Little detail on gov. candidates' plans for health spending

North County Regional Hospital
Bemidji's North Country Regional Hospital and neighboring Sandford Health Meritcare Clinic.
MPR Photo/Tom Robertson

In tackling a projected $5.8 billion budget deficit, Minnesota's next governor will have to make big decisions about the state Department of Human Services.

In the next two-year budget cycle, the department's spending is projected to climb to from $9 billion to $12 billion. Its budget, which covers health care, nursing homes and other safety-net programs, will eat up more than a third of the state's budget.

The candidates' details on the human services budget are scarce. But their comments thus far show they have distinctly different visions for the agency.

Republican nominee Tom Emmer says the state can't afford $3 billion in additional spending. He proposes limiting the increase to $650 million.

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While Emmer's idea sounds like more money for the agency, it would actually result in huge cuts because high demand for human services programs is driving up the cost to taxpayers.

When asked in a debate near Brainerd last month if there were any human services cuts that he considered off the table, Emmer said children and seniors should be a priority. But he made no promises.

"It needs to be said this way. If I were governor, those would be the priorities that should not be cut," Emmer said. "But we have put a specific number on the table and understand that you have to work through the Legislative process."

Emmer's plan to not fully fund the agency's budget would be the equivalent of eliminating the entire MinnesotaCare insurance program. Although Emmer hasn't proposed that, he wants to eventually drop the provider tax that pays for the program and give recipients vouchers to purchase private insurance. He also wants to give tax deductions to doctors who provide charity care.

Democratic nominee Mark Dayton has not released his plan for Human Services spending. He declined MPR's request for an interview and said through a spokeswoman that if elected he will make decisions about the Department of Human Services budget next year.

However, Dayton is on record saying that he would restore funding for nursing homes. He also wants to expand public health coverage, and has long supported a government-run, single payer system.

During the same debate last month, Dayton said he would gladly accept Minnesota's early enrollment in the expanded Medicaid program allowed under the federal health care overhaul.

Gov. Tim Pawlenty has rejected the option, which he said would cost the state $430 million but bring in $1.4 billion in federal dollars. The next governor has until Jan. 15 to accept or decline the federal offer.

Dayton said the program would help rural hospitals.

"For the next three years that means $3.7 million of additional funding for St. Joseph's Hospital in Brainerd [and] almost $6 million for the hospital in Bemidji," he said.

Emmer said he would not accept the federal money. Independence Party nominee Tom Horner said he would accept it.

Horner's budget plan for the Department of Human Services would fully fund the agency and provide an additional $400 million to pay for some policy changes. However, he favors paying for health outcomes, not procedures. Horner also said he would coordinate care among different providers for expensive chronic conditions and overhaul public health programs without eliminating coverage for vulnerable people.

Minnesota has experimented with many of these concepts already. But Horner said the reforms often fall victim to budget-cutting.

"It is not just booking phony savings," Horner said. "It is saying 'look, when you just transfer the cost, that doesn't save the cost. It just changes who is paying for it. That's not a savings.' Here are real savings. Here's what we need to do to fundamentally change how we're delivering services."

The human services budget has not been the top issue for voters during the campaign season. But the agency's spending will loom large for the next governor. In a few more years, human services programs will eclipse education as the largest portion of the state budget.