Minnesota Lawyer
Rep. Tom Huntley (Photo: Peter Bartz-Gallagher)
On Monday morning, House Health Care and Human Services Budget Division chair Tom Huntley stood before the Capitol press corps with a grin on his face and seemed to suggest that $330 million was going to fall from the sky to solve the state’s long impasse over health care for the poor and indigent. That was the figure that Huntley, DFL-Duluth, touted as Minnesota’s FY2011 share of new federal health care dollars that could be deployed to serve former recipients of General Assistance Medical Care (GAMC).
A day later, Pawlenty administration deputy chief of staff Brian McClung sent around figures from the Minnesota Department of Management and Budget indicating that the net FY11 benefit from the federal health care overhaul was a mere $14 million, and that commitments attached to the federal reforms would add another $881 million in deficits for the upcoming 2012-13 biennium.
Welcome to the Capitol’s latest version of who understands this damn thing?
As legislators and agency staffers learned from the lessons of the 2009 federal stimulus bill — or should have learned — any new package of federal funds represents a puzzle that state officials and their fiscal analysts will spend weeks, or months, trying to fathom with the help of federal agency personnel, who are themselves endeavoring to master the details of what Congress has wrought.
So it will be some time before anyone at the Capitol complex can claim an authoritative grasp of what the new federal laws mean for Minnesota’s near- and long-term general fund budget troubles. But in the meantime, legislative fiscal analysts suggest the truth is different from both Huntley’s initial claims and those of MMB and the state Department of Human Services.
“This looks like it will be a substantial net benefit to the state budget over the long term,” says one nonpartisan fiscal analyst. “In the short term, it will be very expensive to the state, though not as expensive as the [MMB] numbers are saying.”
In terms of Minnesota budget implications, the heart of the federal overhaul is its plan to allow individuals making up to 133 percent of federal poverty guidelines to sign up for early enrollment in Medicare. This figures to remove a great many people from the ranks of not only GAMC, which serves mostly indigent, single adults, but of the state’s MinnesotaCare insurance program for working adults who don’t receive insurance coverage from their employers. This is a budget-helper for Minnesota because the enhanced Medicare program matches state dollars with federal ones, while both GAMC and MnCare are entirely state-funded.
The analyst says MMB’s FY11 numbers seem reasonably close to the mark — but ignore benefits that would accrue to the state in the years after 2012-13. One caveat: The analyst goes on to say that the increase in the ’12-’13 deficit (currently pegged at $5.8 to $8 billion) is likelier to be in the neighborhood of $680 million than the nearly $900 million claimed by MMB, provided that the savings to the Health Care Access Fund are used to offset the increased general fund costs. (That’s because MMB assumes that Minnesota would move immediately to covering everyone up to 133 percent of the federal poverty level, something states are allowed — but not required — to do.)
But once the state has weathered 2012-13, the analyst says, the new federal apparatus will be “quite beneficial” to Minnesota. The ’12-’13 biennium represents a special fiscal challenge due in large part to massive projected deficits for MnCare during that period: “The Health Care Access Fund [a dedicated pool of dollars that funds MnCare] is projected to run huge deficits, in the hundreds of millions of dollars, over the next two years. You need to get that fund back to zero before you start to realize any net savings.
“But in subsequent biennia, HCAF would likely begin to build a surplus thanks to the federal matching funds provisions for people who move to early-enrollment Medicare. By ’14 and ’15, you would be seeing a great deal of benefit to the state [budget].”
This, of course, is followed by the inevitable caveat: “These numbers” — wait for it — “are all a little fuzzy at this point.”
