Minnesotans with disabilities feared state balancing budget ‘on our backs.’ Here’s what happened.

A feeling of “terror” hung over Judy Moe for months as she watched Minnesota politicians debate how to rein in the rising cost of disability services.

For Moe and her 29-year-old daughter Raven, who has spina bifida, their Medicaid waiver is a lifeline. It pays Judy to provide care for her daughter, helps them live in an accessible home in Richfield and allows Raven to participate once a week in a job she loves.

The mother and daughter were among the Minnesotans who have been warily watching and showing up at the State Capitol this year to protest waiver changes and other proposals they feared would “balance the budget on the backs of the most vulnerable.”

State leaders passed a budget this week that doesn’t go as far as advocates feared, but still significantly reduces spending on people with disabilities and seniors who need long-term care.

There’s going to be “belt tightening” for disability services providers, but the sacrifice will be shared with nursing homes, said House Human Services Finance and Policy Co-Chair Mohamud Noor, DFL-Minneapolis.

More tightening is likely as members of Congress look to cut Medicaid in the Republicans’ budget bill.

“I’m just even more scared about what’s going to come from a federal level, because it’s also about what the state legislators and the governor are going to do with those cuts,” Moe said, after the state budget was passed. “I don’t trust that they are going to do the right thing.”

More than 66,000 Minnesotans rely on Medicaid disability waivers, according to the Department of Human Services. Waivers cover services from transportation to employment assistance to help with daily living, like bathing and eating.

At the start of the year, DFL Gov. Tim Walz said Minnesota’s generous waiver programs are unsustainable and poised to eat up an increasingly large portion of the state budget. He proposed significantly scaling back spending on waiver services.

The state sets waiver services payment rates, which are tied to inflation. As more people with more expensive needs seek long-term care waivers, Walz’s biggest human services cost-saving proposal was to cap inflationary increases at 2% per year. He also proposed making counties take on some of the cost of residential services paid through disability waivers.

Disability advocates and county officials sharply condemned those ideas.

Lawmakers and the governor ended up passing a 4% annual inflation cap. They also created an advisory council to recommend ways to reduce the cost of services and support for Minnesotans with long-term needs. As that group searches for $177.5 million in savings, a similar hunt will be playing out in special education, where a commission was tasked with finding $250 million in cuts for the next budget.

“Ultimately what this did was grant us more time,” said Matt Freeman, director of the Minnesota Association of County Social Service Administrators.

State leaders are also looking to cut costs by reducing the number of people who receive disability waiver rate exceptions. When someone has particularly high needs, service providers can seek exceptions to handle extraordinary costs.

“The budget includes provisions that focus on program integrity and reductions that limit future payment growth in the disability waiver programs, while avoiding more harmful cuts that have been used in the past such as immediate rate reductions, enrollment limits and waiting lists,” DHS Interim Aging and Disability Services Assistant Commissioner Mor Vue said in a statement.

Vue said the budget will assure the stability of disability programs for years and spread reductions across multiple programs so a single population doesn’t bear all the effects.

As legislators worked behind closed doors to iron out the human services budget, several people said nursing homes and disability services were being pitted against each other.

Ultimately, both saw cost reductions.

“While we recognize it was a compromise, we are deeply disappointed and terribly concerned about what this will mean for the future of Minnesota’s nursing homes,” said LeadingAge Minnesota president and CEO Kari Thurlow, whose association represents service providers for older adults. She doesn’t think policymakers are thinking long-term about how to prepare for an aging population.

The budget caps increases in nursing facility operating payment rates at 4%. When the cap takes effect next year, Thurlow said the way nursing homes are reimbursed will result in the state not covering some previous costs and leave providers to shoulder expenses — raising concerns of potential closures.

But Thurlow called the budget a “mixed bag.” Providers got some money to help cover what she said would have been an “unfunded mandate” by the state’s Nursing Home Workforce Standards Board to increase the minimum wage for workers.

Disability advocates were pleased with some changes to MnCHOICES assessments, the high-stakes annual process where a government worker evaluates what help someone with a disability needs and the Medicaid-funded services they can receive.

Some counties have fallen far behind on those analyses. Several changes this session could make the process easier for both individuals seeking services and county workers, including allowing some people to skip a couple reassessments if their needs have not changed and allowing for more reassessments to be done remotely.

Families of children with disabilities were also pleased lawmakers did not reinstate “parental fees” on those getting Medicaid services, which could add up to tens of thousands of dollars a year for a family. The state eliminated the fees two years ago, but lawmakers had considered bringing them back for wealthier families.

While lawmakers did not delay the state’s overhaul of its waiver system — a move some disability advocates had called for — they added an expanded advisory group to have more voices at the table in that process, said House Human Services Committee Co-Chair Joe Schomacker, R-Luverne. The overhaul, called Waiver Reimagine, has faced pushback from people who fear it will make it harder to live independently and lead to more institutionalization.

State leaders made numerous other spending changes to disability services, many of which appear small in the scheme of a $66 billion state budget. But for people like Justin Smith, they could be life-changing.

Smith, who lives in Roseville and has cerebral palsy, uses a service called “individualized home supports with training,” which provides skilled staff he needs to help him live independently. Smith wrote in an email that he is finally close to being fully staffed and that is now in jeopardy as legislators have limited billing for the service.

“It feels as if adults with disabilities trying to live in their communities are being left behind with very few workable options,” Smith said. “The need for care does not go away when funding gets decreased or disappears. It just means that those of us with disabilities and our families will struggle more than we already do.”