People will die and suffer greatly if the state decides to reduce the rate it reimburses Medicaid providers, ends targeted case management and makes other cuts, according to more than 100 people who begged a state legislative committee to continue its objection to plans by the state health department to lower its budget.

“If my children were not getting these services, my son would be in (juvenile detention) or the state hospital. My daughter would be the same or possibly dead, and if she were dead I’d be in the state hospital,” said Libby Velde, of Missoula. “There has got to be another area in our budget that can fluctuate without such a dire consequence to every single Montana citizen.”

The proposed rate drop and other cuts are because of a one-two budgeting punch the Department of Public Health and Human Services is facing. It first saw its overall budget reduced by the state Legislature this spring, and now faces additional cuts under a law, Senate Bill 261, passed in April. That legislation triggers more reductions because revenue came in lower than projected.

The hearing came as more than 175 Montanans, many of them disabled, rallied in front of the Capitol in protest of the cuts before coming in to testify. Amid signs that read “Disability is not a choice, discrimination is” and “Our homes, not nursing homes,” rally goers told personal stories of the positive impact of direct care programs now in jeopardy.

Monday’s hearing was the result of an objection to the cuts in July by the legislative committee that oversees the department. The Children, Families, Health and Human Services interim committee said the cuts did not meet legislative intent and, with their objection, essentially put a six-month hold on the process. The department has countered by saying the delay will only deepen its final cuts because it prolongs the period it pays a higher rate.

The department must come up with $8.6 million in state dollar savings because of cuts triggered by the weak revenue. To do that requires a drop in the rates paid to almost all Medicaid providers in the state, plus massive reductions in targeted case management and services for people with developmental disabilities. The health department initially proposed a 3.47 percent rate, but Monday said it found other places to cut and now proposes to reduce the rate 2.99 percent.

Amid a dismal year for state revenues, agencies across government also announced potential further cuts of up to 10 percent Friday. Those deeper cuts could outright end some programs slated for cuts now, such as some targeted case management and early childhood intervention. The committee did not develop the 10 percent cuts, which came from the health department at the request of Gov. Steve Bullock, and has no control over them. Two other legislative committees can make recommendations on the cuts and it's up to Bullock to ultimately decide what happens unless a special session of the legislature is called.

After the committee voted 7-1 to informally continue its objection and have a lawyer draft a formal objection to review at a November meeting, the health department released a statement from its director saying it will file the rule putting the 2.99 percent cut in effect as soon as they are able. That would let the 2.99 percent cut take effect in January. It's unclear what would happen if the committee files a formal objection. A legislative document says the committee can make a formal objection, which would delay the rule until the end of the next legislative session. But the committee may only make a formal objection if the rule violates specific provisions of the Montana Administrative Procedure Act.

"The objection today does not overrule the bill passed by the Legislature which mandated these cuts and in fact makes the department's job much more difficult as the state faces additional proposed spending reductions. We hope the same legislators who objected to these cuts today will work with the governor to find more responsible solutions in the future," the statement from health department director Sheila Hogan read.

Tyler Stosich said home care services help him stay employed.

“It allows me to get to work, get dressed in the morning, shower and just daily needs that everybody has,” he said. “Without Medicaid and the ability to have this help, I would be in a facility. I wouldn’t be contributing to the community, paying taxes, working or just having a sense of fulfillment with my daily life.”

Some discussion waded into politics, when people who testified said taxes should be raised to pay for services. Democrats and Republicans, in a year when revenues have come in tens of millions below what was projected, have clashed over raising taxes versus cutting spending. Democrats point to several pitches to increase taxes such as the tobacco tax and alcohol tax that failed during the Legislature, while Republicans say state spending has outpaced revenues.

Kerry Dattilo, the chief executive officer with Quality Life Concepts in Great Falls, asked lawmakers to push past politics.

"At what point does taking care of our most vulnerable population become a nonpartisan issue?" she asked.

The Independent Record's Tom Kuglin contributed to this story