Pent-up demand will dog HHS budget
On New Year’s Eve day, a group of experts on mental health issues gathered to discuss goals for the looming legislative session. The meeting was spurred in part by urging from DFL legislators to draw up ideas for tackling the issue in the wake of the mass shooting in Newtown, Conn. It included representatives from the Minnesota chapter of the National Alliance on Mental Illness (NAMI), the Minnesota Association of Children’s Mental Health, and the Children’s Mental Health Division of the Minnesota Department of Human Services.
Before that gathering, advocates of expanded mental health services were planning a modest agenda at the Capitol in 2013. “We were kind of coming in feeling a little shy about asking for much,” said Sue Abderholden, NAMI’s executive director. “Sometimes you come in and say just don’t touch us.”
But that meeting yielded a lengthy list of legislative goals for the 2013 session, primarily focused on improving mental health services for kids. For instance, NAMI wants to double the funding for school-linked mental health services, to $5 million annually. It also wants to increase funding for respite care, which pairs up parents of kids with mental illnesses with trained professionals who can provide them with a break from the stresses of parenting. Another idea is to create a “family psycho-education” program. It would allow family members of individuals dealing with a mental illness to learn about the disease.
All told, Abderholden expects eight or nine bills related to mental health services — many carrying significant costs — to be rolled out in the coming weeks. “We have been the second cousin twice removed for way too long in the health care system,” she said. “We realize there’s a budget deficit. We’ve taken our cuts every single year, and it’s not OK.”
As the legislative activity around mental health services shows, there is a pent-up demand for funding health and human services programs. For the last decade, as the state has battled chronic budget deficits, funding for most such services has either remained flat or taken cuts.
In some respects, this year is no different. The state faces a $1.1 billion budget deficit and still owes school districts another $1.1 billion. Both Senate Majority Leader Tom Bakk and House Speaker Paul Thissen have indicated that health and human services are an area that will be targeted for cuts. That’s not surprising, given that such programs take up a third of the general fund budget and that the largest sector — K-12 education, at 40 percent — is widely considered sacrosanct.
‘They’re not going to be afraid to ask’
But that’s not stopping lobbyists for various causes from seeking increases in spending. With DFLers controlling all the levers of power at the Capitol for the first time in two decades, and tax increases clearly on the agenda, advocates are emboldened to push for more money.
“Two years ago they were just hoping to stay alive and not get reduced. Flat was success,” said Rep. Jim Abeler, R-Anoka, the ranking Republican on the Health and Human Services Finance Committee. “Now they sense there’s a bit of money, so they’re not going to be afraid to ask.”
Care Providers of Minnesota is seeking a 5 percent increase in nursing home rates and the Elderly Waiver Program, which subsidizes services for seniors, for each year of the biennium. The proposed increase would cost the state an estimated $56 million in the upcoming biennium. Care Providers is working with unions that represent nursing home workers and AARP Minnesota to lobby for the increase.
According to a 2011 study, the median operating margin for nursing homes in the state was just over 1 percent. In addition, 80 nursing homes — more than 20 percent of the state’s total — had negative operating margins of more than 5 percent.
Todd Bergstrom, director of research and data analysis for Care Providers, points out that rates for most nursing homes have been flat for four years. “It’s getting harder and harder to keep our staff that we have,” Bergstrom said.
The Association of Residential Resources in Minnesota (ARRM) is also seeking a rate increase for its members, which are group homes that work with disabled individuals. Bruce Nelson, ARRM’s executive director, says they haven’t settled on an exact figure, but suggests a 3 percent boost is likely to be in the ballpark. Each percentage point increase would cost the state about $30 million annually.
“We want to be somewhat in the real world,” Nelson said. “There’s a lot of pent-up demand in a lot of different sectors. There isn’t enough money to take care of all of it.”
In literature being distributed to legislators, ARRM points out that the Consumer Price Index has increased by 9.9 percent since 2007, while provider payments have dropped by 0.1 percent. Nelson notes that workers at group homes run by the state are set to get a 2 percent pay raise this year, but that most of his group’s members can’t afford to boost wages for workers, which generally hover around $11 per hour. Turnover in the sector is 40 percent annually.
“Their ability to pay more to caregivers is very problematic,” Nelson said. “We think that it really is a fairness issue for our caregivers.”
Arc wants waiver changes
The Arc of Minnesota, which advocates on behalf of clients with mental disabilities, is seeking to change the rules associated with the Developmental Disability Waiver program. Currently enrollees can only use the funds to pay for human services. The Arc would like to see that relaxed, so that individuals could use the money to pay for a wheelchair ramp or other changes that would improve their lives.
While that wouldn’t necessarily cost any money, Steve Larson, The Arc’s senior policy director, does point out that there are currently 3,600 individuals on the waiting list to receive a developmental disability waiver. That’s roughly 20 percent of all eligible individuals. But Larson stops short of saying The Arc will push to narrow that gap. “The billion-dollar deficit scares us, because there are going to need to be some cuts in growth going into the future,” he said.
Despite the rhetoric of DFL caucus leaders, Abeler doesn’t foresee them being able to stomach cuts to health human services programs. He thinks they will ultimately find it impossible to turn away so many worthy interest groups. “I don’t see any appetite for cuts in HHS,” Abeler said. “If I were the chair people would come in with requests for 1 and 2 percent. They’d know they’re not getting 5 [percent]. But still, there would be little appetite for retrenchment.”