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Pawlenty budget: All health programs face cuts

Human Services Commissioner Cal Ludeman, left, and one of his financial aides, George Hoffman, listen to a representative's question during a Wednesday committee hearing. Democrats on the committee grilled them over proposed budget cuts. Pioneer Photo/Don Davis

ST. PAUL -- No state health care program escaped Gov. Tim Pawlenty's budget axe this week.

"It affects almost literally every program that we touch," Human Services Commissioner Cal Ludeman on Wednesday told the House Health Care Finance Committee.

That is not acceptable to most DFL legislators.

"What we are doing here is simply allowing a lot of need to go unmet," Rep. Erin Murphy, DFL-St. Paul, said.

Forty-eight human services-related items, mostly health-care programs, would be affected by the cuts, if lawmakers approve them.

The commissioner said that Pawlenty would cut $333 million from his programs as part of a $1.2 billion budget-cutting measure.

The biggest cut would reduce the number of people eligible for the state-subsidized MinnesotaCare health insurance program. The $129.7 million reduction would mean more than 20,000 adults without children would lose the benefit.

The second biggest impact would be a $13.8 million cut that essentially eliminates General Assistance care for some of the poorest Minnesotans. Ludeman said that would affect 16,200 people.

Another major cut would be a 2.5 percent payment reduction to nursing homes and other long-term care facilities. That accounts for $37.3 million.

A $21.5 million cut would drop 500 families off assistance, Ludeman said, because the state would begin to count federal supplemental income insurance as part of their income. SSI has not been figured in family income for years, the commissioner added.

Another 475 families would lose child care assistance due to a $4.6 million cut.

Ludeman said that the Pawlenty administration tried to preserve enough programs to help Minnesotans most in need of health care.

With health care and education taking up most of the state budget, policymakers have said there is no option other than to cut health programs to balance the current $1.2 billion budget deficit and larger ones in the future.

Pawlenty long has complained about soaring health-care costs and their impact on the state budget.

Murphy, however, said: "This is not what people think of as government just expanding. ... It is a need."

Ludeman said the rising health-related costs are not because the state is adding services. He listed four reasons why costs are going up:

- More enrollment in state programs is the biggest cost driver, with 585,000 disabled and elderly Minnesotans being helped by just one program, Medical Assistance.

- Medical costs are rising for everyone.

- The complexity of the state's programs increase costs.

- Patients take advantage of more state programs and utilize care longer than in the past.

The House today debates one of the most controversial parts of Pawlenty's budget cuts as DFL representatives try to reinstate General Assistance Medical Care for 16 months. Pawlenty eliminated the program last summer, saving $381 million while sending 28,000 to MinnesotaCare, where they will be forced to pay.

Rep. Tom Huntley, DFL-Duluth, said that many people who now could get immediate health-care financial assistance if needed may need to wait months until they qualify for MNCare. And those who are hospitalized, the committee chairman added, would be forced to pay $1,000 deductibles; many of those now on GAMC only earn about $2,000 annually.

Since hospitals cannot turn away emergency patients, Huntley said, they will end up treating more people for free at a time when Pawlenty wants to cut how much the state pays many rural hospitals by nearly $2 million.

Don Davis works for Forum Communications Co., which owns the Bemidji Pioneer.