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Lawmakers release bipartisan human services budget bill • Minnesota Reformer [1]

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Date: 2025-06 

A bipartisan group of lawmakers released on Thursday the final draft of their plan to cut $270 million over the next two years from programs that serve the elderly and disabled.

The two-year, approximately $17 billion compromise human services budget will cut future spending on nursing homes and home care programs, though it will raise pay for nursing home and home care workers. The bill largely avoids pushing costs on to county governments, which was a core piece of the House plan.

The Department of Human Services currently accounts for around one-third of the state budget, and spending is expected to rapidly grow in the coming years as the population ages and the cost of providing care increases. The majority of the agency’s budget goes toward Medical Assistance, Minnesota’s Medicaid program.

Agreeing on a DHS budget was one of the biggest hurdles lawmakers needed to clear before they reconvene for a special session to pass the remaining budget bills.

Legislative leaders and Gov. Tim Walz are aiming to hold a special session on Saturday, but there’s been no official announcement, and they’ve missed self-imposed deadlines before. If they don’t finish the budget by the end of June, large parts of state government will shut down. Some state workers have already received furlough notices.

Throughout the legislative process, leaders agreed to target DHS for cuts, though both chambers passed very different plans. The DFL-backed Senate budget focused on reducing payments to nursing homes; the House version pushed costs onto counties while cutting spending on programs that provide care to people with disabilities.

The compromise budget bill makes the following cuts over the next two years:

$186 million by capping inflation adjustments for long-term care waivers, which pay for in-home care for people with disabilities, at the federal urban inflation rate ( CPI-U ) or 4%.

$51 million from changes to “rate exceptions,” higher-than-usual payments for the care of people with extraordinary needs. The bill would create new limits on what is covered by the rate exception, and introduce new paperwork requirements.

Around $46 million by putting tighter limits on what Medical Assistance covers for day and unit based services, which help people with disabilities maintain life skills and participate in a community and activities. It also would cut pay for caretakers when they are sleeping on an overnight supervision shift.

$41 million from nursing homes by making a series of changes to how patients are classified, removing an incentive to create more single-bed rooms and capping some inflation adjustments.

It also generates more than $56 million in savings by increasing yearly fees paid to the state by nursing homes, and also increasing a reimbursement rate that corresponds to the fees, which pushes some costs onto the federal government.

The budget spends money on raises for nursing home and other care workers ($88 million) and on setting up a new licensing and oversight system for autism service providers ($11 million), some of which are under investigation by the FBI on suspicion of fraud.

The bill does not include a House proposal that would have shifted more than $150 million in costs to counties to pay for rate exceptions.

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[1] Url: https://minnesotareformer.com/briefs/lawmakers-release-bipartisan-human-services-budget-bill/

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