By David King, CEO, Minnesota Brain Injury Alliance
Minnesota’s divided government experience continues in 2019 with a fresh make-up in the Minnesota House and a new governor. The 2019 legislative session is a budget-setting session, where comprehensive decisions for the next two-year budget cycle will be hashed out. No one knows if they will find some quick bipartisan fixes, but one thing is for sure — policymakers will need to determine the fate of Minnesota’s necessary and important Health Care Access Fund.
Looming over this next legislative session is the elimination of the provider tax which pays for affordable health care for Minnesotans from Warroad to Winona. This 2 percent provider tax, set to sunset at the end of 2019, was created in 1992 to fund the Health Care Access Fund which in turn paid for MinnesotaCare. A pioneering idea at the time, there is now only one state in the nation that does not have some type of provider tax to fund affordable health care.
Twenty-six years ago, this bipartisan health care reform package helped more Minnesotans gain access to affordable health care coverage. It works by having health care providers, hospitals, surgical centers, and wholesale drug distributors pay 2 percent of their revenue into the Health Care Access Fund. Part of this agreement also increased the reimbursement rate for these providers when they treat people through MinnesotaCare or Medical Assistance.
While the provider tax is not the only source of funding for the Health Care Access Fund, it is by far the largest portion. Without the provider tax, the fund will be significantly reduced and could become obsolete. The Health Care Access Fund currently allows more than one million Minnesotans see doctors, get their medications, and receive treatments and other critical health supports. Working Minnesotans who do not have access to affordable employer-backed insurance options, as well as seniors and folks with disabilities, are some of the people who would be harmed if the provider tax is allowed to sunset.
Nearly 50 percent of the Health Care Access Fund pays for Medicaid in Minnesota. People with brain injuries who receive care through the Medicaid expansion could also be negatively impacted by the sunset of the provider tax. These people are generally able to work, and don’t face the restrictions on Medical Assistance that keep many Minnesotans with disabilities in poverty. Threats to Medicaid expansion could force more Minnesotans back into these restrictions that send people into a cycle of poverty just to get the health care they need.
The fund has also been used to stabilize the individual market through Minnesota’s reinsurance program. This $401 million investment was made with the federal government signaling their intent to fund a portion of that program. However, in December, the federal Center for Medicare and Medicaid Services indicated that it would actually be reducing that funding by $99.1 million. With federal cuts to reinsurance and an aging population that will be more dependent on Medicaid, Minnesota cannot afford to lose essential tools to provide affordable health care to Minnesotans.
Should lawmakers allow the provider tax to expire without a replacement, Minnesota will lose $700 million in revenue. Health care for Minnesotans previously funded through the fund will likely be covered by general funding for the state budget, putting pressure on other important investments that Minnesotans value, such as K-12 education, housing assistance, transit, and transportation.
Given that no strong alternatives have been proposed in the seven years since the provider tax sunset was put in place, lawmakers should repeal the sunset on the provider tax this session. It has been a time-tested, bipartisan way to fund necessary health care for Minnesotans across the state.
We’ll be working this legislative session with other advocates throughout the state and with the This Is Medicaid coalition to be sure essential and affordable health care remains a top priority in Minnesota.
