Health and human services budget has mixed impacts on community

When the 2011 Minnesota Legislature’s special session adjourned July 20, Minnesotans with disabilities and their families faced a dizzying array […]

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When the 2011 Minnesota Legislature’s special session adjourned July 20, Minnesotans with disabilities and their families faced a dizzying array of changes in the adopted health and human legislation and budget. For the short term, many people will see cuts to services or changes in how services are delivered. Over the long term, Minnesotans can expect changes in how many forms of health care are delivered. Gov. Mark Dayton and legislators have pledged health care reform and how that actually happens will play out over the next several months. Some reforms will require permission from the federal government, which could be a long process.

The more immediate impacts will center on a health care system that won’t have the projected amount of funding needed. While health and human service spending will show some growth, from $10.2 billion last biennium to $11.4 billion this biennium, that’s about $1 billion less than the actual need projected by the Minnesota Department of Human Services (DHS). And because the approved state budget relies on borrowing and not revenue increases, the state’s deficit picture may only get bleaker. That’s especially true if the economy doesn’t turn.

Many advocates contend that the full impacts of the 2011 health and human services budget may not be fully understood for months to come, but that the impacts will be felt for years. At this point it appears to be very much a mixed bag. For some programs and services, the cuts were less than anticipated. Others face serious constraints. The special session ended Minnesota’s longest state government shutdown in history. The shutdown began July 1 when Dayton and legislators couldn’t agree on a budget. Many people with disabilities were greatly affected by the shutdown, losing access to services ranging from workplace interpreters to the ability to do background checks on health care workers. For much of July the two sides battled over how to address the state’s budget issues. Dayton ultimately gave up on his push for increased taxes on the state’s wealthiest residents as the state shutdown dragged on. He said the pain of the shutdown was becoming too great for Minnesotans.

One major cut that families will feel, with an impact of $26.3 million over two years, is the mandatory enrollment of children and adults with disabilities into managed care, technically called Special Needs Basic Care (SNBC), with an option to opt out. While the disability advocacy community supports increased care coordination for individuals with disabilities, one concern advocates have raised is that there was little to no discussion of this very significant policy change during the legislative session.

It will be more difficult for some low-income, ill or disabled adults to receive General Assistance, the state’s cash assistance program for people who cannot work, under the approved state budget. More than 7,000 adults will be moved off of the state health insurance program MinnesotaCare and instead given vouchers to buy private insurance. While some Republican leaders contend this will provide better services and more choices, disability community advocates are skeptical.

One bright spot was that the Family Support Grant was not cut, despite a threat to cut $4 million during the regular legislative session. Families who receive these grants can pay for added expenses that are directly related to their child’s disability. The grant covers expenses for medications, respite care, specialized diets, specialized clothing, and specialized equipment.

Physical therapy, occupational therapy, speech therapy, eyeglasses, dentures, and prosthetics were also spared, despite earlier threats to be cut. One service that did lose funding is “specialized maintenance therapies.” Instead these therapies will be studied for cost effectiveness.

At a press conference prior to the special session’s start Rep. Jim Abeler, R-Anoka, said the agreed-upon budget represented a compromise. He chairs the House Health and Human Services Finance committee. While conceding that the budget will have impacts, Abeler also cited the challenges of trying to provide services in the face of growing demand. Abeler also emphasized that the adopted budget does minimize cuts to services for Minnesotans with disabilities.

But advocates, including leaders of the Minnesota Consortium for Citizens with Disabilities (MN-CCD) disagree. During the regular session, Republican lawmakers said the budget needed to be cut by $1.6 billion. But the deal struck last month raises another $1.4 billion in revenue, of which $559 million went to DHS programs.

Abeler said the money staved off more drastic reductions to programs. Much of it went to fund the state’s ongoing enrollment into the expanded Medical Assistance program. However, this funding was criticized because it relies on borrowing against future payments from a legal settlement with tobacco companies and delaying payments to schools.

Many service providers have already warned clients and families about the challenges ahead.

“There are so many cuts to people with disabilities in the health and human services bill that you don’t know which bad news to deliver first,” Steve Larson, The Arc Minnesota public policy director, said in a statement. “People with disabilities get hit from all sides. If they are waiting for essential services, that wait will likely continue. If they are receiving services, they will see a funding cut. If their family member is paid to provide support to them, that family member will get his/her wages cut.”

Pat Mellenthin, chief executive officer for The Arc Minnesota, called it a “bad news budget for people with disabilities.” Mellenthin said “The budget that was just approved cuts services that make life possible for people with disabilities and their families, makes reforms in some areas but goes backwards in others, and puts much of the cost on the state credit card,”

Association of Residential Resources in Minnesota ARRM CEO, Bruce Nelson called the budget package “deplorable.” He said that while provider cuts were anticipated, some were deeper than anticipated. ARRM is especially unhappy that budget negotiations took place behind closed doors. While ARRM believes the disability system must be reformed, the association was hoping to work cooperatively instead of being coerced. “This does nothing to reform regulations,” Nelson said.

Here is a by topic overview of key health and human services budget changes adopted during the special session:

Personal Care Attendant (PCA) services:

Personal care attendant (PCA) services will be greatly impacted, if family members provide care for a relative. The HHS budget contains a 20% wage cut for these PCAs. For example, this would apply to someone who provides PCA services to a child with disabilities that he or she is related to and is not that child’s parent. The adopted legislation language defines who would be affected: “…relative means the parent or adoptive parent of an adult child, a sibling aged 16 years or older, an adult child, a grandparent, or a grandchild.” This provision amounts to a $24.1 million cut over two years. The 20 percent wage cut will create financial hardships for families, as well as a disincentive for family members to continue to work as PCAs, according to MN-CCD.

The 20% wage cut would be especially hard on rural Minnesotans, according to MN-CCD, the Arc Minnesota and other advocacy groups. That’s because in rural areas, where agency choices can be very limited, having a relative provide PCA services is sometimes the only option for families. Nonrelative PCAs can travel many uncompensated miles to reach the individual or family, and many individuals needing PCAs require assistance off and on throughout the day, not during an extended block of time.

For some Minnesotans, the 2011 budget restored a PCA hours cut that was to take effect July 1, as a result of service eligibility changes adopted last year. These services have been restored.


Waivered services:

Initial versions of health and human services legislation adopted by state lawmakers in May contained a freeze and rollback of waivered services. This was in the bill vetoed by Dayton. The freeze and rollback weren’t in the adopted legislation. It does reduce the number of new waivers that would have been available under previous law.

The number of new waivers available will be: six per month for the developmental disabilities (DD) waiver; three per month for the traumatic brain injury (TBI) waiver; and 60 per month for the Community Alternatives for Disabled Individuals (CADI) waiver.

In terms of dollars this adds up to a $48.1 million cut over two years. The limits won’t take effect in situations where an ICF/MR (Intermediate Care Facility/Mentally Retarded) program closes or nursing home beds are eliminated.


Medicaid/Medical Assistance:

Medicaid or Medical Assistance will be expanded to include adults with very low incomes. This expansion improves access to health care to 100,000 Minnesotans, many of whom have disabilities.

Reviving the previous program, General Assistance Medical Care (GAMC) program, as the legislature proposed, would have resulted in few hospitals providing health care to this population, as well as less generous health care benefits than what would be available under the Medicaid expansion. But there is also a cut in rates for a variety of community-based services funded by Medical Assistance.

The cuts work out to be a 1.5% cut for 2012 and a 1.67% cut for 2013. This provision amounts to a $36 million cut over two years, with ICF/MRs receiving a lower rate cut of $2.23 million over two years.



Minnesota’s counties, which provide services to state residents with disabilities are continuing to sort out the HHS budget impacts. Most counties are releasing their budgets this month, with an eye toward trying to preserve mandated services without increasing residents’ property taxes.

Counties could be in the position of cutting or even eliminating grants to some service providers for people with disabilities. One two-year, $4.48 million cut in funding to counties will affect programs that that normally covers expenses for unexpected increases in needs for their residents with disabilities. This affects persons who receive waivered services.

This means that if a client’s needs for service increase counties will have to find other ways to pay for those needs. A $22 million cut over two years will affect counties ability to help pay for, among other services, supports to people with disabilities and their families like respite care.

That will also have a ripple effect on some county budgets. Minnesota counties are just starting their 2012 budget hearings this month, so more on county-by-county impacts will be seen in the weeks ahead.


Group homes and foster homes:

Not long after the special session ended, advocates said they were blindsided to see new policies for group homes tucked into the health and human services budget bill. Those policies, like many others, hadn’t been aired prior to the special session.

Group home operators and families whose loved ones live in group homes were surprised to find new policies for group homes included in the state budget. The adopted budget was seen as cutting the number of licensed beds at privately-owned group homes for adults with disabilities across Minnesota. Providers and advocates assumed the new provision applied to all adult group homes. Some families received letters warning that group homes could be forced to close down.

Providers were interpreting the legislation to mean that once someone moved out of a group home, licensure for that spot would be lost and a new person couldn’t move in to take that spot. But DHS has since clarified the language. It applies only to about 2 percent of people who are approved to live in group homes due to a disability or a traumatic brain injury. For those individuals, if they are able to live independently, the group home would lose the license for the vacant bed.


Information from MNCCD, The Arc Minnesota and ARRM was used in this article.


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