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Spending bills spare most nursing homes

ST. PAUL -- Most nursing homes are spared big budget cuts and low-income Minnesotans on government health insurance remain covered under Democratic lawmakers' health care spending proposals.

Protecting government-subsidized health insurance for the poor is a key priority for the DFL-controlled House and Senate, the committee chairmen said as they prepare their spending bills for final votes.

"We're not kicking anybody off health care like the governor wanted," said Rep. Tom Huntley, DFL-Duluth, the House health care finance chairman.

Gov. Tim Pawlenty proposes to tighten eligibility requirements for MinnesotaCare, a state health insurance program for low-income people. His proposal would drop 55,000 adults from the program when the new budget period begins July 1. Another 29,000 adults remain on the program until 2011, but then would lose coverage.

The Senate and House make no changes to MinnesotaCare eligibility. Removing people from those programs will cost hospitals more and, in turn, drive up costs for private health insurers, said Linda Berglin, a Minneapolis Democrat and the Senate health finance chairwoman.

In the Senate bill, released Friday, the health and human services budget is cut by about $606 million over the two-year budget period. Berglin said she tried to reduce spending fairly and soften the blow to health care providers.

"No one wants to see cuts in this area because this budget takes care of elderly, disabled, poor children and families," Berglin said.

The House proposal cuts health care spending by $400 million from a roughly $9 billion budget. The House will have to agree to more spending cuts during legislative negotiations, Huntley said, but he could not predict how an agreement will shake out.

"The (legislative) leadership will have to decide where we end up," he said.

No Minnesota nursing homes are targeted for reduced state payments under the House proposal. Senators suggest cutting payments to nursing homes with higher reimbursement rates than others in their region of the state.

Lawmakers are not proposing enough health care spending reductions, Pawlenty said.

Health and human services programs must be reduced because that spending area consumes a growing portion of the state budget, Pawlenty said. The governor said health spending could take up one-third of the two-year budget and is "absolutely out of control."

"This one category is financially killing us," Pawlenty told a Chamber of Commerce audience Friday. "It has to be slowed down."

Senate and House leaders plan to vote on the health and human services spending bills Monday. The health-care bill will be the last of the Legislature's spending bills to reach floor votes and it represents the second-largest area of the state budget, behind public education.

Minnesota hospital executives lobbied lawmakers in recent days, urging them to avoid reducing state reimbursements to hospitals and health clinics for care to poor patients.

Senators propose cutting those hospital payments by 1 percent and making other reductions to some hospital maternity expenses. Pawlenty and House Democrats propose cutting those hospital payments by 3 percent during the budget period.

All three proposals raise fees in a variety of health care programs.