Minnesota Hospital Association


March 04, 2024

Minnesota Budget Forecast: The Deficit the State Isn't Talking About

Minnesota’s finances are threatening patient access, sustainability of health care for millions 

The release of a new budget forecast by Minnesota Management and Budget has some good news, reporting a growing budget surplus and a strengthening economy, albeit with a caution about future spending. 

But it is missing a key detail: the surplus reflects, in no small measure, the state’s non-payment for hundreds of millions of dollars' worth of its own health care obligations. Patients are suffering as a result. 

State funded Medicaid reimbursements are not covering the cost of care for beneficiaries. State promises for mental, maternal and children’s health care are not being fulfilled. Basic needs, like emergency medical services, are being neglected. 

This translates to service cutbacks that providers are being forced to make, like labor and delivery closures; it means people spend hours waiting for care in emergency departments; it means patients spend days in hospital hallways waiting for inpatient beds; it means kids spend days, even weeks, waiting in hospitals for mental health treatment that may never come. It’s part of the reason paramedic responses have stretched out to more than an hour in some parts of the state. It’s part of the reason why health systems have been forced to eliminate hundreds of jobs in the last year. 

Underpayments and non-payment for public programs meant Minnesota hospitals provided more than $2 billion in unpaid care in 2023 alone. Nearly a third of that care, $800 million, was just for beneficiaries of state-sponsored Medicaid programs. Hospitals can’t afford to keep that up. 

Minnesota can’t keep passing its responsibilities off to the state’s not-for-profit health care providers. A financial surplus is no benefit if it comes at the expense of Minnesotans’ well-being. Minnesota needs to act now. And with a $3.7 billion projected budget surplus, it CAN act now to address the real deficit the state faces – a generational threat to patient care and Minnesota’s health.