Under the governor's plan 84,000 adults will lose their state-subsidized health coverage. These people are primarily enrolled in MinnesotaCare. The governor also cuts millions of dollars in payments to hospitals and long-term care providers and eliminates dental coverage for all but pregnant women and children. The cuts are difficult, but the agency cannot keep up with the demand for its programs, according to Cal Ludeman, commissioner of the Minnesota Department of Human Services.
"This is a deeper recession and a deeper effect on human services than we've ever experienced before. The demand is going higher and we know that. But our capacity to be able to deliver those services has to get very focused, very focused on the true safety net for the most vulnerable Minnesotans."
Even with the cuts, Ludeman projects the number of people with some sort of state-supported medical care will grow by 30,000 over the next two years. Right now enrolment stands at 670,000. It's projected to grow to 700,000 by 2010.
Critics say the governor's health care cuts will just make the state's economic crisis even worse.
Many of the 84,000 people who will lose their state-sponsored health coverage don't earn enough money to be able to afford replacement policies in the private market, according to Rep. Paul Thissen, DFL-Minneapolis, a member of the Health Care and Human Services Finance Division Committee.
"He is essentially eliminating health coverage for working Minnesotans. And I think that is really breaking a commitment we've had in this state for a long time and one we should sustain."
Without coverage, many people will let their medical conditions worsen until they're so sick they have to go to hospital emergency rooms for care, Thissen says.
Hospitals say they can't afford to pick up the cost of uninsured patients when their revenues are already down due to the bad economy. They also take a hit under the Pawlenty plan. He wants to cut 3 percent from the payments hospitals receive for caring for patients on public programs.
Hospitals see this as a real hit, says Lawrence Massa is President of the Minnesota Hospital Association.
"This could be a devastating blow for a number of our hospitals. And it certainly will not be uniform. Over 2000 hospital positions have been eliminated in the Twin Cities area and the Duluth area over the last six months. These cuts would probably lead to more layoffs, potentially services being curtailed or dropped altogether."
Long-term care providers also take a 3 percent rate hit in the governor's budget. Patti Cullen, President and CEO of Care Providers of Minnesota, says she can only draw one conclusion after reading the Governor's budget plan.
"Don't be poor and old unless you have loved ones to take care of you," she said.
Nursing homes are not included in the 3 percent rate reduction. But Cullens says the governor's proposal reduces their base budget by 1.3 percent over the next two years and by 5 percent after that. The plan also cuts the rates nursing homes can receive for patients in private rooms. The governor's plan to cut dental care will hit her clients especially hard, she says.
"For our population, especially the elderly, you're going to see people in the ER needing a root canal and becoming ill because they didn't have a bad tooth pulled."
But as painful as the governor's budget is for state health care spending, Cullen and others are optimistic that the situation might improve in the weeks ahead as Congress works to pass President Obama's stimulus package. The plan would increase federal support for Medicaid and it would invest billions of dollars in preventative care programs that make health care more efficient.
Gov. Pawlenty said he only budgeted for about $920 million in federal aid. The governor says he is hearing that the state could receive up to $3 billion. If the amount is that significant, he will revise his budget.