Navigating Tight Budgets: Minnesota’s Health and Human Services Departments Face Challenges
Minnesota’s Departments of Health and Human Services are facing a familiar challenge: balancing the needs of a growing population with increasingly tight budgets. As leaders presented their proposed budgets to the House Health finance and Policy Committee on February 10, 2025, it became clear that difficult decisions lie ahead.
while federal funding plays a significant role in supporting thes vital programs, state budgets are feeling the strain of rising healthcare costs. “this budget (proposal) really shows how hard it is indeed to cut the budget without hurting people,” acknowledged Rep. Tina Liebling (DFL-Rochester).
Department of Human Services: Balancing Needs and Resources
The department of Human Services (DHS) is proposing a $23.8 billion budget for fiscal year 2026, with $12.6 billion coming from federal sources. This department touches the lives of over 25% of Minnesotans, providing crucial services to 1.3 million Medicaid enrollees and 837,000 individuals receiving Medical Assistance. Notably, 42% of children in the state rely on Medicaid for healthcare coverage.
The governor’s proposed budget includes a reduction of $193.4 million for the DHS, aiming to curb spending through various measures. These include increasing the HMO surcharge, which is projected to generate an additional $173 million in revenue.
Further cost-saving measures involve adjustments to reimbursements for outpatient pharmacy benefits and non-emergency medical transportation. While these changes are expected to yield some savings in the 2026 budget, their full impact will be realized in subsequent years.
However, the proposed elimination of the chiropractic benefit, projected to save $7.5 million, has sparked debate. Rep. Mary Franson (R-Alexandria) expressed concern about cutting a relatively low-cost benefit, especially given the department’s ongoing challenges in collecting provider debt. “Why aren’t we going after fraud rather of cutting health care services?” she questioned.
The potential impact of federal funding fluctuations also looms large. Rep.Robert Bierman (DFL-Apple Valley) voiced his anxieties,stating,”I’m not sleeping very well right now,knowing how much we depend on Washington to do this work.”
In response to these concerns, Budget Director Elyse Bailey assured the committee that the department has established a team of leaders prepared to assess and respond to any changes in federal legislation or executive orders that coudl affect their budget.
Department of Health: Addressing Rising Costs and Evolving Needs
The Department of Health (DOH) is requesting an additional $3 million from the General Fund to address rising costs associated with staffing and facilities.
Health Commissioner Brooke Cunningham emphasized that the department’s budget proposal is ”responsible, measured and honest about its needs.”
Cunningham also proposed several increases in inspection fees for various operations, including assisted living facilities and food trucks. She argued that these fees, many of which have remained stagnant for 15-25 years, need to be adjusted to reflect the increased complexity and demands of the department’s work.
Looking Ahead: Navigating Uncertainties and Prioritizing Needs
The proposed budgets for Minnesota’s Departments of health and Human Services highlight the ongoing challenges of balancing the needs of a growing and diverse population with limited resources.
As the state grapples with these budgetary constraints, it’s crucial to consider the following:
Clarity and Public Engagement: Open and obvious dialogue about the budget process is essential to build public trust and understanding. Engaging stakeholders, including healthcare providers, patients, and community organizations, can help ensure that the needs of all Minnesotans are considered. Innovation and Efficiency: Exploring innovative solutions and streamlining processes can help maximize the impact of limited resources. This could include leveraging technology to improve service delivery, promoting preventive care, and fostering collaboration among healthcare providers.
* Long-Term Sustainability: developing a long-term strategy for funding healthcare and human services is crucial to ensure the sustainability of these vital programs. This may involve exploring new revenue sources, promoting cost-effective care models, and advocating for increased federal funding.
The decisions made in the coming months will have a profound impact on the health and well-being of Minnesotans. By prioritizing transparency, innovation, and long-term sustainability, the state can navigate these challenges and ensure that all residents have access to the care they need.
