With a historic state budget surplus of $17.5 billion for FY 2024-25 and a $5.4 billion structural balance for FY 2026-27, Governor Tim Walz, the House, and the Senate are all looking to invest in health care and other public services to better ensure a healthier, more secure future for Minnesotans.
The budget target agreed to by the governor and legislative leaders for Health and Human Services, the portion of the budget that includes health care, health insurance, economic assistance programs, and behavioral health is $1.6 billion (includes $875 million for children and families) in new general fund resources in FY 2024-25 and $1.4 billion in FY 2026-27. Members of the House and Senate are currently meeting in a conference committee to determine how to allocate these dollars for the state’s next two-year budget cycle.
There is real urgency for the state to act so that more Minnesotans can get the health care they need, when they need it. Too many Minnesotans still struggle without health coverage – in 2021, roughly 252,000 Minnesotans were uninsured. Troubling and unacceptable racial disparities in obtaining affordable health insurance and health care are very real, and contribute to worse health outcomes.
While there is basic agreement among the governor, the House, and the Senate on important steps forward, there will be more work needed in future years to ensure no Minnesotans fall through the cracks.
Strengthening affordable health care through Medicaid
More than 1 million Minnesotans have affordable health care coverage through Medicaid, also called Medical Assistance. The conference committee appears poised to take action to reduce out-of-pocket costs and prevent unnecessary disruptions in coverage through Medicaid.
All three budget plans would allocate $9.2 million in FY 2024-25 and $13 million in FY 2026-27 to eliminate cost sharing such as deductibles and co-payments to lessen the financial burden on these Minnesotans.
The governor, House, and Senate health care proposals also all include continuous eligibility provisions to extend the amount of time that children can have health care coverage through Medicaid. The proposals provide continuous eligibility for children under 21 for a period of 12 months, and children under 6 would stay eligible until they turn 6. This would build on successful efforts earlier in the pandemic to prevent unnecessary disruptions in health care coverage that can be caused by paperwork challenges or minor fluctuations in monthly income. Starting in March 2020, federal public health emergency provisions required states to protect health care coverage during the pandemic for folks covered through Medicaid. But these protections are coming to an end.
Prior to the pandemic, nationally approximately one in 10 Medicaid participants lost and then regained their coverage within one year. Of these, over 40 percent reenrolled within three months. This process is called “churn.”
Continuous Medicaid coverage reduces churn by ensuring that once determined eligible, people continue to receive health coverage for a period of time, and don’t lose eligibility due to paperwork errors or small income fluctuations. While continuous eligibility for children is a great first step that should be taken this year, policymakers should continue to work towards including adults as well so all Minnesotans can get the care they need to live full lives.
Expanding affordable health care coverage to those falling through the cracks
The governor, House, and Senate have proposed a MinnesotaCare “public option” through which Minnesotans who currently are above the income limits for MinnesotaCare could buy coverage, paying a sliding-scale premium based on their income.
MinnesotaCare is Minnesota’s premium-based affordable public health insurance option for people who do not have affordable health insurance, but make too much to qualify for Medicaid. These include people who do not receive affordable insurance through their employer or are self-employed, and can’t afford what is available in the private market. MinnesotaCare is vital to filling this gap, and expanding it through a public option would be a big step in ensuring that more Minnesotans have affordable health insurance.
Those who would be able to enroll in MinnesotaCare through the public option are individuals and families earning above the current income limits (200 percent of the federal poverty guideline, which for example is $55,500 annually for a family of four).
The conference committee is also considering important provisions to expand affordable health care coverage to undocumented Minnesotans. The House’s proposal would expand MinnesotaCare eligibility to all undocumented Minnesotans. This would help strengthen Minnesota’s workforce, reduce reliance on costly emergency room visits, and create overall healthier communities. In comparison, the Senate’s plan and governor’s recommendations would expand coverage to undocumented children only.
While covering children would be a positive step forward, it’s time to close this disparity and expand coverage to all undocumented folks, regardless of age. In Minnesota, undocumented immigrants are often not able to access consistent, affordable health care, including preventative care or care for chronic conditions. Many work in jobs that don’t provide health insurance, and they don’t qualify for public health programs like Medicare, Medicaid, or MinnesotaCare. As of 2019, an estimated 45 percent of the Minnesota’s undocumented population were uninsured – significantly higher than the uninsurance rate for the state overall.
It is the job of the Health and Human Services conference committee to make budget decisions that will make a difference for Minnesotans’ health, and those decisions are likely being finalized this week. While the conference committee is hashing out the specifics, we can likely say the final budget will make important investments that secure expanded access to health care and ensure a better, healthier future for many.