February Budget Forecast Shows Unprecedented Opportunity to Address Senior Care Funding Needs

Posted on March 2, 2023 by Jeff Bostic

Minnesota’s updated state economic forecast was released Monday, and Minnesota’s budget and economic outlook remain historically strong, with a $17.5 billion balance projected for the next biennium. The Minnesota Legislature will use this forecast to determine how much money each budget area, including health and human services, will be allowed to spend.

The details

Almost $12 billion will be left from the current biennium, which ends June 30 this year. While projected tax revenue has grown since the previous forecast in November, a legislative action this year to reflect inflation in state forecast spending, which has not been done for several decades, effectively leaves the surplus unchanged.

Health and human services forecast unchanged

The forecast for health and human services spending remains unchanged from the November forecast. Health and human services spending is projected to increase by $2.6 billion in the biennium that starts on July 1 of this year, primarily due to projected increases in portions of the Medicaid program serving growing populations, including Elderly Waiver and disability waivers. Those funds are part of forecast spending, meaning that the surplus of more than $17 billion is available for spending above that level.

What’s next

This forecast is the information that the Minnesota Legislature will use to determine how much they can spend in all budget areas, including health and human services.

Along with our partner in the Long-Term Care Imperative, we are supporting a funding bill that has been heard in both the House and Senate to address the funding crisis facing providers, causing a shortage of employees and limiting access to critical services. The cost of that proposal will be projected based on the current forecast, and it will easily fit within the vast surplus available.

We remain hopeful that, as a result, the Legislature and Governor will finally respond and do what is needed to address the long-term care crisis.

Our response

Along with our partner in the Long-Term Care Imperative, we issued a press release about the budget surplus. The statement included the following quote from Kari Thurlow, President and CEO of LeadingAge Minnesota: “Last October, admissions requests for senior care settings were denied 11,000 times due to caregiver shortages,” said Kari Thurlow, President and CEO of LeadingAge Minnesota. “When seniors can’t receive professional care in their communities, the burden falls directly on families to find a solution. In some cases, seniors face discharge delays in hospitals, backing up our already overcrowded healthcare systems. This problem will only get worse unless lawmakers prioritize funding senior care.”