Minnesota legislators approve health care budget with new provider tax and access initiatives

The Committee on Health and Human Services convened on April 10, 2025, to discuss critical budgetary measures aimed at preserving healthcare access for Minnesotans amid uncertainties at the federal level. The meeting focused on a proposed budget that includes a modest increase in the provider tax and innovative strategies to enhance healthcare services.

The committee began by addressing the need to protect healthcare access in light of potential federal cuts, which could significantly impact Minnesota's Medicaid funding. The proposed budget incorporates a 0.2% increase in the provider tax, which aims to stabilize funding for healthcare services while avoiding cuts to essential coverage. This adjustment is seen as necessary to maintain the integrity of the state's healthcare system.

Key components of the budget include three innovative proposals designed to improve access to healthcare. Two of these proposals focus on adjusting medical assistance rates, while the third addresses the individual market, particularly in light of the absence of funding for reinsurance. The budget also introduces low-cost coverage options, such as reimbursement for home birth services, which are expected to have a meaningful impact on healthcare accessibility.

The committee highlighted the importance of consistent funding for hospital systems and increased payments for mental health workers and physicians. These measures are intended to address ongoing challenges in financing healthcare and ensuring that mental health services are readily available to those in need.

Additionally, the budget allocates $10 million to replace the Social Services Information System (SSIS), a move that has been widely supported as essential for improving service delivery. The committee also discussed investments in food support and homelessness programming to address unique community needs exacerbated by federal economic decisions.

Concerns were raised regarding the increase in the provider tax, which has been a topic of debate since its initial adoption in 1992. The committee noted that the tax had previously garnered support from over a hundred organizations, emphasizing its role in maintaining healthcare stability.

The meeting concluded with the adoption of several amendments to the budget, including the A6 and A7 amendments, which were passed without opposition. The committee's discussions underscored a commitment to enhancing healthcare access and addressing the financial challenges faced by healthcare providers in Minnesota. Further amendments, including the A44 amendment, were also introduced for consideration.