MINNEAPOLIS, January 27, 2009 - Gov. Tim Pawlenty proposed a two-year state budget Tuesday that would eliminate health care coverage for tens of thousands of Minnesotans, reduce physician safety-net payments by 3 percent, and eliminate the dedicated Health Care Access Fund – but not the sick tax.

Pawlenty said his budget proposal for 2010-2011 would slow the growth of human services spending and eliminate a $4.8 billion projected deficit.

Pawlenty proposed scaling back the Department of Human Services Budget, which was projected to grow 22 percent during the next biennium, to a 9 percent growth rate. The cut means that the department would not have enough money to meet the growing need for health care programs.

Pawlenty did not propose raising taxes but did propose a cut in the business tax rate that would cost about $287 million. He also proposed eliminating at least 84,000 people from state health care rolls, which  would save the state government about $573 million and increase the state’s uninsured population by about 20 percent.

House Minority Leader Marty Seifert (R-Marshall) praised the governor’s proposals and challenged the DFL to come up with their own solutions if they disagree with the governor.

DFL leaders plan to travel around the state getting input about the budget and aren’t expected to release a counter proposal until after the February forecast in March.

The MMA is calling on lawmakers to take a balanced approach and consider all sectors of the budget as well as the possibility of raising revenue. “The budget should not be balanced on the back of the sick and needy,” said MMA President Noel Peterson, M.D.

Some of Pawlenty’s proposed health care changes are as follows. The savings to the state government would occur in the 2010-2011 budget.

• Cut Medical Assistance and the General Assistance Medical Care program payment rates for basic services by 3 percent. (State savings: $96.3 million)
• Eliminate the Health Care Access Fund and transfer all provider tax revenues into the general fund. The provider tax rate would remain the same, despite the cuts to MinnesotaCare.
• Eliminate MinnesotaCare coverage for all parents and adults without children and the GAMC hospital only program. At least 84,000 people would  lose eligibility for state programs over the next two years. (State savings: $573.8 million)
• Capture $1 billion in revenue by issuing bonds paid for by ongoing tobacco settlement funds.
• Eliminate adult dental, podiatry, and rehabilitative services, including physical therapy, occupational therapy, speech-language pathology, and audiology services. (State savings: $47 million). Eliminate the critical access dental add-on under the MinnesotaCare and Medical Assistance programs. (State savings: $12.3 million)
• Reduce eligibility for Medical Assistance (Medicaid) to 100 percent of the federal poverty level, which is $10,830 for an individual and $14,570 for a couple.
• Rebase hospital rates, and the hospital inpatient quarterly payments under Medical Assistance. (State savings $57.7 million).
• Reduce public health funding in the 2008 Health Reform Act from $47 million over two years to $24 million over four years.

Tell lawmakers what you think about these proposed changes by attending the MMA’s Day at The Capitol, February 5. Sign up Now!