose of the bill is to “provide all medically necessary health care services for all Minnesota residents...” through the creation of a state health plan.  The bill would prohibit the sale of private health insurance in Minnesota.  Even though most legislators believe there is no money to do this in Minnesota, the bill was passed and re-referred to the Senate Commerce & Consumer Protection Committee.  The House companion, HF 135 (Bly) has not been scheduled for hearing.

In the House Health & Human Services Oversight & Policy Committee, they heard two bills related to coverage.  The first was HF 42 (Thissen), to make it easier for Minnesotans who are receiving unemployment compensation to qualify for MinnesotaCare.  It would waive the four-month waiting period and waive asset and spouse income from eligibility calculations.  The bill was laid-over for further discussion at a later date.   The Senate companion is SF 347 (Bonoff).

The second House bill was HF 174 (Thissen), the Minnesota Health Security Act.   This is the new version of “coverage all kids.”  It would eliminate any premiums for children in families earning less than 200% of the poverty level, it would eliminate the four-month waiting period for children under 200% of poverty and those coming out of corrections or foster care, and allows families above 275% of poverty to buy into MinnesotaCare at the full premium cost.  This bill was heard on January 28.  The Senate companion, SF 9 (Lourey), has not been scheduled for hearing.

Seat Belt Primary Offence Moves to Senate Floor
The bill to make failure of wearing seat belts a primary offence passed another hurdle in the Senate.  The bill, SF 42 (Murphy) passed the Senate Judiciary January 27.  It is now awaiting action on the Senate floor.  As expected, there has been very little opposition to the bill in the Senate; that is expected in the House.  The House bill, HF 108, has yet to be scheduled for a hearing.

Committee Deadlines Set
The Legislature has set a series of committee deadlines designed to keep bills moving and help them to ensure that bills move in a timely manner.  This year they have adopted six deadlines, as opposed to three deadlines in the past.

The first deadline is March 27 when all bills must be passed through all policy committees in one body or the other.  The second deadline is April 7 when all bills must be passed through all policy committees in both bodies.  The third deadline is April 15 when the different finance divisions must be done with their omnibus spending and tax bills. 

The three new deadlines include April 22 when all the omnibus spending and tax bills must be on the floor; May 7 when all omnibus conference committees must be done, and May 12 when all omnibus bills will be delivered to the Governor for his signature or veto.

House Introductions

Emmer introduced:

H. F. 0171, A bill for an act relating to health; proposing an amendment to the Minnesota Constitution, article XIII, by adding a section; providing for freedom of choice in health care.

The bill was read for the first time and referred to the Committee on Health Care and Human Services Policy and Oversight.

Thissen; Kelliher; Murphy, E.; Huntley; Liebling; Hornstein and Fritz introduced:

H. F. 0174, A bill for an act relating to human services; creating the Minnesota health security account; establishing the Minnesota health security program; specifying eligibility criteria, covered services, and administrative procedures; requiring a report on program expansion and service delivery; ensuring access to health care for all adults; appropriating money; proposing coding for new law in Minnesota Statutes, chapter 16A; proposing coding for new law as Minnesota Statutes, chapter 256N.

The bill was read for the first time and referred to the Committee on Health Care and Human Services Policy and Oversight.

Thissen; Norton; Fritz; Murphy, E., and Abeler introduced:

H. F. 0177, A bill for an act relating to health; extending moratorium on radiation therapy facility construction in certain counties; amending Minnesota Statutes 2008, section 144.5509.

The bill was read for the first time and referred to the Committee on Health Care and Human Services Policy and Oversight.

Slawik introduced:

H. F. 0210, A bill for an act relating to autism spectrum disorders; establishing a pilot program; establishing an Autism Spectrum Disorder Task Force; establishing a surveillance system and registry; requiring reports.

The bill was read for the first time and referred to the Committee on Health Care and Human Services Policy and Oversight.

Slawik, Norton and Murphy, E. introduced:

H. F. 0234, A bill for an act relating to insurance; requiring coverage for autism spectrum disorders; proposing coding for new law in Minnesota Statutes, chapter 62A.

The bill was read for the first time and referred to the Committee on Health Care and Human Services Policy and Oversight.

Norton, Emmer and Murphy, E. introduced:

H. F. 0240, A bill for an act relating to occupations and professions; creating licensure for physician assistants; amending Minnesota Statutes 2008, sections 144.1501, subdivision 1; 144E.001, subdivisions 3a, 9c; 147.09; 147A.01; 147A.02; 147A.03; 147A.04; 147A.05; 147A.06; 147A.07; 147A.08; 147A.09; 147A.11; 147A.13; 147A.16; 147A.18; 147A.19; 147A.20; 147A.21; 147A.23; 147A.24; 147A.26; 147A.27; 169.345, subdivision 2; 253B.02, subdivision 7; 253B.05, subdivision 2; 256B.0625, subdivision 28a; 256B.0751, subdivision 1; repealing Minnesota Statutes 2008, section 147A.22.

The bill was read for the first time and referred to the Committee on Health Care and Human Services Policy and Oversight.

Howes, Emmer, Hackbarth, Solberg and Rukavina introduced:

H. F. 0257, A bill for an act relating to health; permitting smoking in certain bars; amending Minnesota Statutes 2008, section 144.4167, by adding a subdivision.

The bill was read for the first time and referred to the Committee on Health Care and Human Services Policy and Oversight.

Hortman, Cornish, Hornstein, Lieder, Morrow, Winkler and Newton introduced:

H. F. 0267, A bill for an act relating to traffic regulations; requiring restraint of child under age eight and shorter than four feet nine inches while passenger in motor vehicle; amending Minnesota Statutes 2008, section 169.685, subdivision 5.

The bill was read for the first time and referred to the Transportation and Transit Policy and Oversight Division.

Rukavina; Buesgens; Huntley; Lillie; Hackbarth; Murphy, E.; Hornstein; Thao; Carlson; Mahoney; Gunther; Hilty; Eken; Morgan; Clark; Kahn; Haws; Johnson; Hausman; Sertich; Mariani; Hayden; Paymar; Hansen; Juhnke; Loeffler and Slocum introduced:

H. F. 0292, A bill for an act relating to health; providing for the medical use of marijuana; providing civil and criminal penalties; appropriating money; amending Minnesota Statutes 2008, section 13.3806, by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 152.

The bill was read for the first time and referred to the Committee on Health Care and Human Services Policy and Oversight.

Ruud and Norton introduced:

H. F. 0293, A bill for an act relating to health; providing colorectal cancer screening for the uninsured; appropriating money.

The bill was read for the first time and referred to the Committee on Health Care and Human Services Policy and Oversight.

Norton; Slawik; Abeler; Hosch; Murphy, E.; Thissen and Kahn introduced:

H. F. 0359, A bill for an act relating to insurance; requiring coverage for autism spectrum disorders; proposing coding for new law in Minnesota Statutes, chapter 62A.

The bill was read for the first time and referred to the Committee on Health Care and Human Services Policy and Oversight.

Slawik; Murphy, E.; Loeffler; Hornstein; Kelly; Clark; Hausman; Greiling; Paymar; Hayden; Liebling and Ruud introduced:

H. F. 0379, A bill for an act relating to health; prohibiting smoking in vehicle with children; proposing coding for new law in Minnesota Statutes, chapter 169.

The bill was read for the first time and referred to the Committee on Health Care and Human Services Policy and Oversight.

Thissen, Rukavina, Abeler, Hosch and Murphy, E. introduced:

H. F. 0384, A bill for an act relating to health; developing technology standards and tools to exchange information electronically between groups; requiring assignment of benefits for health and medical savings accounts; amending Minnesota Statutes 2008, section 62J.60, by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 62J.

The bill was read for the first time and referred to the Committee on Health Care and Human Services Policy and Oversight.

Senate Introductions

Senators Higgins, Marty, Doll, Erickson Ropes and Koering introduced:

S.F. No. 230: A bill for an act relating to occupations and professions; creating licensure for physician assistants; amending Minnesota Statutes 2008, sections 144.1501, subdivision 1; 144E.001, subdivisions 3a, 9c; 147.09; 147A.01; 147A.02; 147A.03; 147A.04; 147A.05; 147A.06; 147A.07; 147A.08; 147A.09; 147A.11; 147A.13; 147A.16; 147A.18; 147A.19; 147A.20; 147A.21; 147A.23; 147A.24; 147A.26; 147A.27; 169.345, subdivision 2; 253B.02, subdivision 7; 253B.05, subdivision 2; 256B.0625, subdivision 28a; 256B.0751, subdivision 1; repealing Minnesota Statutes 2008, section 147A.22.

Referred to the Committee on Health, Housing and Family Security.

Senator Berglin introduced:

S.F. No. 237S.F. No. 245: A bill for an act relating to insurance; providing equal access to acupuncture and a memorial to Edith R. Davis, Minnesota’s pioneer acupuncturist; requiring equal access to acupuncture services by certain group policies and subscriber contracts; requiring claim determinations regarding acupuncture services to be made or reviewed by acupuncture practitioners; requiring reporting on referrals to acupuncture practitioners and reimbursement rates; amending Minnesota Statutes 2008, section 62A.15, subdivision 4, by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapter 62D.

Referred to the Committee on Health, Housing and Family Security.

Senators Koch, Day, Tomassoni and Vandeveer introduced:

S.F. No. 270: A bill for an act relating to health; permitting smoking in certain bars; amending Minnesota Statutes 2008, section 144.4167, by adding a subdivision.

Referred to the Committee on Health, Housing and Family Security.

Senators Marty and Rummel introduced:

S.F. No. 273: A bill for an act relating to public health; preventing sexually transmitted infections and teen pregnancy; studying the prevalence of sexually transmitted infections and the cost to the health care system resulting from them; creating a responsible family life and sexuality education program; appropriating money; proposing coding for new law in Minnesota Statutes, chapter 121A; repealing Minnesota Statutes 2008, section 121A.23.

Referred to the Committee on Health, Housing and Family Security.

Senator Wiger introduced:

S.F. No. 290: A bill for an act relating to autism spectrum disorders; establishing a pilot program; establishing an Autism Spectrum Disorder Task Force; establishing a surveillance system and registry; requiring reports.

Referred to the Committee on Health, Housing and Family Security.

Senators Scheid, Sparks, Metzen, Senjem and Higgins introduced:

S.F. No. 312: A bill for an act relating to insurance; requiring coverage for autism spectrum disorders; proposing coding for new law in Minnesota Statutes, chapter 62A.

Referred to the Committee on Commerce and Consumer Protection.

Senators Koch, Hann, Gerlach, Ingebrigtsen and Vandeveer introduced:

S.F. No. 325: A bill for an act relating to health; proposing an amendment to the Minnesota Constitution, article XIII, by adding a section; providing for freedom of choice in health care.

Referred to the Committee on Health, Housing and Family Security.

Senator Kubly introduced:

S.F. No. 329: A bill for an act relating to health; providing funding for a rural health care purchasing alliance; appropriating money.

Referred to the Committee on Finance.

Senator Kubly introduced:

S.F. No. 330: A bill for an act relating to human services; offering supplemental hospital coverage under the MinnesotaCare program; amending Minnesota Statutes 2008, sections 256L.03, subdivisions 3, 5, by adding a subdivision; 256L.12, subdivision 6.

Referred to the Committee on Health, Housing and Family Security.

Senators Bonoff, Metzen, Sparks and Marty introduced:

S.F. No. 347: A bill for an act relating to health; waiving the four-month waiting period for unemployed persons for MinnesotaCare; appropriating money; amending Minnesota Statutes 2008, section 256L.07, by adding a subdivision.

Referred to the Committee on Health, Housing and Family Security.

- Dave Renner, MAFP Legislative Representative
(drenner@mnmed.org, 612-362-3750, 1-800-342-5662)