MN Lawmakers Agree To $205M HCMC Lifeline

ST. PAUL, MN — Minnesota lawmakers have agreed to send $205 million to Hennepin County Medical Center in Minneapolis, giving the financially strained safety-net hospital a major lifeline as officials warned it was facing a crisis.

But the deal stops short of the longer-term fix Hennepin County leaders had pushed for.

The agreement, reached by Gov. Tim Walz and legislative leaders as part of an end-of-session budget deal, would use state cash reserves to fund the hospital, according to Axios.

It does not include a proposal to convert and expand Hennepin County's expiring Target Field sales tax into an ongoing health care tax for HCMC.

That means the deal gives HCMC immediate help, but leaves unanswered the larger question of how Minnesota will permanently fund one of its most important hospitals.

HCMC is a Level I trauma center and safety-net hospital in downtown Minneapolis. Hospital officials and county leaders have said the hospital serves patients from across Minnesota, including people who are uninsured, underinsured, or covered by public programs.

Under an earlier House proposal, lawmakers considered extending and increasing Hennepin County's current 0.15 percent sales tax to 0.75 percent. The tax was originally approved to help pay for Target Field.

That proposal would have created a more permanent funding stream for HCMC, but it did not make it into the final deal.

Instead, lawmakers agreed to provide $205 million this year. The deal also includes a $500 million hospital reserve account intended to help keep HCMC open in future years, according to WCCO Radio.

The agreement comes after Hennepin County and Hennepin Healthcare officials warned lawmakers that HCMC was facing a structural financial problem.

"The situation at HCMC is acute, pushing us to the financial brink," Hennepin County Commissioner and Hennepin Healthcare Board Chair Jeffrey Lunde told lawmakers earlier this month, according to House Session Daily.

Hennepin County Administrator Jodi Wentland told lawmakers the hospital's financial issues could not be solved through cuts alone.

"This is a structural deficit and not one we can cut our way out of," Wentland said, according to House Session Daily.

Supporters of the sales tax proposal argued that HCMC needs a dedicated funding stream because it provides essential services that go far beyond Hennepin County. The hospital provides emergency, trauma, burn and specialty care, and receives patients from other hospitals across the state.

But the tax proposal raised concerns among lawmakers over whether Hennepin County residents and shoppers should carry the long-term cost of supporting a hospital that serves patients statewide.

The final deal appears to split the difference: HCMC gets a large infusion of state money, but not the permanent local tax county officials requested.

Lawmakers still need to write the agreement into final legislation and pass it before the session ends.