Overview
- The plan would terminate Managed Care Organization contracts, stand up a single state-run administrative service to process Medicaid claims, shift eligibility work from counties to the state, and modernize outdated IT systems.
- Budget officials estimate the state takeover of county eligibility functions would cost about $17 million in the first budget cycle and $55 million in the next.
- The rollout follows federal moves to withhold roughly $243–$259 million in Medicaid payments and threats of larger cuts, which Minnesota is challenging in court.
- Reaction was immediate and divided, with Republicans rejecting more authority for DHS and DFL Senate Human Services Chair John Hoffman criticizing the lack of prior consultation, casting doubt on passage this session.
- Disagreements persist over the scale of fraud—federal prosecutors have cited potential losses in the billions while DHS points to about $300 million verified—alongside ongoing proposals for an independent inspector general and expanded investigative capacity.