The GOP aims to cut $1.6 billion, partly by shifting thousands of people from state health plans to private ones.
The Minnesota Senate voted Wednesday to dramatically shrink government's role in providing health care for poor and disabled Minnesotans.
The far-reaching plan, approved 37-26, is the latest in a series of steps that the new Republican majority in the Legislature has taken this month in an effort to erase the state's projected $5.1 billion deficit without raising taxes.
It would slice millions of dollars from projected spending while cutting benefits and privatizing medical care for thousands of recipients. A companion bill is pending in the House, but both measures face a likely veto by DFL Gov. Mark Dayton.
Republicans said the overhaul would free Minnesota from restrictive federal rules that have stymied efforts to control the cost and growth of Medicaid through restructuring or limiting services and eligibility, said Sen. David Hann, R-Eden Prairie, the bill's chief sponsor.
"This bill is a significant reform in the way that public health care is carried out in Minnesota. ... a signal to the federal government to say, 'Stop. Get realistic,'" Hann said.
He noted the bill spends about $10.7 billion on health and human services in the next two years -- a cut from projected spending, but an increase of about $500 million from the last funding cycle.
It drew sharp rebukes from DFLers, however, as unrealistic, harmful and based on "a hope and a prayer" accounting.
Sen. Linda Berglin, DFL-Minneapolis, said the measure would hurt hospitals, nursing homes and other health care providers, "but will be devastating" for poor, sick and frail people, pushing more than 100,000 of them out of health care coverage by offering insurance they can't afford. She offered seven amendments for changes rejected by the Senate.
Republicans countered that, even though the spending cuts will hurt some recipients, they are needed to avert budgetary disaster. The bill would seek federal permission to set aside Medicaid rules so services and eligibility could be cut -- permission DFLers say is unlikely.
The bill would also:
•Criminalize human-cloning research, a provision that has alarmed some scientists at the University of Minnesota.
•End state grants for family planning.
•Impose new restrictions on a state Health Department program that screens newborn infants for diseases, a program that has drawn objections from some medical-privacy advocates.
•Require the Department of Human Services to study whether its programs promote healthy families.
•Stop the state from enacting the 2010 federal health care overhaul unless it is found constitutional and prohibit the federal government from requiring people to buy health insurance as required under that law.
Cutting $1.6 billion
To cut about $1.6 billion from projected spending for health and human services, the budget bill would save roughly $900 million by ending Medicaid coverage for about 100,000 childless adults and, starting Jan. 1, for all but those below 75 percent of poverty, offer vouchers to help buy private insurance.
Hann said the bill would treat people on Medicaid with respect by assuming they can "make good decisions for their own health care ... and expect them to act responsibly."
The Department of Human Services estimated that 86,000 people offered vouchers will not be able to afford to buy insurance.
Federal waivers are unlikely "because they would break federal law," Berglin said during the debate Wednesday. Other cuts in the bill would put the state out of compliance with federal rules and that could lead to loss of some federal money, she said.
In a half-facetious test of Republican resolve to rid the state of federal control, she offered an amendment that Minnesota forego all federal Medicaid money. It failed, with only five supporting votes.
Under the vouchers plan, all but the poorest recipients on Medicare and MinnesotaCare, the state-subsidized health plan for low-income working people, would get vouchers covering up to 90 percent of the monthly premiums for private coverage.
Co-pays, deductibles and services covered by the insurance would be set by the plan, not the state.
The bill also would end Medicaid coverage for about 100,000 very poor childless adults placed on Medicaid by Dayton March 1 under the federal Affordable Care Act, a law GOP legislators referred to as "Obamacare."
Instead, they would become eligible for a revived General Assistance Medical Care program in which hospitals that volunteer would be paid lump sums -- about half of what the state paid last year -- to provide their care. Two of the four hospitals that offered a similar program that ended March 1 have said they likely would not sign up.
The bill also would cut funding for the General Assistance program, which pays $203 a month to indigent people, and convert it into county block grants.
In addition, it would cut mental health services, end medical education grants to help train doctors, cut some payments to nursing homes and end more than $100 million in state health grants.
It also would phase out a law that allows nursing homes to charge more for the 30 percent of residents who pay their own way instead of relying on Medicaid, which covers about two-thirds of residents.
To read the bill, go to www.startribune.com/a281.
Warren Wolfe • 612-673-7253