ST. PAUL -- Minnesota already is on track to establish a new way for its residents to buy health insurance, and now legislators are poised to change how the state takes care of its elderly, disabled and poor.

Senators debated late Thursday their plan to spend $11.2 billion in the next two years for health care, which is second only to public school funding in the $38 billion state budget.

The plan by Sen. Tony Lourey, DFL-Kerrick, builds on the federal Affordable Care Act, also known as Obamacare. State leaders this year established a federally required online health insurance sales program, which in several ways is tied to the Lourey bill.

Lourey said he was disappointed when handed a spending target $150 million less than in the current budget. "It was much lower than I was hoping for."

However, he said, his committee was able to craft a bill that cuts no state-provided health care.

"We raised some revenue in innovative ways," he said, including gaining $80 million by adding a surcharge on HMO revenues.

The bill would increase rates for nursing homes and other long-term care programs by 2 percent in 2015.

Republicans said Lourey's bill does too little to help nursing homes and other long-term care programs.

The long-term care industry says it would be better off with current law, said Sen. Julie Rosen, R-Fairmont.

Some of the 115-plus nursing homes in financial crisis could be forced to close, Rosen said. "It's going to be very, very tough."

Besides not providing enough money, the bill does not give nursing home administrators flexibility they need to make good decisions, she added. "We are tying their hands. ... It is going to be more expensive to do business."

Senators voted down a proposal 35-28 to give health care workers a 5 percent pay increase by taking money from other programs.

Sen. David Brown, R-Becker, said many lawmakers voted themselves a 35 percent pay raise, but "it is not too much to ask" to give nursing home and other workers more money.

Several other GOP attempts to raise nursing home pay also failed.

Rural legislators, including in the House, where a similar bill passed earlier this week, say nursing homes often are the biggest employers in their districts. If they close, communities will be hurt, they say.

Among the biggest changes Lourey's bill would make is in MinnesotaCare, which provides state-subsidized health insurance to those who otherwise could not afford it. The bill would use federal cash to pay for up to 85 percent of the program.

Lourey would remove an existing $10,000 MNCare cap on hospital costs and cut premiums in half.

The bill also would:

-- Require new rates to be established so nursing homes are paid closer to their actual costs than happens under current law.

-- Increase funds available for dental services received by the poor.

-- Pay child care providers involved in several programs 2 percent more in the next two years.

Senators voted 37-27 to turn down Sen. Torrey Westrom's attempt to remove a provision that would require that day care providers only place babies on their backs to sleep.

"What we are telling the public is they are not competent to raise their children," Senate Minority Leader David Hann, R-Eden Prairie, said about the provision in Lourey's bill.

Westrom, R-Elbow Lake, said there are times when children should be placed in other positions, but the bill would not allow that.

Led by the Democratic Senate majority, a provision to license abortion clinics was rejected 35-30. However, the provision is in a House bill, so it remains alive.

The proposal by Sen. Michelle Fischbach, R-Paynesville, would have required clinics that perform more than 10 abortions a year to obtain a state license.

Lourey said the Health Department reports that "there is sufficient oversight of the clinics. ... There is no evidence of poor quality or unsafe procedures being conducted in Minnesota."