1.1 	A bill for an act
1.2 	relating to health; providing for a statewide plan for
1.3 	improving health; requiring health plans to issue
1.4 	coverage to all applicants and charge community rates;
1.5 	developing a secure benefit set for all health plans;
1.6 	creating an income tax deduction for health coverage
1.7 	premiums; requiring all persons to maintain health
1.8 	coverage; amending laws promoting high-quality health
1.9 	care; providing for public information on health care
1.10 	cost and quality; requiring reports; appropriating
1.11 	money; amending Minnesota Statutes 2004, sections
1.12 	145A.12, by adding subdivisions; 290.01, subdivision
1.13 	19b; proposing coding for new law in Minnesota
1.14 	Statutes, chapter 62Q.
1.15 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.16 	ARTICLE 1
1.17 	HEALTHIER MINNESOTANS

1.18 	Section 1. Minnesota Statutes 2004, section 145A.12, is
1.19 	amended by adding a subdivision to read:
1.20 		Subd. 8.Coordinated statewide health improvement action
1.21 	plan. The commissioner, in consultation with a Minnesota Health
1.22 	Improvement Partnership, shall develop and implement a statewide
1.23 	action plan for improving the health status of Minnesotans
1.24 	through strategic and coordinated action of communities,
1.25 	businesses, health care professionals, health care
1.26 	organizations, health plans, schools, and other public and
1.27 	private entities.  The plan must identify up to three of the
1.28 	statewide public health outcomes as determined under subdivision
1.29 	7 and provide for specific steps to be taken that will produce
1.30 	measurable improvements in health status and corresponding
2.1 	reductions in the incidence of disease or injury and related
2.2 	health care costs.  The plan must encourage and facilitate the
2.3 	formation of local public-private partnerships to take action on
2.4 	the statewide goals.

2.5 	Sec. 2. Minnesota Statutes 2004, section 145A.12, is
2.6 	amended by adding a subdivision to read:
2.7 		Subd. 9.Challenge grant fund. The commissioner shall
2.8 	establish a public health challenge grant fund and program to
2.9 	award grants to statewide and local health improvement
2.10 	public-private partnerships to support collaborative actions
2.11 	that will reduce the rate of increase in health care costs
2.12 	through improvements in the health status or the prevention of
2.13 	illness and injury in the population of the state or a local
2.14 	community.  The commissioner shall require grantees to provide
2.15 	an equal match of local funding provided from public or private
2.16 	sources.  Each grant program must include a methodology approved
2.17 	by the commissioner for measuring the impact of the grantees'
2.18 	actions on health care costs incurred by public or private
2.19 	health insurance plans, local public health programs, and health
2.20 	care providers' uncompensated care costs.  Each grant program
2.21 	must include written agreements between participating public and
2.22 	private entities that provide health care services or health
2.23 	coverage under which the entities agree to contribute, to the
2.24 	challenge grant fund, 20 percent of any savings they realize as
2.25 	a result of the program.  The commissioner of human services and
2.26 	the commissioner of employee relations shall agree to enter into
2.27 	agreements with grantees regarding the payment of the 20 percent
2.28 	of savings in their health coverage programs to the challenge
2.29 	grant fund.

2.30 	Sec. 3. COST AND QUALITY DISCLOSURE.
 2.31 	The state agency commissioners serving on the governor's
2.32 	Health Care Cabinet, in cooperation with organizations
2.33 	representing consumers, employers, physicians and other health
2.34 	professionals, hospitals, long-term care facilities, health plan
2.35 	companies, quality improvement organizations, research and
2.36 	education institutions, and other appropriate constituencies,
3.1 	shall identify and contract with a private, nonprofit
3.2 	organization to serve as a statewide source of comparative
3.3 	information on health care costs and quality for both ambulatory
3.4 	and inpatient care.  This organization shall provide statewide
3.5 	comparative information in an easily understood format that
3.6 	promotes comparisons by integrated health care systems,
3.7 	individual medical groups, single physician practices, specialty
3.8 	groups, and hospitals.

3.9 	Sec. 4. APPROPRIATION.
 3.10 	$....... is appropriated from the health care access fund
3.11 	to the commissioner of health for the challenge grant fund under
3.12 	Minnesota Statutes, section 145A.12, subdivision 9, for the
3.13 	fiscal year ending June 30, 2006.  This appropriation shall be
3.14 	repaid from repayments to the challenge grant fund by June 30,
3.15 	2008.

3.16 	Sec. 5. EFFECTIVE DATE.
 3.17 	Sections 1 and 2 are effective July 1, 2005.

3.18 	ARTICLE 2
3.19 	HEALTH INSURANCE REFORM

3.20 	Section 1. [62Q.166] UNIVERSAL HEALTH COVERAGE.
3.21 		Subdivision 1.Requirement of coverage. (a) Effective
3.22 	January 1, 2009, each Minnesota resident shall obtain and
3.23 	maintain health coverage that includes at least the secure
3.24 	benefit set described under section 5.
3.25 	(b) A person who becomes a Minnesota resident must obtain
3.26 	the coverage no later than 90 days after becoming a Minnesota
3.27 	resident.
3.28 	(c) A child must have the coverage at the moment of birth.
3.29 		Subd. 2.Secure benefit set. (a) Every health plan
3.30 	offered, issued, sold, or renewed to cover a Minnesota resident
3.31 	must include the secure benefit set as described under section 5.
3.32 	(b) A health plan may include coverage in addition to the
3.33 	secure benefit set, provided that the additional coverages are
3.34 	provided as optional coverage, for a separately stated premium.
3.35 		Subd. 3.Guaranteed issue. (a) Each health plan company
3.36 	shall offer, sell, issue, or renew the secure benefit set on a
4.1 	guaranteed issue basis, as defined in section 62Q.18,
4.2 	subdivision 1, clause (2).
4.3 	(b) Optional coverages under subdivision 2, paragraph (b),
4.4 	need not be provided on a guaranteed issue basis.
4.5 		Subd. 4.Community rate bands. (a) The premium rate
4.6 	bands for the secure benefit set must not vary based upon health
4.7 	history or status, whether coverage is group or individual,
4.8 	gender, geographic location, purchase of additional coverage, or
4.9 	any other factor except as permitted under paragraph (b).
4.10 	(b) Premium rate bands for the secure benefit set may vary
4.11 	to reflect actuarially valid differences attributable to nonuse
4.12 	of tobacco, compliance with recommended health screenings and
4.13 	preventive care, or other health-promoting behaviors.  Premium
4.14 	rate variations must be in accordance with section 62L.08 and
4.15 	must be approved by the commissioner prior to their use.
4.16 	(c) Paragraphs (a) and (b) do not apply to optional
4.17 	coverage provided as an addition to the secure benefit set.

4.18 	Sec. 2. Minnesota Statutes 2004, section 290.01,
4.19 	subdivision 19b, is amended to read:
4.20 		Subd. 19b.Subtractions from federal taxable income.  For
4.21 	individuals, estates, and trusts, there shall be subtracted from
4.22 	federal taxable income:
4.23 	(1) interest income on obligations of any authority,
4.24 	commission, or instrumentality of the United States to the
4.25 	extent includable in taxable income for federal income tax
4.26 	purposes but exempt from state income tax under the laws of the
4.27 	United States;
4.28 	(2) if included in federal taxable income, the amount of
4.29 	any overpayment of income tax to Minnesota or to any other
4.30 	state, for any previous taxable year, whether the amount is
4.31 	received as a refund or as a credit to another taxable year's
4.32 	income tax liability;
4.33 	(3) the amount paid to others, less the amount used to
4.34 	claim the credit allowed under section 290.0674, not to exceed
4.35 	$1,625 for each qualifying child in grades kindergarten to 6 and
4.36 	$2,500 for each qualifying child in grades 7 to 12, for tuition,
5.1 	textbooks, and transportation of each qualifying child in
5.2 	attending an elementary or secondary school situated in
5.3 	Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin,
5.4 	wherein a resident of this state may legally fulfill the state's
5.5 	compulsory attendance laws, which is not operated for profit,
5.6 	and which adheres to the provisions of the Civil Rights Act of
5.7 	1964 and chapter 363A.  For the purposes of this clause,
5.8 	"tuition" includes fees or tuition as defined in section
5.9 	290.0674, subdivision 1, clause (1).  As used in this clause,
5.10 	"textbooks" includes books and other instructional materials and
5.11 	equipment purchased or leased for use in elementary and
5.12 	secondary schools in teaching only those subjects legally and
5.13 	commonly taught in public elementary and secondary schools in
5.14 	this state.  Equipment expenses qualifying for deduction
5.15 	includes expenses as defined and limited in section 290.0674,
5.16 	subdivision 1, clause (3).  "Textbooks" does not include
5.17 	instructional books and materials used in the teaching of
5.18 	religious tenets, doctrines, or worship, the purpose of which is
5.19 	to instill such tenets, doctrines, or worship, nor does it
5.20 	include books or materials for, or transportation to,
5.21 	extracurricular activities including sporting events, musical or
5.22 	dramatic events, speech activities, driver's education, or
5.23 	similar programs.  For purposes of the subtraction provided by
5.24 	this clause, "qualifying child" has the meaning given in section
5.25 	32(c)(3) of the Internal Revenue Code;
5.26 	(4) income as provided under section 290.0802;
5.27 	(5) to the extent included in federal adjusted gross
5.28 	income, income realized on disposition of property exempt from
5.29 	tax under section 290.491;
5.30 	(6) to the extent included in federal taxable income,
5.31 	postservice benefits for youth community service under section
5.32 	124D.42 for volunteer service under United States Code, title
5.33 	42, sections 12601 to 12604;
5.34 	(7) to the extent not deducted in determining federal
5.35 	taxable income by an individual who does not itemize deductions
5.36 	for federal income tax purposes for the taxable year, an amount
6.1 	equal to 50 percent of the excess of charitable contributions
6.2 	allowable as a deduction for the taxable year under section
6.3 	170(a) of the Internal Revenue Code over $500;
6.4 	(8) for taxable years beginning before January 1, 2008, the
6.5 	amount of the federal small ethanol producer credit allowed
6.6 	under section 40(a)(3) of the Internal Revenue Code which is
6.7 	included in gross income under section 87 of the Internal
6.8 	Revenue Code;
6.9 	(9) for individuals who are allowed a federal foreign tax
6.10 	credit for taxes that do not qualify for a credit under section
6.11 	290.06, subdivision 22, an amount equal to the carryover of
6.12 	subnational foreign taxes for the taxable year, but not to
6.13 	exceed the total subnational foreign taxes reported in claiming
6.14 	the foreign tax credit.  For purposes of this clause, "federal
6.15 	foreign tax credit" means the credit allowed under section 27 of
6.16 	the Internal Revenue Code, and "carryover of subnational foreign
6.17 	taxes" equals the carryover allowed under section 904(c) of the
6.18 	Internal Revenue Code minus national level foreign taxes to the
6.19 	extent they exceed the federal foreign tax credit;
6.20 	(10) in each of the five tax years immediately following
6.21 	the tax year in which an addition is required under subdivision
6.22 	19a, clause (7), an amount equal to one-fifth of the delayed
6.23 	depreciation.  For purposes of this clause, "delayed
6.24 	depreciation" means the amount of the addition made by the
6.25 	taxpayer under subdivision 19a, clause (7), minus the positive
6.26 	value of any net operating loss under section 172 of the
6.27 	Internal Revenue Code generated for the tax year of the
6.28 	addition.  The resulting delayed depreciation cannot be less
6.29 	than zero; and 
6.30 	(11) job opportunity building zone income as provided under
6.31 	section 469.316; and 
6.32 	(12) to the extent not deducted in determining federal
6.33 	taxable income, amounts paid for health coverage described as
6.34 	the secure benefit set under section 5.

6.35 	Sec. 3. DESIGN OF HEALTH REINSURANCE POOL.
 6.36 	The commissioner of commerce shall, no later than November
7.1 	15, 2005, present to the legislature a plan for reactivating the
7.2 	reinsurance pool established under Minnesota Statutes, sections
7.3 	62L.13 to 62L.23, and converting it to a reinsurance pool for
7.4 	high-cost cases in the entire individual and group market in
7.5 	this state.

7.6 	Sec. 4. ENFORCEMENT OF COVERAGE REQUIREMENT.
 7.7 	The commissioner of health shall prepare and submit to the
7.8 	legislature by December 15, 2005, a report with recommendations
7.9 	and proposed legislation for enforcing the requirement that all
7.10 	individuals maintain continuous health coverage under Minnesota
7.11 	Statutes, section 62Q.166, subdivision 1.  In preparing the
7.12 	report, the commissioner shall consider whether to require
7.13 	evidence of coverage for applying for a driver's license,
7.14 	registering for school, or filing state income tax returns.

7.15 	Sec. 5. SECURE BENEFIT SET DESIGN.
 7.16 	The commissioners of health, human services, labor and
7.17 	industry, employee relations, corrections, commerce, and
7.18 	administration and the Minnesota Comprehensive Health
7.19 	Association board of directors, in consultation with a panel of
7.20 	health care providers and health care policy experts, shall
7.21 	define a secure benefit set that includes coverage for
7.22 	preventive health services, as specified in preventive services
7.23 	guidelines for children and adults developed by the Institute
7.24 	for Clinical Systems Improvement, prescription drug coverage,
7.25 	and catastrophic health coverage.  The commissioners shall
7.26 	submit the defined secure benefit set to the legislature by
7.27 	January 15, 2006.

7.28 	Sec. 6. EFFECTIVE DATE.
 7.29 	Sections 1 and 2 are effective January 1, 2007.  Sections
7.30 	3, 4, and 5 are effective July 1, 2005.