Archive Hosted by the AFL-CIO

Cuts For Disabled Minnesotans Ignore Priorities

March 01, 2011 By Ben Hanson, Policy Associate

Health care coverage for persons with disabilities is one of the most expensive. Yet, Minnesota has a tradition of going above and beyond the national average, providing more funding and more comprehensive coverage, according to the Kaiser Foundation. Facing a $5 billion deficit, will the state be able to maintain its valued commitment to this care and coverage?

Let’s look at some of the options.

The state’s Disability Services Division (DSD) “manages publicly funded programs that support people with a variety of disabilities, including developmental disabilities, chronic medical conditions, acquired or traumatic brain injuries and physical disabilities.”

The program seeks to enable people with disabilities to live where and with whom they choose and, if possible, maintain a job. This helps provide a sense of independence for those served and helps ensure fiscal efficiency for the state. The program has transitioned many Minnesotans from nursing homes, which cost three times more, to home and community-based care.

DSD, like most divisions of the state’s Department of Human Services, has seen major cuts to its budget in recent years.

For example, personal care assistance, which helps ensure people can stay out of nursing homes, is a cost saving program coming under the axe. By July of this year, nearly 2,600 Minnesotans with disabilities, roughly 1,300 children, are slated to lose their care assistance funding and may have to seek nursing home care. An additional 6,000 people younger than 65 are expected to have services reduced. This on top of an unknown number of lower income senior citizens losing at-home care coverage.

Another program helping Minnesotans with disabilities got completely cut: Minnesota Disability Health care Options program (MnDHO). Based in the state’s metro-area, the program combined funding and resources from the Department Human Services, UCare, and AXIS, a healthcare agency which specializes in disability casework. As part of the compromise with Governor Pawlenty, all 1,200 patients permanently lost MnDHO. This cut is estimated to cost the state an additional $120,000 a month in hospitalizations.

Another savings idea could wind up costing the state more in the long term and reducing services. It's changing the way the state pays for disability services.

Right now Minnesota pays providers through a "fee for service" system, by which doctors and caregivers are paid directly for the services they are giving.

However, Minnesota’s seven largest HMOs released a report recommending that disability programs shift from “fee for service” to “managed care,” which involves giving a pool of money to an HMO to pay for a variety of services.
While Minnesota does have some programs (none with disabilities) go through managed care, other states with a broad, 100% managed care systems tend to have lower rankings on health care over all (i.e. Tennessee, South Carolina). While Minnesota health care advocates feel managed care is appropriate in some medical fields, they say it could reduce services and increase costs when it comes to treating people with disabilities.

A majority of the non-profit HMO's operating in Minnesota (including the seven behind this push) now have a majority of their business in administering state health programs.

Critics such as Steve Larson with Minnesota Consortium for Citizens with Disabilities point out that the recommendation fails to mention just how much more HMO's would be making off of this sort of arrangement. Managed care would send the funds straight to them, giving insurers more discretion as to how state funds are spent and on whom they’d be spent.

Governor Dayton and Human Service Commissioner Lucinda Jesson met with the health plan CEO's and MN-CCD along with other advocates in the disability care community to discuss moving forward with this year's budget.

Due to budget constraints, Dayton initially purposed reducing funding for some services. However, with recent news that Minnesota's projected deficit has shrunk by $1.2 billion, Dayton now purposes to restore many of his Department of Human Services cuts.

Even with Dayton’s funding restorations, it’s likely the conservatives’ budget proposal will target health care cuts of some sort.

The question remains, what investments, policy directions, and budget decisions must we make to ensure Minnesota’s reputation as a high quality, high care provider of public health services? What’s the best way forward to ensure we can maintain this funding commitment?

Thanks for participating! Commenting on this conversation is now closed.


  • Julie says:

    March 1, 2011 at 10:29 am

    The best ideas for how to save money within the HSS budget could come from the people who provide and use the services each day.  I think a small group charged with listening to the providers and users would find numerous incredible ideas to streamline the funds used and potentially increase the quality of the services simultaneously.

  • Ken Tschumper says:

    March 8, 2011 at 1:42 pm

    The solution to reduce cost and improve quality for health care services to people with disabilities is to replace fee for service with care coordination and medical homes, but it’s a mistake for the State to essentially hire HMOs to do this. The care coordination could be done by the providers without having the HMO middlemen making decisions and adding costs to the care.

  • Richard Coad says:

    March 14, 2011 at 5:12 pm

    Exhaustive and inclusive reality based assessment is usually the first order of good decision making. Without verifiable facts, decisions tend to drift, usually off course. Actual costs, history of vendors and probable consequences for the present beneficiaries would be needed for appropriate change. The State of Minnesota’s own history of helping the differently enabled could use a need versus actual help chart for seeing things clearly.
    This is part of our greater infrastructural needs assessment, which includes water, power, light,transportation, health and several other important categories. The twenty-four hours without test usually sorts these things out. If we cannot do without something for twenty-four hours, it belongs on the infrastructure list.
    Lastly, for now, we do have many competent CPA firms that can fairly assess the effectiveness of private and public organizations. Within our existing educational community there are also many groups that regularly assess even more complex issues; some of these set world standards.
    Would like to substitute our best for the usual, e.g. would like to hear the whole story, exhaustive and inclusive, of the elephant well written and well told. This that we might see clearly the great matters of our time and place. We are on the cusp of a major sea change: we would do well to become informed and act wisely.
    Thanks to both of the previous writers for their contributions, dc.