Minn. proposal would add top tax tier to backfill possible federal Medicaid cuts; bill laid over

Chair Gomez introduced House File 2591, the Protect Medicaid and Not Millionaires Act, proposing a fifth individual income-tax tier intended to offset any reduction in federal Medicaid funding that would otherwise flow to Minnesota. The committee heard roughly an hour of testimony from public-health workers, union representatives and mental-health providers before the bill was laid over for possible inclusion in the 2025 taxes bill.

The bill would create a contingent top marginal rate that, according to Chair Gomez, would be set “at a rate sufficient to offset any cuts in federal Medicaid funding that flow to the state of Minnesota.” Gomez said analysts estimate the state share of a broad federal Medicaid reduction could be about $1.4 billion to $1.6 billion in fiscal year 2027. Gomez also noted that 42% of Minnesota children rely on Medicaid for health coverage.

Supporters told the committee that Medicaid is a lifeline for many Minnesotans and that federal budget changes could force the state to backfill a large funding gap. Simone Blaylock of SEIU Healthcare…