Access Press, Volume 14, Issue 5, May 10, 2003. Article

Budget Cuts Affecting PWD

by Anne L. Henry

The Legislature has been working long hours to pass a state budget for the next two years, beginning July 1, 2003. Because Minnesota has a $4.2 billion budget deficit and the governor pledged not to raise taxes, the Legislature is considering the governor's proposals and other ideas for many serious cuts which affect persons with disabilities (PWD). The House and Senate have passed very different funding bills for Health & Human Services and Jobs & Economic Development which have to be worked out in conference committees. The Legislature is set to adjourn on May 19, 2003. A budget must be adopted by the Legislature before June 30, 2003 because the current budget, which funds state government, ends on that day. For details on the governor's budget proposals, see the March issue of Access Press (www.accesspress.org).

Both the House and Senate Health and Human Services omnibus funding bills provide more resources than the governor's budget proposal. However, the Senate provides $571 million more than the governor, while the House provides $70 million more. The Senate has more money to lessen the cuts because of their proposals to raise taxes on those with incomes over $250,000, close corporate tax loopholes and raise the cigarette taxes. The House has proposed to raise about $100,000 by allowing slot machines at Canterbury Park, but has not passed a tax increase.

Community Service Provider Rates

Both the House and Senate did not adopt the governor's proposed rate cuts for community service providers. Rates paid by Medical Assistance for community services used by many PWD, including home and community waiver providers, personal care assistant providers, private duty nurses, day training and habilitation services, community mental health providers and ICFs/MR (intermediate care facilities/mental retardation), were restored with over $81 million in both bills.

Medical Assistance (MA) Coverage

Among the significant differences in the bills, the Senate did not institute any co-payments for MA services, while the House adopted co-payments with several changes: 1) a $20 out-of-pocket limit per month for medications, 2) no co-payments for speech, occupational and physical therapies and 3) no co-payments for anti-psychotic medication. Also, the Senate did not impose the cost of Medicare Part B premiums or an unearned income payment on MA-EPD (Medical Assistance for Employed Persons with Disabilities) enrollees. The House does require payment of Medicare Part B premiums for those with an income over 150 percent of the Federal Poverty Guidelines (FPG), $1,124 per month, and ½ percent of unearned income such as Social Security benefits, in addition to the other changes proposed in the governor's budget--which include a $35 minimum premium and two new eligibility requirements: a) earnings above $65 per month and b) verifying that taxes are withheld or self-employment taxes are paid.

The House imposed a limit of $500 per year on dental services for adults using MA. The Senate did not adopt any cuts to dental services for those with MA coverage.

Both the House and the Senate adopted substantial changes to the MA Pharmacy program. These changes include a preferred drug list, new prior authorization requirements and a limitation on the amount of medication one can obtain at any one time. The House limits the supply to 34 days and the Senate to 30 days. There are detailed provisions in both bills for anti-psychotic medication begun after July 1, 2003 involving a preferred drug list and prior authorization. The step therapy provisions, whereby a physician must use the cheapest medication first and can only prescribe more expensive alternatives if the cheaper medications are not effective, were removed from the House bill by an author's amendment on the floor and are not included in the Senate bill.

Low-Income Families, MFIP/SSI

The Senate did not reduce cash assistance to low-income families on Minnesota's Family Investment Program (MFIP) who have a member with a disability receiving SSI payments; the House did impose a cut of $175 per month on these families.

Home and Community-Based Waiver Funding

Both the House and the Senate adopted the governor's proposals to eliminate new resources for the Home and Community Waiver program for persons with mental retardation or related conditions (MR/RC) which will mean that 600 new persons will not gain access to such funding in the next biennium. Also, both the House and the Senate adopted a cut for the traumatic brain injury waiver which is slated to save $4.9 million in state funds for the next biennium by limiting the number of new persons or services for the program. In addition, the governor's proposed cuts delaying the common service menu and targeted home care case management were adopted by both the House and Senate.

Social Services Funding, CSSA/Title XX

The House modified the governor's proposal by not agreeing to eliminate access to state and federal social services funding (CSSA and Title XX) for adults over age 25 and maintaining the right to appeal. Social services funding pays for numerous important services for PWD including protection services, children and adult mental health services, case management and DT&H services (see below). The Senate did not adopt either the governor's proposal or an alternative sought by the counties which would allow them to reduce or terminate services if state funding is not sufficient. Current social services funding, required services and the right to appeal are protected in the Senate bill.

Day Training and Habilitation Services (DT&H)

The House adopted language which changed the governor's proposal on DT&H services for those living in ICFs/MR by providing more protections to assure persons' needs for habilitation and involvement outside their residences are met, but still cut the amount proposed by the governor ($1.6 million in state funds). The House also changed the governor's proposed language on elimination of the county mandate for DT&H services. However, the House language which was adopted allows counties to reduce or terminate DT&H services if funds are insufficient. The Senate does not change either the ICF/MR DT&H requirements or the county mandate requiring that these services be provided if needed according to the individual service plan.

Consumer Support Grants, Parent Fees

The House preserved the Consumer Support Grant exception amount funding for 200 Minnesota families caring for a loved one with a significant disability at home. The Senate eliminated exception grants for these families. Also, the House adopted a modified version of the governor's proposal to substantially increase parent fees for in-home and out-of-home services for children with significant disabilities. The Senate also adopted substantial fee increases for these families as proposed by the governor.

ICF/MR Services

For ICF/MR services for persons with developmental disabilities, the House shifted 5 percent of the cost to counties for persons in facilities larger than 6 beds (the governor proposed a 10 percent shift) and adopted most of the occupancy rate cut proposed by the governor except for allowing payments for facilities which provide respite care for persons with complex medical needs. The Senate did not impose a county share for ICF/MR facilities larger than 6 beds, but takes the same position as the House on substantially reducing occupancy payments except for up to 25 beds for respite care.

GAMC, MinnesotaCare

The House adopted the governor's proposed elimination of General Assistance Medical Care (GAMC) by October 2004, and an overhaul of MinnesotaCare for single adults. Those with an income over 75 percent of the FPG, $560 per month, would have to pay the full cost of $300 per month for coverage, beginning in October 2003. The Senate does not eliminate GAMC or MinnesotaCare for single adults, but instead adopts a more limited benefits package. The Senate proposal is patterned on the "Oregon Plan" in which particular health services for specific conditions or diagnoses are not covered. The Senate proposal limits the health services covered for MA enrollees by requiring prior authorization for these services beginning July 1, 2003. The list of health services not covered for specific conditions will be excluded from coverage for MA enrollees in 2005, after a public process to develop the list of services which are not covered because the services are found to be less effective than services which are covered.

Size of Group Homes

Adult foster homes are currently limited to 4 people. Both the House and Senate bills have provisions increasing the limits to 5 (Senate) or 6 (House) under some conditions, including informed consent, safety and adequate physical space. The Senate provision reduces waiver funding for 5-bed homes, the House does not.

Centers for Independent Living (CILs)

Both the House and Senate restored funding for the CILs in the Jobs and Economic Development omnibus bills; the Senate fully restored funding and the House restored 70 percent of the state funding. Also, the Senate restored funding for employment programs for persons who are deaf or hard-of-hearing, have HIV-AIDS, persons with mental illness and extended employment, as well as for State Services for the Blind. The House has funded some of these programs at a lower level, including 50 percent for the Deaf and Hard of Hearing employment program and taking the governor's cut (about 24 percent) for the mental health supported employment program.

Council on Disability

The House funded the Council at the level proposed in the governor's supplemental budget, which results in a 30 percent cut. The Senate funded the Council with a 15 percent cut and extended the Council for four years rather than the two years adopted by the House.

Final Decisions

The Senate's tax increases account for many of the significant differences between the House and Senate provisions affecting PWD because the Senate has more funding to reduce proposed cuts. The governor and House have continued to maintain a "no new taxes" position. This matter is at the heart of the final debate over the budget. In the end, if no new revenue is raised, the cuts in the House bills or, at least, a similar amount of cuts reflect the likely outcomes for the Health & Human Services and Jobs & Economic Development areas.

Contact Your Legislators

Call House Information at 651-296-2146 or Senate Information at 651-296-0504, or visit the legislative Web site www.leg.state.mn.us.

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