On HCMC’s Financial Pressures and the Sales-Tax Solution for Dedicated Revenue
On April 7, bills were introduced in the House and the Senate (HF 4841/SF 4986) to provide dedicated revenue for HCMC by repurposing the ballpark sales tax, which is currently a 0.15% tax on most monies spent in Hennepin County, and making it a 1% tax. This would raise approximately $342 million in public revenues annually.
The current ballpark sales tax is on track to conclude earlier than expected because of Hennepin County’s good financial management. In fact, paired with Hennepin’s history of strong financial oversight, dedicated revenue via a repurposed 1% sales tax is the best way to ensure HCMC is open for generations to come.
Why HCMC is “Losing Money”
Across the country, hospital finances are becoming more and more unsustainable for safety-net hospitals. HCMC is facing many structural financial issues:
Uncompensated care costs are increasing because fewer people have access to insurance. In 2020, HCMC provided $40M of uncompensated care but that increased to $104M in 2024. Approximately 24% of those costs are incurred when serving residents who live outside of Hennepin County.
HR1 (passed in 2025) is changing how hospitals get paid for serving Medicaid patients.In fact, we estimate that HCMC will lose $1.7 billion just in Medicaid revenue over the next decade - impacting patients, workers, and families.
The end of the public health emergency in 2023 also ended presumptive eligibility for Medicaid. This means thousands of people across Minnesota have lost their insurance coverage, resulting in higher costs for hospitals.
UCare’s dissolution leaves HCMC with as much as $115M in debt that will not be repaid.
How Hennepin is Supporting HCMC Financially
HCMC is the very last public safety-net hospital in the upper Midwest. This means that no matter who you are, whether you have health insurance, or how you arrive at our doors, we’ll do our very best to take care of you. Hennepin County is supporting HCMC financially with a goal to immediately stabilize operations:
Hennepin property taxpayers currently provide $38M/year to offset a portion of the increasing costs of uncompensated care.
The County has provided additional funding for capital projects, medical equipment, and IT hardware.
Hennepin County is also supporting HCMC with capital support, which includes over $30M in asset preservation to maintain aging buildings so patients can be seen.
Hennepin County is committed to supporting HCMC through the end of May, but we do not have the money to cover HCMC for the $126.4M we would need to backfill by the end of the year. Every $11M would be the equivalent of a 1% increase in the property tax levy and Commissioners know Hennepin residents can’t afford such enormous property tax increases. Hennepin County cannot solve systemic issues of healthcare funding on our own.
Progress and Next Steps
Hennepin County Commissioners and staff leaders are working with legislative leaders right now about securing HCMC’s financial future. On Thursday, April 9, Chair Gomez held a hearing in the House Taxes Committee on the county’s proposal to repurpose the ballpark sales tax to support dedicated revenue for HCMC. The hearing room was full of supporters who know HCMC must survive. Twenty individuals testified in support of the legislation. Many of these testifiers included HCMC workers and patients, who gave powerful comments about HCMC’s importance for the region and their families.
While earnest and thoughtful conversations are ongoing, legislators benefit from hearing about the importance of HCMC and the impact the institution has on patients, workers, and residents. Our ability to provide care to future generations of Hennepin residents depends on whether and how we meet this moment that is front of us. I encourage you to contact your legislators and the Governor’s office to communicate your support for a stable financial future for HCMC and encourage them to support HF 4841/SF 4986.