ST. PAUL — The Minnesota Senate approved $150 million on Wednesday, April 29, to stabilize Hennepin County Medical Center amid warnings the Minneapolis hospital could close without financial aid from the state.
HCMC treats critical injuries and offers specialized care that many hospitals in Minnesota are unable to provide. But the hospital estimates a $1.7 billion deficit over the next decade, primarily driven by shifting federal healthcare policies and patients' growing inability to pay for care.
Hennepin Healthcare, which includes HCMC and a network of clinics, has accumulated more than $100 million in annual debt in recent years due to uncompensated care, more than double its 2020 total. The trend mirrors statewide increases in unreimbursed care, which reached $400 million in 2024, a nearly 50% rise since 2020, Minnesota Department of Health economist Stefan Gildemeister told lawmakers in March.
The DFL-backed Senate bill is part of a broader health and human services package that passed on a party-line vote. It also includes $115 million in aid for hospitals statewide. To become law, the plan still needs to pass in the evenly split House.
The funding in the Senate bill would provide short-term relief as lawmakers also consider longer-term solutions.
Several proposals are still being discussed.
One of them, advanced by the Senate Taxes Committee on April 29 and headed to the Senate floor for a vote, would increase the sales tax currently used to fund Target Field from 0.15% to 0.25% and direct the majority of the revenue to HCMC. A separate House proposal calls for a steeper 1% sales tax, which would generate an estimated $340 million annually for HCMC.
Lawmakers are also considering using the state’s general fund surplus as a temporary bridge while developing a long-term plan. A different plan proposes allocating $250 million annually from the general fund to HCMC and North Memorial Hospital for five years, with the expectation that the hospital would identify operational efficiencies.
Reductions in the number of patients served by HCMC would have ripple effects across the state, because many patients are transferred to the hospital from outside Hennepin County, said HCMC Physician Dr. Nathaniel Scott during an April 28 House committee meeting.
“Our health systems would be severely challenged to absorb the volume of patients we currently care for and may not have the specialty programs to do so,” Scott said.
Jan Malcolm, the governor’s senior adviser on hospitals and health systems, compared Minnesota’s healthcare systems to a Jenga tower during the April House meeting, warning that recent federal health care funding cuts are removing key supports.
“We’re all sort of in the same herd, moving toward the same cliff. It’s just that Hennepin already has a foot over the cliff,” Malcolm said.
The end of pandemic-era Medicaid eligibility protections in 2023 left many Minnesotans without coverage and reduced reimbursement rates for hospitals.
Additional changes to Medicaid will be rolled out through the next decade, including stricter work requirements, more frequent eligibility checks and shorter retroactive coverage periods. Certain immigrant groups, including some refugees and asylum seekers, will lose Medicaid eligibility beginning Oct. 1, 2026.
A preliminary report from the Minnesota Department of Human Services estimates that about 140,000 Minnesotans could lose health care coverage over the next decade due to Medicaid cuts.
Many of the changes will take effect next year, adding pressure on lawmakers to align Minnesota’s policies with federal law. Lawmakers met privately with Gov. Tim Walz multiple times this week to discuss HCMC and Medicaid rollbacks as pressure mounts ahead of the end of the legislative session on May 18.
Though HCMC’s financial instability is more severe than that of other providers statewide, Malcolm said conversations with providers show they are heading in the same direction.
“We cannot advocate for just a continuation of the status quo with more revenue,” Malcolm said. “We need to think big and think boldly about new models.”
Report for Minnesota is a project of the University of Minnesota’s Hubbard School of Journalism and Mass Communication to support local news across the state.
