Ramstad: There was an economic argument for offering Medicaid benefits to undocumented immigrants

In the end, moderation again prevailed at the Minnesota State Capitol as the Legislature wrapped up the state budget in a one-day special session last week.

Do not, however, conclude Minnesota is free of the drama and irrationality overtaking America under President Donald Trump.

This is one of the farthest states from the southern border and one of the least affected by the wave of undocumented immigration from 2021 to 2023. And yet, the fate of Minnesota’s state budget hung on a handful of legislators and Gov. Tim Walz voting against their conscience to end public insurance for immigrants in the country illegally.

That is the most visible way Trump’s anti-foreigner sentiment is playing out in the state.

Trump continues to portray illegal immigration as a bigger problem for the U.S. than it is. Last week, we saw a spectacle in California as federal agencies charged with deporting undocumented people did so in a showy way that invited protest, leading to a crackdown as Trump deployed Marines to Los Angeles.

Federal deportation efforts are in the news a lot, but data shows they’ve become slightly less effective. From January through mid-May, the country deported 1% fewer undocumented immigrants than it did in the same period a year ago.

For Republican politicians across the country, however, the message is clear: Get in line with Trump on immigration.

In Minnesota, the state’s fiscal challenge provided GOP politicians with the ammunition they needed to force a retraction of benefits to undocumented immigrants that DFLers created two years ago when they had trifecta control.

The Republican argument was simple and, on the surface, sensible: With the state facing a prospective budget deficit two years out, a first option to rein in spending should be to limit publicly funded insurance benefits to undocumented immigrants.

“That is an issue that polls very, very high across the state whether it’s Republicans, Democrats or independents,” House Speaker Lisa Demuth told me last week after the special session.

She noted Republicans conceded that such benefits be offered to children of undocumented immigrants. Early enrollment numbers for adults, rising above 20,000 from a projected 5,700, made Republicans nervous about longer-term costs, she said.

“When we looked at just the economic factors surrounding that, and listening to Minnesotans across the state, we made the decision that needed to change,” Demuth said.

Republican Sen. Torrey Westrom during Monday’s session chose a colorful metaphor to make the case. He called it a “red barn question,” something so obvious — like being asked whether a red barn is red — that you feel stupid for being asked.

“Who should Minnesotans prioritize first when you’ve got only a set amount of money? Should we prioritize Minnesotans or the rest of the nation and world? This is a ‘red barn question,’ members,” Westrom said. “Minnesotans first ought to be the priority.”

Here’s the red barn question a fast-thinking supporter of the Medicaid benefits to undocumented workers might have asked in turn: Should a state like Minnesota with a population growing more slowly than ever do something extraordinary, like offering Medicaid to undocumented workers, because we need them?

I’ve written before that the nation’s immigration situation turned chaotic during the Biden administration. However, Minnesotans did not feel pain the way Texans or Arizonans did. Just the opposite when you look at the numbers.

Minnesota’s workforce of 3.1 million people has just 25,000 more people in it today than it did at the start of 2020. Estimates of the state’s undocumented population are around 80,000. Some of those are children, and some of the adults don’t work. But let’s estimate half of the 80,000 are working.

That would mean, on a statistical basis, all of the growth in Minnesota’s workforce this decade is because of people many Minnesotans don’t think should be here.

The decision at the Legislature two years ago to offer Medicaid care to adults regardless of immigration status made the state an outlier — just one of seven nationwide — and a potential target for the wrath of the Trump administration. In late May, the Centers for Medicare & Medicaid Services said it would try to stop states from using federal Medicaid dollars to cover people who are in the country illegally.

Media outlets this spring often portrayed the Legislature as “the most divided in state history.” You could also say it was the most balanced. The House was split 50-50 between Democrats and Republicans, while Democrats had a one-vote majority in the Senate but shared duties through April due to an empty seat.

With the Republicans holding firm on cutting the Medicaid benefit, getting the budget done meant Walz and at least one Democrat in both houses had to go against their political sensibilities and vote for the cut.

In the Senate, Majority Leader Erin Murphy was joined by fellow DFL Sens. Grant Hauschild, Robert Kupec and Ann Rest.

In the House, the only DFL vote came from Speaker Emerita Melissa Hortman. When I asked her after the session why Democrats didn’t wield economics as a reason for keeping the benefits, she said the task for her colleagues who spoke Monday was to “make sure the Republicans know exactly that they’re hurting people.”

“Andy Smith, a former conservative preacher who’s now a liberal Democrat, gave a real sermon on all the places in the Bible where it tells us to welcome the stranger and care for the sick,” Hortman said. “That stuff hit me the hardest.”

She said the estimated two-year costs of the benefit, about $200 million from 2026 through 2029, was within reason for a government that will spend around $140 billion in that time.

“It was never about the money. It was about cruelty,” Hortman said. “It was hard to be part of it. But it was not my requirement for a state budget. It was Republicans’ requirement. And I know we need a state budget, so I had to vote for it.”