What could Congress’ changes to Medicaid, food stamps mean for Minnesota?

Congressional committees overseeing Medicaid and food stamps took up legislation this week to cut the federal government’s social safety net while making tax cuts.

House Republicans say the changes will stimulate the private sector and help working people help themselves. But many in Minnesota — including medical providers, local government officials and advocates for seniors, children and people with disabilities — warn that the plans will hurt those in need and damage local economies.

“It actually pushes families to the brink of financial ruin. ... We know that when families break down, communities suffer through higher health care costs, lost productivity. There’s a greater strain on public systems for generations to come,” Minnesota Department of Children, Youth, and Families Commissioner Tikki Brown said Thursday at the Open Door food pantry in Eagan, where the state held the latest in a series of events condemning federal cuts.

Benefit program reductions are key to fund President Donald Trump’s vision of tax breaks, spending cuts and increased border security and deportations. The narrowly divided U.S. House aims to vote on its package before Memorial Day.

But a handful of Republicans on the House Budget Committee joined Democrats on Friday in voting against the package, pausing its progress. One of the conservatives’ key concerns is that they want new Medicaid work requirements to start earlier than 2029.

What will make it into the final agreement — and through the Senate — remains to be seen.

The proposed Medicaid changes would lead to at least 8.6 million people losing insurance, and mean $715 billion less spent over the next decade, the Congressional Budget Office estimated. However, the federal deficit is still expected to rise substantially during that period due to the tax cuts in the bill.

Rather than seeking preventive care and early treatment, he predicted, people who don’t have insurance will show up at hospitals with expensive emergencies, and the demand for uncompensated care could force hospitals to close and force higher expenses on those with insurance.

“This proposal is an attack on our ability to maintain health insurance coverage for Minnesotans,” Connolly, the state‘s Medicaid director, said in a statement. “Over $700 billion in cuts to Medicaid nationally will have a big impact here at home. It will make Minnesotans sicker and cost everyone more in the long run.”

Medicaid covers about 1.2 million people in Minnesota, roughly 20% of state residents. About 42% of those enrolled in the program here are children, although kids and parents make up a relatively small portion of spending. The bulk of the dollars go to services for Minnesotans with disabilities and those 65 and older, according to DHS data.

Lawmakers left out some ideas that faced pushback from more moderate Republicans, including per person caps and broad cuts to a federal matching rate for states that adopted Affordable Care Act coverage expansion, which would have led to substantial funding losses in Minnesota and other states.

Other changes, from work requirements to funding cuts for states that cover undocumented immigrants, were included. States would also need to check eligibility every six months for adults covered through the Medicaid expansion, instead of once a year.

Medicaid recipients would have to meet new “community engagement requirements” of at least 80 hours per month of work or community service, or be enrolled part-time in an educational program, unless they qualify for certain exemptions.

While people with disabilities may be exempt, they could still be affected, said Sumukha Terakanambi, a public policy consultant who has Duchenne muscular dystrophy and uses a Medicaid-funded waiver for services. He said additional red tape and compliance checks will add to state administrative costs, potentially shifting funding away from services, and leave qualified recipients struggling to access health care.

“A lot of people will lose health insurance because of all of these onerous requirements,” he said.

Added work requirements would create large administrative burdens for counties, said Crystal Zaviska, who supervises Pope and Grant county workers who check people’s Medicaid and SNAP eligibility. She questioned how much money the changes would save, noting that the majority of Medicaid recipients in her community already work, including cooks, machinists and bus drivers.

Arkansas was the first state to add Medicaid work or community engagement requirements in June 2018, but a federal judge put the policy on hold in April 2019. A study found 18,000 adults lost coverage and there was not a significant change in employment.

“Adults on SNAP are already working or required to be looking for work,” said Minnesota Rep. Angie Craig, the Agriculture Committee‘s ranking Democrat.

Seniors won’t be affected by the legislation, said Rep. Dusty Johnson, the South Dakota Republican who has championed the requirements.

“Some people have chosen to fear-monger,” he said, “[But] your benefits are not being affected.”

Undocumented immigrants are not eligible for Medicaid, but Minnesota is one of 14 states using other funds to provide coverage to people regardless of immigration status, according to the Kaiser Family Foundation. The bill would reduce federal matching funds to such states, pressuring them to discontinue the practice.

Minnesota opened enrollment in its MinnesotaCare program, which is separate from Medicaid, to undocumented people in January. On Thursday, Minnesota leaders struck an state budget deal that would roll back health care for undocumented adults, but leave coverage for children.

“What they’re finding is the expansion into areas that Medicaid was never intended for,“ GOP Rep. Pete Stauber said at a town hall in March. ”Medicaid was intended for pregnant women, elderly, disabled and the poor. No longer ... will a 27-year-old, abled adult with no dependents be able to stay on Medicaid without some work requirements.“

Minnesota law requires the state‘s Medicaid program, called Medical Assistance, to cover gender-affirming care for transgender people. The legislation would block federal funding of such services for minors.

It would also halt money for certain health care providers offering abortion services. Planned Parenthood officials said the bill defunds their organization, and noted more than 30% of their patients in some Midwest states, including Minnesota, relied on Medicaid last year.

“Defunding Planned Parenthood keeps patients from getting the care they need — care like birth control, cancer screenings, and wellness exams,” Planned Parenthood North Central States President and CEO Ruth Richardson said in a statement.

The tax bill would close a loophole used by many states to fund Medicaid by taxing hospital systems and returning funds through an increased federal match.

“Medicaid was created mainly for children,” said Barbara Joers, president and CEO of Gillette Children’s, the St. Paul-based specialty hospital and clinic system. “And a high percentage of our families qualify for Medicaid.”

Joers, who was on Capitol Hill this week, said the bill moving through Congress would send less money to Minnesota and, ultimately, to each of its 87 counties. Minnesotans, she said, often don’t even know they’re receiving care through Medicaid.

The federal government would no longer cover 100% of SNAP benefits under a state matching fund requirement in the agriculture bill.

States would take on at least 5% of the cost and up to 25% based on a “state quality control incentive” that bumps up the percentage for states with higher rates of underpayments and overpayments. The proposal would also increase states’ responsibility for SNAP administrative costs, from half to 75%.

Minnesota would face more than $200 million in new costs annually as a result of the changes, state officials estimated.

“It’s a way for the federal government to put a big cut on this program but not say that it’s cut,” she said. “It will leave states with the impossible situation of trying to figure out how to fill in these gaps.”