1.1 	A bill for an act
1.2 	relating to the operation of state government; making changes to health and 
1.3 	human services programs and policy; making changes to health policy to comply 
1.4 	with federal law; modifying long-term care provisions; modifying treatment 
1.5 	of asset recovery for medical assistance eligibility; requiring evidence of 
1.6 	citizenship or nationality for qualified noncitizens; modifying the treatment of 
1.7 	payment of benefits from an annuity; making changes to children and families 
1.8 	policy to comply with federal law; modifying treatment of MFIP expenditures; 
1.9 	allowing waiver of administrative costs under MFIP; imposing an annual federal 
1.10 	collections fee; making supplemental appropriations and budget reductions; 
1.11 	establishing the Pharmacy Payment Reform Advisory Committee;amending 
1.12 	Minnesota Statutes 2004, sections 62A.045; 62S.05, by adding a subdivision; 
1.13 	62S.08, subdivision 3; 62S.081, subdivision 4; 62S.10, subdivision 2; 62S.13, 
1.14 	by adding a subdivision; 62S.14, subdivision 2; 62S.15; 62S.20, subdivision 1; 
1.15 	62S.24, subdivisions 1, 3, 4, by adding subdivisions; 62S.25, subdivision 6, by 
1.16 	adding a subdivision; 62S.26; 62S.266, subdivision 2; 62S.29, subdivision 1; 
1.17 	62S.30; 144.6501, subdivision 6; 256B.02, subdivision 9; 256B.056, subdivision 
1.18 	2, by adding subdivisions; 256B.0595, subdivisions 1, 3, 4; 256B.76; 256J.021; 
1.19 	256J.626, subdivision 2; 256L.04, subdivision 10; 518.551, subdivision 
1.20 	7; Minnesota Statutes 2005 Supplement, sections 256B.0571; 256B.0595, 
1.21 	subdivision 2; 256B.06, subdivision 4; 256D.03, subdivision 3; proposing coding 
1.22 	for new law in Minnesota Statutes, chapters 62S; 256B; repealing Minnesota 
1.23 	Statutes 2005 Supplement, section 256B.0571, subdivisions 2, 5, 11.
1.24 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.25 	ARTICLE 1
1.26 	HEALTH CARE FEDERAL COMPLIANCE

1.27 	Section 1. Minnesota Statutes 2004, section 62A.045, is amended to read:
1.28 	62A.045 PAYMENTS ON BEHALF OF ENROLLEES IN GOVERNMENT 
1.29 	HEALTH PROGRAMS.
1.30 	(a) As a condition of doing business in Minnesota, each health insurer shall comply 
1.31 	with the requirements of the federal Deficit Reduction Act of 2005, Public Law 109-171, 
2.1 	including any federal regulations adopted under that act, to the extent that it imposes a 
2.2 	requirement that applies in this state and that is not also required by the laws of this state. 
2.3 	This section does not require compliance with any provision of the federal act prior to 
2.4 	the effective date provided for that provision in the federal act. The commissioner shall 
2.5 	enforce this section.
2.6 	"Health insurer" for the purpose of this section includes self-insured plans, group 
2.7 	health plans (as defined in section 607(1) of the Employee Retirement Income Security 
2.8 	Act of 1974), service benefit plans, managed care organizations, pharmacy benefit 
2.9 	managers, or other parties that are by contract legally responsible to pay a claim for a 
2.10 	healthcare item or service for an individual receiving benefits under paragraph (b).
2.11 	(b) No health plan issued or renewed to provide coverage to a Minnesota resident 
2.12 	shall contain any provision denying or reducing benefits because services are rendered to a 
2.13 	person who is eligible for or receiving medical benefits pursuant to title XIX of the Social 
2.14 	Security Act (Medicaid) in this or any other state; chapter 256; 256B; or 256D or services 
2.15 	pursuant to section  252.27;  256L.01 to  256L.10;  260B.331, subdivision 2;  260C.331, 
2.16 	subdivision 2; or  393.07, subdivision 1 or 2. No health carrier providing benefits under 
2.17 	plans covered by this section shall use eligibility for medical programs named in this 
2.18 	section as an underwriting guideline or reason for nonacceptance of the risk. 
2.19 	(b) (c) If payment for covered expenses has been made under state medical programs 
2.20 	for health care items or services provided to an individual, and a third party has a legal 
2.21 	liability to make payments, the rights of payment and appeal of an adverse coverage 
2.22 	decision for the individual, or in the case of a child their responsible relative or caretaker, 
2.23 	will be subrogated to the state agency. The state agency may assert its rights under this 
2.24 	section within three years of the date the service was rendered. For purposes of this 
2.25 	section, "state agency" includes prepaid health plans under contract with the commissioner 
2.26 	according to sections  256B.69,  256D.03, subdivision 4, paragraph (c), and  256L.12; 
2.27 	children's mental health collaboratives under section  245.493; demonstration projects for 
2.28 	persons with disabilities under section  256B.77; nursing homes under the alternative 
2.29 	payment demonstration project under section  256B.434; and county-based purchasing 
2.30 	entities under section  256B.692. 
2.31 	(c) (d) Notwithstanding any law to the contrary, when a person covered by a health 
2.32 	plan receives medical benefits according to any statute listed in this section, payment for 
2.33 	covered services or notice of denial for services billed by the provider must be issued 
2.34 	directly to the provider. If a person was receiving medical benefits through the Department 
2.35 	of Human Services at the time a service was provided, the provider must indicate this 
2.36 	benefit coverage on any claim forms submitted by the provider to the health carrier for 
3.1 	those services. If the commissioner of human services notifies the health carrier that 
3.2 	the commissioner has made payments to the provider, payment for benefits or notices 
3.3 	of denials issued by the health carrier must be issued directly to the commissioner. 
3.4 	Submission by the department to the health carrier of the claim on a Department of 
3.5 	Human Services claim form is proper notice and shall be considered proof of payment of 
3.6 	the claim to the provider and supersedes any contract requirements of the health carrier 
3.7 	relating to the form of submission. Liability to the insured for coverage is satisfied to the 
3.8 	extent that payments for those benefits are made by the health carrier to the provider or the 
3.9 	commissioner as required by this section.
3.10 	(d) (e) When a state agency has acquired the rights of an individual eligible for 
3.11 	medical programs named in this section and has health benefits coverage through a 
3.12 	health carrier, the health carrier shall not impose requirements that are different from 
3.13 	requirements applicable to an agent or assignee of any other individual covered.
3.14 	(e) (f) For the purpose of this section, health plan includes coverage offered by 
3.15 	community integrated service networks, any plan governed under the federal Employee 
3.16 	Retirement Income Security Act of 1974 (ERISA), United States Code, title 29, sections 
3.17 	1001 to 1461, and coverage offered under the exclusions listed in section  62A.011, 
3.18 	subdivision 3, clauses (2), (6), (9), (10), and (12). 

3.19 	Sec. 2. Minnesota Statutes 2004, section 62S.05, is amended by adding a subdivision 
3.20 	to read:
3.21 		Subd. 4.Extension of limitation periods. The commissioner may extend the 
3.22 	limitation periods set forth in subdivisions 1 and 2 as to specific age group categories in 
3.23 	specific policy forms upon finding that the extension is in the best interest of the public. 

3.24 	EFFECTIVE DATE. This section is effective July 1, 2006.

3.25 	Sec. 3. Minnesota Statutes 2004, section 62S.08, subdivision 3, is amended to read:
3.26 		Subd. 3.Mandatory format. The following standard format outline of coverage 
3.27 	must be used, unless otherwise specifically indicated:
3.28 	COMPANY NAME
3.29 	ADDRESS - CITY AND STATE
3.30 	TELEPHONE NUMBER
3.31 	LONG-TERM CARE INSURANCE
3.32 	OUTLINE OF COVERAGE
3.33 	Policy Number or Group Master Policy and Certificate Number
4.1 	(Except for policies or certificates which are guaranteed issue, the following caution 
4.2 	statement, or language substantially similar, must appear as follows in the outline of 
4.3 	coverage.)
4.4 	CAUTION: The issuance of this long-term care insurance (policy) (certificate) 
4.5 	is based upon your responses to the questions on your application. A copy of your 
4.6 	(application) (enrollment form) (is enclosed) (was retained by you when you applied). 
4.7 	If your answers are incorrect or untrue, the company has the right to deny benefits or 
4.8 	rescind your policy. The best time to clear up any questions is now, before a claim 
4.9 	arises. If, for any reason, any of your answers are incorrect, contact the company at this 
4.10 	address: (insert address).
4.11 	(1) This policy is (an individual policy of insurance) (a group policy) which was 
4.12 	issued in the (indicate jurisdiction in which group policy was issued).
4.13 	(2) PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides 
4.14 	a very brief description of the important features of the policy. You should compare 
4.15 	this outline of coverage to outlines of coverage for other policies available to you. This 
4.16 	is not an insurance contract, but only a summary of coverage. Only the individual or 
4.17 	group policy contains governing contractual provisions. This means that the policy or 
4.18 	group policy sets forth in detail the rights and obligations of both you and the insurance 
4.19 	company. Therefore, if you purchase this coverage, or any other coverage, it is important 
4.20 	that you READ YOUR POLICY (OR CERTIFICATE) CAREFULLY.
4.21 	(3) THIS PLAN IS INTENDED TO BE A QUALIFIED LONG-TERM CARE 
4.22 	INSURANCE CONTRACT AS DEFINED UNDER SECTION 7702(B)(b) OF THE 
4.23 	INTERNAL REVENUE CODE OF 1986.
4.24 	(4) TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE 
4.25 	CONTINUED IN FORCE OR DISCONTINUED.
4.26 	(a) (For long-term care health insurance policies or certificates describe one of the 
4.27 	following permissible policy renewability provisions:)
4.28 	(1) (Policies and certificates that are guaranteed renewable shall contain the 
4.29 	following statement:) RENEWABILITY: THIS POLICY (CERTIFICATE) IS 
4.30 	GUARANTEED RENEWABLE. This means you have the right, subject to the terms of 
4.31 	your policy, (certificate) to continue this policy as long as you pay your premiums on time. 
4.32 	(Company name) cannot change any of the terms of your policy on its own, except that, in 
4.33 	the future, IT MAY INCREASE THE PREMIUM YOU PAY.
4.34 	(2) (Policies and certificates that are noncancelable shall contain the following 
4.35 	statement:) RENEWABILITY: THIS POLICY (CERTIFICATE) IS NONCANCELABLE. 
4.36 	This means that you have the right, subject to the terms of your policy, to continue this 
5.1 	policy as long as you pay your premiums on time. (Company name) cannot change any 
5.2 	of the terms of your policy on its own and cannot change the premium you currently 
5.3 	pay. However, if your policy contains an inflation protection feature where you choose 
5.4 	to increase your benefits, (company name) may increase your premium at that time for 
5.5 	those additional benefits.
5.6 	(b) (For group coverage, specifically describe continuation/conversion provisions 
5.7 	applicable to the certificate and group policy.)
5.8 	(c) (Describe waiver of premium provisions or state that there are not such 
5.9 	provisions.)
5.10 	(5) TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS. 
5.11 	(In bold type larger than the maximum type required to be used for the other 
5.12 	provisions of the outline of coverage, state whether or not the company has a right to 
5.13 	change the premium and, if a right exists, describe clearly and concisely each circumstance 
5.14 	under which the premium may change.)
5.15 	(6) TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE 
5.16 	RETURNED AND PREMIUM REFUNDED.
5.17 	(a) (Provide a brief description of the right to return -- "free look" provision of 
5.18 	the policy.)
5.19 	(b) (Include a statement that the policy either does or does not contain provisions 
5.20 	providing for a refund or partial refund of premium upon the death of an insured or 
5.21 	surrender of the policy or certificate. If the policy contains such provisions, include a 
5.22 	description of them.)
5.23 	(5)(7) THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are 
5.24 	eligible for Medicare, review the Medicare Supplement Buyer's Guide available from 
5.25 	the insurance company.
5.26 	(a) (For agents) neither (insert company name) nor its agents represent Medicare, the 
5.27 	federal government, or any state government.
5.28 	(b) (For direct response) (insert company name) is not representing Medicare, the 
5.29 	federal government, or any state government.
5.30 	(6)(8) LONG-TERM CARE COVERAGE. Policies of this category are designed to 
5.31 	provide coverage for one or more necessary or medically necessary diagnostic, preventive, 
5.32 	therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting 
5.33 	other than an acute care unit of a hospital, such as in a nursing home, in the community, 
5.34 	or in the home.
5.35 	This policy provides coverage in the form of a fixed dollar indemnity benefit for 
5.36 	covered long-term care expenses, subject to policy (limitations), (waiting periods), and 
6.1 	(coinsurance) requirements. (Modify this paragraph if the policy is not an indemnity 
6.2 	policy.)
6.3 	(7)(9) BENEFITS PROVIDED BY THIS POLICY.
6.4 	(a) (Covered services, related deductible(s), waiting periods, elimination periods, 
6.5 	and benefit maximums.)
6.6 	(b) (Institutional benefits, by skill level.)
6.7 	(c) (Noninstitutional benefits, by skill level.)
6.8 	(d) (Eligibility for payment of benefits.)
6.9 	(Activities of daily living and cognitive impairment shall be used to measure an 
6.10 	insured's need for long-term care and must be defined and described as part of the outline 
6.11 	of coverage.)
6.12 	(Any benefit screens must be explained in this section. If these screens differ for 
6.13 	different benefits, explanation of the screen should accompany each benefit description. If 
6.14 	an attending physician or other specified person must certify a certain level of functional 
6.15 	dependency in order to be eligible for benefits, this too must be specified. If activities of 
6.16 	daily living (ADLs) are used to measure an insured's need for long-term care, then these 
6.17 	qualifying criteria or screens must be explained.)
6.18 	(8)(10) LIMITATIONS AND EXCLUSIONS:
6.19 	Describe:
6.20 	(a) preexisting conditions;
6.21 	(b) noneligible facilities/provider;
6.22 	(c) noneligible levels of care (e.g., unlicensed providers, care or treatment provided 
6.23 	by a family member, etc.);
6.24 	(d) exclusions/exceptions; and
6.25 	(e) limitations.
6.26 	(This section should provide a brief specific description of any policy provisions 
6.27 	which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify 
6.28 	payment of the benefits described in paragraph (6) (8).)
6.29 	THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH 
6.30 	YOUR LONG-TERM CARE NEEDS.
6.31 	(9)(11) RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs 
6.32 	of long-term care services will likely increase over time, you should consider whether and 
6.33 	how the benefits of this plan may be adjusted. As applicable, indicate the following:
6.34 	(a) that the benefit level will not increase over time;
6.35 	(b) any automatic benefit adjustment provisions;
7.1 	(c) whether the insured will be guaranteed the option to buy additional benefits and 
7.2 	the basis upon which benefits will be increased over time if not by a specified amount 
7.3 	or percentage;
7.4 	(d) if there is such a guarantee, include whether additional underwriting or health 
7.5 	screening will be required, the frequency and amounts of the upgrade options, and any 
7.6 	significant restrictions or limitations; and
7.7 	(e) whether there will be any additional premium charge imposed and how that 
7.8 	is to be calculated.
7.9 	(10)(12) ALZHEIMER'S DISEASE AND OTHER ORGANIC BRAIN 
7.10 	DISORDERS. (State that the policy provides coverage for insureds clinically diagnosed as 
7.11 	having Alzheimer's disease or related degenerative and dementing illnesses. Specifically, 
7.12 	describe each benefit screen or other policy provision which provides preconditions to the 
7.13 	availability of policy benefits for such an insured.)
7.14 	(11)(13) PREMIUM.
7.15 	(a) State the total annual premium for the policy.
7.16 	(b) If the premium varies with an applicant's choice among benefit options, indicate 
7.17 	the portion of annual premium which corresponds to each benefit option.
7.18 	(12)(14) ADDITIONAL FEATURES.
7.19 	(a) Indicate if medical underwriting is used.
7.20 	(b) Describe other important features.
7.21 	(15) CONTACT THE STATE DEPARTMENT OF COMMERCE OR SENIOR 
7.22 	LINKAGE LINE IF YOU HAVE GENERAL QUESTIONS REGARDING LONG-TERM 
7.23 	CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF YOU HAVE 
7.24 	SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE 
7.25 	POLICY OR CERTIFICATE.

7.26 	EFFECTIVE DATE. This section is effective July 1, 2006.

7.27 	Sec. 4. Minnesota Statutes 2004, section 62S.081, subdivision 4, is amended to read:
7.28 		Subd. 4.Forms. An insurer shall use the forms in Appendices B (Personal 
7.29 	Worksheet) and F (Potential Rate Increase Disclosure Form) of the Long-term Care 
7.30 	Insurance Model Regulation adopted by the National Association of Insurance 
7.31 	Commissioners to comply with the requirements of subdivisions 1 and 2.

7.32 	EFFECTIVE DATE. This section is effective July 1, 2006.

7.33 	Sec. 5. Minnesota Statutes 2004, section 62S.10, subdivision 2, is amended to read:
8.1 		Subd. 2.Contents. The summary must include the following information:
8.2 	(1) an explanation of how the long-term care benefit interacts with other components 
8.3 	of the policy, including deductions from death benefits;
8.4 	(2) an illustration of the amount of benefits, the length of benefits, and the guaranteed 
8.5 	lifetime benefits, if any, for each covered person; and
8.6 	(3) any exclusions, reductions, and limitations on benefits of long-term care; and
8.7 	(4) a statement that any long-term care inflation protection option required by section 
8.8 	62S.23 is not available under this policy. 

8.9 	EFFECTIVE DATE. This section is effective July 1, 2006.

8.10 	Sec. 6. Minnesota Statutes 2004, section 62S.13, is amended by adding a subdivision 
8.11 	to read:
8.12 		Subd. 6.Death of insured. In the event of the death of the insured, this section shall 
8.13 	not apply to the remaining death benefit of a life insurance policy that accelerates benefits 
8.14 	for long-term care. In this situation, the remaining death benefits under these policies shall 
8.15 	be governed by section 61A.03, subdivision 1, paragraph (c). In all other situations, this 
8.16 	section shall apply to life insurance policies that accelerate benefits for long-term care. 

8.17 	EFFECTIVE DATE. This section is effective July 1, 2006.

8.18 	Sec. 7. Minnesota Statutes 2004, section 62S.14, subdivision 2, is amended to read:
8.19 		Subd. 2.Terms. The terms "guaranteed renewable" and "noncancelable" may not 
8.20 	be used in an individual long-term care insurance policy without further explanatory 
8.21 	language that complies with the disclosure requirements of section  62S.20. The term 
8.22 	"level premium" may only be used when the insurer does not have the right to change 
8.23 	the premium. 

8.24 	EFFECTIVE DATE. This section is effective July 1, 2006.

8.25 	Sec. 8. Minnesota Statutes 2004, section 62S.15, is amended to read:
8.26 	62S.15 AUTHORIZED LIMITATIONS AND EXCLUSIONS.
8.27 	No policy may be delivered or issued for delivery in this state as long-term care 
8.28 	insurance if the policy limits or excludes coverage by type of illness, treatment, medical 
8.29 	condition, or accident, except as follows:
8.30 	(1) preexisting conditions or diseases;
9.1 	(2) mental or nervous disorders; except that the exclusion or limitation of benefits on 
9.2 	the basis of Alzheimer's disease is prohibited;
9.3 	(3) alcoholism and drug addiction;
9.4 	(4) illness, treatment, or medical condition arising out of war or act of war; 
9.5 	participation in a felony, riot, or insurrection; service in the armed forces or auxiliary 
9.6 	units; suicide, attempted suicide, or intentionally self-inflicted injury; or non-fare-paying 
9.7 	aviation; and
9.8 	(5) treatment provided in a government facility unless otherwise required by 
9.9 	law, services for which benefits are available under Medicare or other government 
9.10 	program except Medicaid, state or federal workers' compensation, employer's liability 
9.11 	or occupational disease law, motor vehicle no-fault law; services provided by a member 
9.12 	of the covered person's immediate family; and services for which no charge is normally 
9.13 	made in the absence of insurance; and 
9.14 	(6) expenses for services or items available or paid under another long-term care 
9.15 	insurance or health insurance policy.
9.16 	This subdivision does not prohibit exclusions and limitations by type of provider or 
9.17 	territorial limitations.

9.18 	EFFECTIVE DATE. This section is effective July 1, 2006.

9.19 	Sec. 9. Minnesota Statutes 2004, section 62S.20, subdivision 1, is amended to read:
9.20 		Subdivision 1.Renewability. (a) Individual long-term care insurance policies 
9.21 	must contain a renewability provision that is appropriately captioned, appears on the first 
9.22 	page of the policy, and clearly states the duration, where limited, of renewability and the 
9.23 	duration of the term of coverage for which the policy is issued and for which it may be 
9.24 	renewed that the coverage is guaranteed renewable or noncancelable. This subdivision 
9.25 	does not apply to policies which are part of or combined with life insurance policies 
9.26 	which do not contain a renewability provision and under which the right to nonrenew is 
9.27 	reserved solely to the policyholder.
9.28 	(b) A long-term care insurance policy or certificate, other than one where the insurer 
9.29 	does not have the right to change the premium, shall include a statement that premium 
9.30 	rates may change. 

9.31 	EFFECTIVE DATE. This section is effective July 1, 2006.

9.32 	Sec. 10. Minnesota Statutes 2004, section 62S.24, subdivision 1, is amended to read:
10.1 		Subdivision 1.Required questions. An application form must include the following 
10.2 	questions designed to elicit information as to whether, as of the date of the application, the 
10.3 	applicant has another long-term care insurance policy or certificate in force or whether a 
10.4 	long-term care policy or certificate is intended to replace any other accident and sickness 
10.5 	or long-term care policy or certificate presently in force. A supplementary application 
10.6 	or other form to be signed by the applicant and agent, except where the coverage is sold 
10.7 	without an agent, containing the following questions may be used. If a replacement policy 
10.8 	is issued to a group as defined under section   62S.01, subdivision 15, clause (1), the 
10.9 	following questions may be modified only to the extent necessary to elicit information 
10.10 	about long-term care insurance policies other than the group policy being replaced; 
10.11 	provided, however, that the certificate holder has been notified of the replacement: 
10.12 	(1)  do you have another long-term care insurance policy or certificate in force
10.13 	(including health care service contract or health maintenance organization contract)?;
10.14 	(2) did you have another long-term care insurance policy or certificate in force 
10.15 	during the last 12 months?;
10.16 	(i) if so, with which company?; and
10.17 	(ii) if that policy lapsed, when did it lapse?; and
10.18 	(3) are you covered by Medicaid?; and 
10.19 	(4) do you intend to replace any of your medical or health insurance coverage with 
10.20 	this policy (certificate)?

10.21 	EFFECTIVE DATE. This section is effective July 1, 2006.

10.22 	Sec. 11. Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision 
10.23 	to read:
10.24 		Subd. 1a.Other health insurance policies sold by agent. Agents shall list all other 
10.25 	health insurance policies they have sold to the applicant that are still in force or were sold 
10.26 	in the past five years and are no longer in force. 

10.27 	EFFECTIVE DATE. This section is effective July 1, 2006.

10.28 	Sec. 12. Minnesota Statutes 2004, section 62S.24, subdivision 3, is amended to read:
10.29 		Subd. 3.Solicitations other than direct response. After determining that a 
10.30 	sale will involve replacement, an insurer, other than an insurer using direct response 
10.31 	solicitation methods or its agent, shall furnish the applicant, before issuance or delivery of 
10.32 	the individual long-term care insurance policy, a notice regarding replacement of accident 
10.33 	and sickness or long-term care coverage. One copy of the notice must be retained by the 
11.1 	applicant and an additional copy signed by the applicant must be retained by the insurer. 
11.2 	The required notice must be provided in the following manner:
11.3 	NOTICE TO APPLICANT REGARDING REPLACEMENT OF
11.4 	INDIVIDUAL ACCIDENT AND SICKNESS OR LONG-TERM 
11.5 	CARE INSURANCE
11.6 	(Insurance company's name and address)
11.7 	SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.
11.8 	According to (your application) (information you have furnished), you intend to 
11.9 	lapse or otherwise terminate existing accident and sickness or long-term care insurance 
11.10 	and replace it with an individual long-term care insurance policy to be issued by (company 
11.11 	name) insurance company. Your new policy provides 30 days within which you may 
11.12 	decide, without cost, whether you desire to keep the policy. For your own information and 
11.13 	protection, you should be aware of and seriously consider certain factors which may affect 
11.14 	the insurance protection available to you under the new policy.
11.15 	You should review this new coverage carefully, comparing it with all accident 
11.16 	and sickness or long-term care insurance coverage you now have, and terminate your 
11.17 	present policy only if, after due consideration, you find that purchase of this long-term 
11.18 	care coverage is a wise decision.
11.19 	STATEMENT TO APPLICANT BY AGENT
11.20 	(BROKER OR OTHER REPRESENTATIVE):
11.21 	(Use additional sheets, as necessary.)
11.22 	I have reviewed your current medical health insurance coverage. I believe the 
11.23 	replacement of insurance involved in this transaction materially improves your position. 
11.24 	My conclusion has taken into account the following considerations, which I call to your 
11.25 	attention:
11.26 	(a) Health conditions which you presently have (preexisting conditions) may not 
11.27 	be immediately or fully covered under the new policy. This could result in denial or 
11.28 	delay in payment of benefits under the new policy, whereas a similar claim might have 
11.29 	been payable under your present policy.
11.30 	(b) State law provides that your replacement policy or certificate may not contain 
11.31 	new preexisting conditions or probationary periods. The insurer will waive any time 
11.32 	periods applicable to preexisting conditions or probationary periods in the new policy (or 
11.33 	coverage) for similar benefits to the extent such time was spent (depleted) under the 
11.34 	original policy.
11.35 	(c)  If you are replacing existing long-term care insurance coverage, you may wish to 
11.36 	secure the advice of your present insurer or its agent regarding the proposed replacement of 
11.37 	your present policy. This is not only your right, but it is also in your best interest to make 
11.38 	sure you understand all the relevant factors involved in replacing your present coverage.
12.1 	(d)  If, after due consideration, you still wish to terminate your present policy and 
12.2 	replace it with new coverage, be certain to truthfully and completely answer all questions 
12.3 	on the application concerning your medical health history. Failure to include all material 
12.4 	medical information on an application may provide a basis for the company to deny any 
12.5 	future claims and to refund your premium as though your policy had never been in force. 
12.6 	After the application has been completed and before you sign it, reread it carefully to be 
12.7 	certain that all information has been properly recorded.
12.8 	........
12.9 	(Signature of Agent, Broker, or Other Representative)
12.10 	(Typed Name and Address of Agency or Broker)
12.11 	The  above "Notice to Applicant" was delivered to me on:

12.12		........
	
12.13		(Date)
	
12.14		........
	
12.15		(Applicant's Signature)

12.16 	EFFECTIVE DATE. This section is effective July 1, 2006.

12.17 	Sec. 13. Minnesota Statutes 2004, section 62S.24, subdivision 4, is amended to read:
12.18 		Subd. 4.Direct response solicitations. Insurers using direct response solicitation 
12.19 	methods shall deliver a notice regarding replacement of long-term care coverage to 
12.20 	the applicant upon issuance of the policy. The required notice must be provided in the 
12.21 	following manner:
12.22 	NOTICE TO APPLICANT REGARDING REPLACEMENT OF
12.23 	ACCIDENT AND SICKNESS OR 
12.24 	LONG-TERM CARE INSURANCE
12.25 	(Insurance  company's name and address)
12.26 	SAVE THIS NOTICE! IT MAY BE
12.27 	IMPORTANT TO YOU IN THE FUTURE.
12.28 	According to (your application) (information you have furnished), you intend to 
12.29 	lapse or otherwise terminate existing accident and sickness or long-term care insurance 
12.30 	and replace it with the long-term care insurance policy delivered herewith issued by 
12.31 	(company name) insurance company.
12.32 	Your new policy provides 30 days within which you may decide, without cost, 
12.33 	whether you desire to keep the policy. For your own information and protection, you 
12.34 	should be aware of and seriously consider certain factors which may affect the insurance 
12.35 	protection available to you under the new policy.
13.1 	You should review this new coverage carefully, comparing it with all long-term care 
13.2 	insurance coverage you now have, and terminate your present policy only if, after due 
13.3 	consideration, you find that purchase of this long-term care coverage is a wise decision.
13.4 	(a) Health conditions which you presently have (preexisting conditions) may not 
13.5 	be immediately or fully covered under the new policy. This could result in denial or 
13.6 	delay in payment of benefits under the new policy, whereas a similar claim might have 
13.7 	been payable under your present policy.
13.8 	(b) State law provides that your replacement policy or certificate may not contain 
13.9 	new preexisting conditions or probationary periods. Your insurer will waive any time 
13.10 	periods applicable to preexisting conditions or probationary periods in the new policy (or 
13.11 	coverage) for similar benefits to the extent such time was spent (depleted) under the 
13.12 	original policy.
13.13 	(c) If you are replacing existing long-term care insurance coverage, you may wish to 
13.14 	secure the advice of your present insurer or its agent regarding the proposed replacement of 
13.15 	your present policy. This is not only your right, but it is also in your best interest to make 
13.16 	sure you understand all the relevant factors involved in replacing your present coverage.
13.17 	(d) (To be included only if the application is attached to the policy.)
13.18 	If,  after due consideration, you still wish to terminate your present policy and replace 
13.19 	it with new coverage, read the copy of the application attached to your new policy and be 
13.20 	sure that all questions are answered fully and correctly. Omissions or misstatements in 
13.21 	the application could cause an otherwise valid claim to be denied. Carefully check the 
13.22 	application and write to (company name and address) within 30 days if any information is 
13.23 	not correct and complete, or if any past medical history has been left out of the application.

13.24		........
	
13.25		(Company Name)

13.26 	EFFECTIVE DATE. This section is effective July 1, 2006.

13.27 	Sec. 14. Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision 
13.28 	to read:
13.29 		Subd. 7.Life insurance policies. Life insurance policies that accelerate benefits for 
13.30 	long-term care shall comply with this section if the policy being replaced is a long-term 
13.31 	care insurance policy. If the policy being replaced is a life insurance policy, the insurer 
13.32 	shall comply with the replacement requirements of sections 61A.53 to 61A.60. If a 
13.33 	life insurance policy that accelerates benefits for long-term care is replaced by another 
14.1 	such policy, the replacing insurer shall comply with both the long-term care and the life 
14.2 	insurance replacement requirements. 

14.3 	EFFECTIVE DATE. This section is effective July 1, 2006.

14.4 	Sec. 15.  Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision 
14.5 	to read:
14.6 		Subd. 8.Exchange for long-term care partnership policy; addition of policy 
14.7 	rider. (a) If federal law is amended or a federal waiver is granted with respect to the 
14.8 	long-term care partnership program referenced in section 256B.0571, issuers of long-term 
14.9 	care policies may voluntarily exchange a current long-term care insurance policy for a 
14.10 	long-term care partnership policy that meets the requirements of Public Law 109-171, 
14.11 	section 6021, after the effective date of the state plan amendment implementing the 
14.12 	partnership program in this state.
14.13 	(b) If federal law is amended or a federal waiver is granted with respect to the 
14.14 	long-term care partnership program referenced in section 256B.0571, allowing an existing 
14.15 	long-term care insurance policy to qualify as a partnership policy by addition of a policy 
14.16 	rider, the issuer of the policy is authorized to add the rider to the policy after the effective 
14.17 	date of the state plan amendment implementing the partnership program in this state.
14.18 	(c) The commissioner, in cooperation with the commissioner of human services, 
14.19 	shall pursue any federal law changes or waivers necessary to allow the implementation 
14.20 	of paragraphs (a) and (b).

14.21 	EFFECTIVE DATE. This section is effective July 1, 2006.

14.22 	Sec. 16. Minnesota Statutes 2004, section 62S.25, subdivision 6, is amended to read:
14.23 		Subd. 6.Claims denied. Each insurer shall report annually by June 30 the number 
14.24 	of claims denied for any reason during the reporting period for each class of business, 
14.25 	expressed as a percentage of claims denied, other than claims denied for failure to meet 
14.26 	the waiting period or because of any applicable preexisting condition. For purposes of 
14.27 	this subdivision, "claim" means a request for payment of benefits under an in-force policy 
14.28 	regardless of whether the benefit claimed is covered under the policy or any terms or 
14.29 	conditions of the policy have been met. 

14.30 	EFFECTIVE DATE. This section is effective July 1, 2006.

14.31 	Sec. 17. Minnesota Statutes 2004, section 62S.25, is amended by adding a subdivision 
14.32 	to read:
15.1 		Subd. 7.Reports.  Reports under this section shall be done on a statewide basis and 
15.2 	filed with the commissioner. They shall include, at a minimum, the information in the 
15.3 	format contained in Appendix E (Claim Denial Reporting Form) and in Appendix G 
15.4 	(Replacement and Lapse Reporting Form) of the Long-Term Care Model Regulation 
15.5 	adopted by the National Association of Insurance Commissioners. 

15.6 	EFFECTIVE DATE. This section is effective July 1, 2006.

15.7 	Sec. 18. Minnesota Statutes 2004, section 62S.26, is amended to read:
15.8 	62S.26 LOSS RATIO.
15.9 		Subdivision 1.Minimum loss ratio. (a) The minimum loss ratio must be at least 60 
15.10 	percent, calculated in a manner which provides for adequate reserving of the long-term 
15.11 	care insurance risk. In evaluating the expected loss ratio, the commissioner shall give 
15.12 	consideration to all relevant factors, including:
15.13 	(1) statistical credibility of incurred claims experience and earned premiums;
15.14 	(2) the period for which rates are computed to provide coverage;
15.15 	(3) experienced and projected trends;
15.16 	(4) concentration of experience within early policy duration;
15.17 	(5) expected claim fluctuation;
15.18 	(6) experience refunds, adjustments, or dividends;
15.19 	(7) renewability features;
15.20 	(8) all appropriate expense factors;
15.21 	(9) interest;
15.22 	(10) experimental nature of the coverage;
15.23 	(11) policy reserves;
15.24 	(12) mix of business by risk classification; and
15.25 	(13) product features such as long elimination periods, high deductibles, and high 
15.26 	maximum limits.
15.27 		Subd. 2.Life insurance policies. Subdivision 1 shall not apply to life insurance 
15.28 	policies that accelerate benefits for long-term care. A life insurance policy that funds 
15.29 	long-term care benefits entirely by accelerating the death benefit is considered to provide 
15.30 	reasonable benefits in relation to premiums paid, if the policy complies with all of the 
15.31 	following provisions:
15.32 	(1) the interest credited internally to determine cash value accumulations, including 
15.33 	long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest 
15.34 	rate for cash value accumulations without long-term care set forth in the policy;
16.1 	(2) the portion of the policy that provides life insurance benefits meets the 
16.2 	nonforfeiture requirements of section 61A.24;
16.3 	(3) the policy meets the disclosure requirements of sections 62S.09, 62S.10, and 
16.4 	62S.11; and 
16.5 	(4) an actuarial memorandum is filed with the insurance department that includes:
16.6 	(i) a description of the basis on which the long-term care rates were determined;
16.7 	(ii) a description of the basis for the reserves;
16.8 	(iii) a summary of the type of policy, benefits, renewability, general marketing 
16.9 	method, and limits on ages of issuance;
16.10 	(iv) a description and a table of each actuarial assumption used. For expenses, 
16.11 	an insurer must include percentage of premium dollars per policy and dollars per unit 
16.12 	of benefits, if any;
16.13 	(v) a description and a table of the anticipated policy reserves and additional reserves 
16.14 	to be held in each future year for active lives;
16.15 	(vi) the estimated average annual premium per policy and the average issue age;
16.16 	(vii) a statement as to whether underwriting is performed at the time of application. 
16.17 	The statement shall indicate whether underwriting is used and, if used, the statement 
16.18 	shall include a description of the type or types of underwriting used, such as medical 
16.19 	underwriting or functional assessment underwriting. Concerning a group policy, the 
16.20 	statement shall indicate whether the enrollee or any dependent will be underwritten and 
16.21 	when underwriting occurs; and
16.22 	(viii) a description of the effect of the long-term care policy provision on the required 
16.23 	premiums, nonforfeiture values, and reserves on the underlying life insurance policy, both 
16.24 	for active lives and those in long-term care claim status. 
16.25 		Subd. 3.Nonapplication.  (b) This section does not apply to policies or certificates 
16.26 	that are subject to sections  62S.021,  62S.081, and  62S.265, and that comply with those 
16.27 	sections. 

16.28 	EFFECTIVE DATE. This section is effective July 1, 2006.

16.29 	Sec. 19. Minnesota Statutes 2004, section 62S.266, subdivision 2, is amended to read:
16.30 		Subd. 2.Requirement. (a) An insurer must offer each prospective policyholder a 
16.31 	nonforfeiture benefit in compliance with the following requirements:
16.32 	(1) a policy or certificate offered with nonforfeiture benefits must have coverage 
16.33 	elements, eligibility, benefit triggers, and benefit length that are the same as coverage to be 
16.34 	issued without nonforfeiture benefits. The nonforfeiture benefit included in the offer must 
16.35 	be the benefit described in subdivision 5; and
17.1 	(2)  the offer must be in writing if the nonforfeiture benefit is not otherwise described 
17.2 	in the outline of coverage or other materials given to the prospective policyholder.
17.3 	(b) When a group long-term care insurance policy is issued, the offer required in 
17.4 	paragraph (a) shall be made to the group policy holder. However, if the policy is issued as 
17.5 	group long-term care insurance as defined in section 62S.01, subdivision 15, clause (4), 
17.6 	other than to a continuing care retirement community or other similar entity, the offering 
17.7 	shall be made to each proposed certificate holder. 

17.8 	EFFECTIVE DATE. This section is effective July 1, 2006.

17.9 	Sec. 20. Minnesota Statutes 2004, section 62S.29, subdivision 1, is amended to read:
17.10 		Subdivision 1.Requirements. An insurer or other entity marketing long-term care 
17.11 	insurance coverage in this state, directly or through its producers, shall:
17.12 	(1) establish marketing procedures and agent training requirements to assure that a 
17.13 	any marketing activities, including any comparison of policies by its agents or other 
17.14 	producers, are fair and accurate;
17.15 	(2) establish marketing procedures to assure excessive insurance is not sold or issued;
17.16 	(3) display prominently by type, stamp, or other appropriate means, on the first page 
17.17 	of the outline of coverage and policy, the following:
17.18 	"Notice to buyer: This policy may not cover all of the costs associated with 
17.19 	long-term care incurred by the buyer during the period of coverage. The buyer is advised 
17.20 	to review carefully all policy limitations.";
17.21 	(4) provide copies of the disclosure forms required in section 62S.081, subdivision 
17.22 	4, to the applicant; 
17.23 	(5) inquire and otherwise make every reasonable effort to identify whether a 
17.24 	prospective applicant or enrollee for long-term care insurance already has long-term care 
17.25 	insurance and the types and amounts of the insurance;
17.26 	(5)(6) establish auditable procedures for verifying compliance with this subdivision; 
17.27 	and
17.28 	(6)(7) if applicable, provide written notice to the prospective policyholder and 
17.29 	certificate holder, at solicitation, that a senior insurance counseling program approved 
17.30 	by the commissioner is available and the name, address, and telephone number of the 
17.31 	program;
17.32 	(8) use the terms "noncancelable" or "level premium" only when the policy or 
17.33 	certificate conforms to section 62S.14; and 
17.34 	(9) provide an explanation of contingent benefit upon lapse provided for in section 
17.35 	62S.266.

18.1 	EFFECTIVE DATE. This section is effective July 1, 2006.

18.2 	Sec. 21. Minnesota Statutes 2004, section 62S.30, is amended to read:
18.3 	62S.30 APPROPRIATENESS OF RECOMMENDED PURCHASE
18.4 	SUITABILITY.
18.5 	In recommending the purchase or replacement of a long-term care insurance policy 
18.6 	or certificate, an agent shall comply with section  60K.46, subdivision 4. 
18.7 		Subdivision 1. Standards. Every insurer or other entity marketing long-term care 
18.8 	insurance shall:
18.9 	(1) develop and use suitability standards to determine whether the purchase or 
18.10 	replacement of long-term care insurance is appropriate for the needs of the applicant; 
18.11 	(2) train its agents in the use of its suitability standards; and 
18.12 	(3) maintain a copy of its suitability standards and make them available for 
18.13 	inspection upon request by the commissioner.
18.14 		Subd. 2.Procedures. (a) To determine whether the applicant meets the standards 
18.15 	developed by the insurer or other entity marketing long-term care insurance, the agent 
18.16 	and insurer or other entity marketing long-term care insurance shall develop procedures 
18.17 	that take the following into consideration:
18.18 	(1) the ability to pay for the proposed coverage and other pertinent financial 
18.19 	information related to the purchase of the coverage;
18.20 	(2) the applicant's goals or needs with respect to long-term care and the advantages 
18.21 	and disadvantages of insurance to meet those goals or needs; and 
18.22 	(3) the values, benefits, and costs of the applicant's existing insurance, if any, when 
18.23 	compared to the values, benefits, and costs of the recommended purchase or replacement.
18.24 	(b) The insurer or other entity marketing long-term care insurance, and where an 
18.25 	agent is involved, the agent, shall make reasonable efforts to obtain the information set 
18.26 	forth in paragraph (a). The efforts shall include presentation to the applicant, at or prior 
18.27 	to application, of the "Long-Term Care Insurance Personal Worksheet." The personal 
18.28 	worksheet used by the insurer or other entity marketing long-term care insurance shall 
18.29 	contain, at a minimum, the information in the format contained in Appendix B of the 
18.30 	Long-Term Care Model Regulation adopted by the National Association of Insurance 
18.31 	Commissioners, in not less than 12-point type. The insurer or other entity marketing 
18.32 	long-term care insurance may request the applicant to provide additional information to 
18.33 	comply with its suitability standards. The insurer or other entity marketing long-term care 
18.34 	insurance shall file a copy of its personal worksheet with the commissioner. 
19.1 	(c) A completed personal worksheet shall be returned to the insurer or other entity 
19.2 	marketing long-term care insurance prior to consideration of the applicant for coverage, 
19.3 	except the personal worksheet need not be returned for sales of employer group long-term 
19.4 	care insurance to employees and their spouses. The sale or dissemination by the insurer 
19.5 	or other entity marketing long-term care insurance, or the agent, of information obtained 
19.6 	through the personal worksheet, is prohibited. 
19.7 	(d) The insurer or other entity marketing long-term care insurance shall use the 
19.8 	suitability standards it has developed under this section in determining whether issuing 
19.9 	long-term care insurance coverage to an applicant is appropriate. Agents shall use the 
19.10 	suitability standards developed by the insurer or other entity marketing long-term care 
19.11 	insurance in marketing long-term care insurance. 
19.12 	(e) At the same time as the personal worksheet is provided to the applicant, the 
19.13 	disclosure form entitled "Things You Should Know Before You Buy Long-Term Care 
19.14 	Insurance" shall be provided. The form shall be in the format contained in Appendix C of 
19.15 	the Long-Term Care Insurance Model Regulation adopted by the National Association of 
19.16 	Insurance Commissioners in not less than 12-point type. 
19.17 	(f) If the insurer or other entity marketing long-term care insurance determines 
19.18 	that the applicant does not meet its financial suitability standards, or if the applicant has 
19.19 	declined to provide the information, the insurer or other entity marketing long-term 
19.20 	care insurance may reject the application. In the alternative, the insurer or other entity 
19.21 	marketing long-term care insurance shall send the applicant a letter similar to Appendix D 
19.22 	of the Long-Term Care Insurance Model Regulation adopted by the National Association 
19.23 	of Insurance Commissioners. However, if the applicant has declined to provide financial 
19.24 	information, the insurer or other entity marketing long-term care insurance may use some 
19.25 	other method to verify the applicant's intent. The applicant's returned letter or a record of 
19.26 	the alternative method of verification shall be made part of the applicant's file. 
19.27 		Subd. 3.Reports. The insurer or other entity marketing long-term care insurance 
19.28 	shall report annually to the commissioner the total number of applications received from 
19.29 	residents of this state, the number of those who declined to provide information on the 
19.30 	personal worksheet, the number of applicants who did not meet the suitability standards, 
19.31 	and the number of those who chose to confirm after receiving a suitability letter. 
19.32 		Subd. 4.Application. This section shall not apply to life insurance policies that 
19.33 	accelerate benefits for long-term care. 

19.34 	EFFECTIVE DATE. This section is effective July 1, 2006.

19.35 	Sec. 22. [62S.315] PRODUCER TRAINING.
20.1 	The commissioner shall approve producer training requirements in accordance with 
20.2 	the NAIC Long-Term Care Insurance Model Act provisions. The commissioner of the 
20.3 	Department of Human Services shall provide technical assistance and information to the 
20.4 	commissioner in accordance with Public Law 109-171, section 6021.

20.5 	EFFECTIVE DATE. This section is effective July 1, 2006.

20.6 	Sec. 23. Minnesota Statutes 2004, section 144.6501, subdivision 6, is amended to read:
20.7 		Subd. 6.Medical assistance payment. (a) An admission contract for a facility that 
20.8 	is certified for participation in the medical assistance program must state that neither the 
20.9 	prospective resident, nor anyone on the resident's behalf, is required to pay privately any 
20.10 	amount for which the resident's care at the facility has been approved for payment by 
20.11 	medical assistance or to make any kind of donation, voluntary or otherwise. Except as 
20.12 	permitted under section 6015 of the Deficit Reduction Act of 2005, Public Law 109-171, 
20.13 	an admission contract must state that the facility does not require as a condition of 
20.14 	admission, either in its admission contract or by oral promise before signing the admission 
20.15 	contract, that residents remain in private pay status for any period of time.
20.16 	(b) The admission contract must state that upon presentation of proof of eligibility, 
20.17 	the facility will submit a medical assistance claim for reimbursement and will return any 
20.18 	and all payments made by the resident, or by any person on the resident's behalf, for 
20.19 	services covered by medical assistance, upon receipt of medical assistance payment.
20.20 	(c) A facility that participates in the medical assistance program shall not charge for 
20.21 	the day of the resident's discharge from the facility or subsequent days.
20.22 	(d) If a facility's charges incurred by the resident are delinquent for 30 days, and 
20.23 	no person has agreed to apply for medical assistance for the resident, the facility may 
20.24 	petition the court under chapter 525 to appoint a representative for the resident in order to 
20.25 	apply for medical assistance for the resident.
20.26 	(e) The remedy provided in this subdivision does not preclude a facility from seeking 
20.27 	any other remedy available under other laws of this state.

20.28 	Sec. 24. Minnesota Statutes 2004, section 256B.02, subdivision 9, is amended to read:
20.29 		Subd. 9.Private health care coverage. "Private health care coverage" means any 
20.30 	plan regulated by chapter 62A, 62C or 64B. Private health care coverage also includes 
20.31 	any self-insuranceself-insured plan providing health care benefits, pharmacy benefit 
20.32 	manager, service benefit plan, managed care organization, and other parties that are by 
20.33 	contract legally responsible for payment of a claim for a health care item or service for an 
20.34 	individual receiving medical benefits under chapter 256B, 256D, or 256L.

21.1 	Sec. 25. Minnesota Statutes 2004, section 256B.056, subdivision 2, is amended to read:
21.2 		Subd. 2.Homestead; exclusion  and homestead equity limit for institutionalized 
21.3 	persons. (a) The homestead shall be excluded for the first six calendar months of a 
21.4 	person's stay in a long-term care facility and shall continue to be excluded for as long as 
21.5 	the recipient can be reasonably expected to return to the homestead. For purposes of 
21.6 	this subdivision, "reasonably expected to return to the homestead" means the recipient's 
21.7 	attending physician has certified that the expectation is reasonable, and the recipient can 
21.8 	show that the cost of care upon returning home will be met through medical assistance 
21.9 	or other sources. The homestead shall continue to be excluded for persons residing in 
21.10 	a long-term care facility if it is used as a primary residence by one of the following 
21.11 	individuals:
21.12 	(a) (1) the spouse;
21.13 	(b) (2) a child under age 21;
21.14 	(c) (3) a child of any age who is blind or permanently and totally disabled as defined 
21.15 	in the supplemental security income program;
21.16 	(d) (4) a sibling who has equity interest in the home and who resided in the home for 
21.17 	at least one year immediately before the date of the person's admission to the facility; or
21.18 	(e) (5) a child of any age, or, subject to federal approval, a grandchild of any age, 
21.19 	who resided in the home for at least two years immediately before the date of the person's 
21.20 	admission to the facility, and who provided care to the person that permitted the person to 
21.21 	reside at home rather than in an institution.
21.22 	(b) Effective for applications filed on or after July 1, 2006, and for renewals after 
21.23 	July 1, 2006, for persons who first applied for payment of long-term care services on 
21.24 	or after January 2, 2006, the equity interest in the homestead of an individual whose 
21.25 	eligibility for long-term care services is determined on or after January 1, 2006, shall not 
21.26 	exceed $500,000, unless it is the lawful residence of the individual's spouse or child 
21.27 	who is under age 21, blind, or disabled. The amount specified in this paragraph shall be 
21.28 	increased beginning in year 2011, from year to year based on the percentage increase in 
21.29 	the Consumer Price Index for all urban consumers, all items - United States city average, 
21.30 	rounded to the nearest $1,000. This provision may be waived in the case of demonstrated 
21.31 	hardship by a process to be determined by the secretary of health and human services 
21.32 	pursuant to section 6014 of the Deficit Reduction Act of 2005, Public Law 109-171.

21.33 	Sec. 26. Minnesota Statutes 2004, section 256B.056, is amended by adding a 
21.34 	subdivision to read:
22.1 		Subd. 3e.Treatment of continuing care retirement and life care community 
22.2 	entrance fees. An entrance fee paid by an individual to a continuing care retirement or 
22.3 	life care community shall be treated as an available asset to the extent that:
22.4 	(1) the individual has the ability to use the entrance fee, or the contract provides that 
22.5 	the entrance fee may be used, to pay for care should other resources or income of the 
22.6 	individual be insufficient to pay for care;
22.7 	(2) the individual is eligible for a refund of any remaining entrance fees when 
22.8 	the individual dies or terminates the continuing care retirement or life care community 
22.9 	contract and leaves the community; and
22.10 	(3) the entrance fee does not confer an ownership interest in the continuing care 
22.11 	retirement or life care community.

22.12 	Sec. 27. Minnesota Statutes 2004, section 256B.056, is amended by adding a 
22.13 	subdivision to read:
22.14 		Subd. 11.Treatment of annuities. (a) Any individual applying for or seeking 
22.15 	recertification of eligibility for medical assistance payment of long-term care services 
22.16 	shall provide a complete description of any interest either the individual or the individual's 
22.17 	spouse has in annuities. The individual and the individual's spouse shall furnish the 
22.18 	agency responsible for determining eligibility with complete current copies of their 
22.19 	annuities and related documents for review as part of the application process on disclosure 
22.20 	forms provided by the department as part of their application.
22.21 	(b) The disclosure form shall include a statement that the department becomes the 
22.22 	remainder beneficiary under the annuity or similar financial instrument by virtue of the 
22.23 	receipt of medical assistance. The disclosure form shall include a notice to the issuer of 
22.24 	the department's right under this section as a preferred remainder beneficiary under the 
22.25 	annuity or similar financial instrument for medical assistance furnished to the individual 
22.26 	or the individual's spouse, and require the issuer to provide confirmation that a remainder 
22.27 	beneficiary designation has been made and to notify the county agency when there is a 
22.28 	change in the amount of the income or principal being withdrawn from the annuity or 
22.29 	other similar financial instrument at the time of the most recent disclosure required under 
22.30 	this section. The individual and the individual's spouse shall execute separate disclosure 
22.31 	forms for each annuity or similar financial instrument that they are required to disclose 
22.32 	under this section and in which they have an interest.
22.33 	(c) An issuer of an annuity or similar financial instrument who receives notice on a 
22.34 	disclosure form as described in paragraph (b) shall provide confirmation to the requesting 
22.35 	agency that a remainder beneficiary designating the state has been made and shall notify 
23.1 	the county agency when there is a change in the amount of income or principal being 
23.2 	withdrawn from the annuity or other similar financial instrument. The county agency shall 
23.3 	provide the issuer with the name, address, and telephone number of a unit within the 
23.4 	department that the insurer can contact to comply with this paragraph.

23.5 	Sec. 28. Minnesota Statutes 2005 Supplement, section 256B.0571, is amended to read:
23.6 	256B.0571 LONG-TERM CARE PARTNERSHIP PROGRAM.
23.7 		Subdivision 1.Definitions. For purposes of this section, the following terms have 
23.8 	the meanings given them.
23.9 		Subd. 2.Home care service. "Home care service" means care described in section 
23.10 	144A.43.
23.11 		Subd. 3.Long-term care insurance. "Long-term care insurance" means a policy 
23.12 	described in section 62S.01.
23.13 		Subd. 4.Medical assistance. "Medical assistance" means the program of medical 
23.14 	assistance established under section 256B.01.
23.15 		Subd. 5.Nursing home. "Nursing home" means a nursing home as described 
23.16 	in section 144A.01.
23.17 		Subd. 6.Partnership policy. "Partnership policy" means a long-term care insurance 
23.18 	policy that meets the requirements under subdivision 10 or 11, regardless of when the 
23.19 	policy and was first issued on or after the effective date of the state plan amendment.
23.20 		Subd. 7.Partnership program. "Partnership program" means the Minnesota 
23.21 	partnership for long-term care program established under this section.
23.22 		Subd. 7a.Protected assets. "Protected assets" means assets or proceeds of assets 
23.23 	that are protected from recovery under subdivisions 13 and 15.
23.24 		Subd. 8.Program established. (a) The commissioner, in cooperation with the 
23.25 	commissioner of commerce, shall establish the Minnesota partnership for long-term care 
23.26 	program to provide for the financing of long-term care through a combination of private 
23.27 	insurance and medical assistance.
23.28 	(b) An individual who meets the requirements in this paragraph is eligible to 
23.29 	participate in the partnership program. The individual must:
23.30 	(1) be a Minnesota resident at the time coverage first became effective under the 
23.31 	partnership policy;
23.32 	(2) purchase a partnership policy that is delivered, issued for delivery, or renewed on 
23.33 	or after the effective date of Laws 2005, First Special Session chapter 4, article 7, section 
23.34 	5, and maintain the partnership policy in effect throughout the period of participation in 
23.35 	the partnership program be a beneficiary of a partnership policy that (i) is issued on or 
24.1 	after the effective date of the state plan amendment implementing the partnership program 
24.2 	in Minnesota, or (ii) qualifies as a partnership policy under the provisions of section 
24.3 	62S.24, subdivision 8; and
24.4 	(3) exhaust the minimumhave exhausted all of the benefits under the partnership 
24.5 	policy as described in this section. Benefits received under a long-term care insurance 
24.6 	policy before the effective date of Laws 2005, First Special Session chapter 4, article 7, 
24.7 	section 5 July 1, 2006, do not count toward the exhaustion of benefits required in this 
24.8 	subdivision.
24.9 		Subd. 9.Medical assistance eligibility. (a) Upon application offor medical 
24.10 	assistance program payment of long-term care services by an individual who meets the 
24.11 	requirements described in subdivision 8, the commissioner shall determine the individual's 
24.12 	eligibility for medical assistance according to paragraphs (b) and (c) to (i).
24.13 	(b) After disregarding financialdetermining assets exempted under medical 
24.14 	assistance eligibility requirements subject to the asset limit under section 256B.056, 
24.15 	subdivision 3 or 3c, or section 256B.057, subdivision 9 or 10, the commissioner shall 
24.16 	disregard an additional amount of financial assets equalallow the individual to designate 
24.17 	assets to be protected from recovery under subdivisions 13 and 15 up to the dollar amount 
24.18 	of coveragethe benefits utilized under the partnership policy. Designated assets shall be 
24.19 	disregarded for purposes of determining eligibility for payment of long-term care services.
24.20 	(c) The commissioner shall consider the individual's income according to medical 
24.21 	assistance eligibility requirements. The individual shall identify the designated assets and 
24.22 	the full fair market value of those assets and designate them as assets to be protected at 
24.23 	the time of initial application for medical assistance. The full fair market value of real 
24.24 	property or interests in real property shall be based on the most recent full assessed value 
24.25 	for property tax purposes for the real property, unless the individual provides a complete 
24.26 	professional appraisal by a licensed appraiser to establish the full fair market value. The 
24.27 	extent of a life estate in real property shall be determined using the life estate table in the 
24.28 	health care program's manual. Ownership of any asset in joint tenancy shall be treated as 
24.29 	ownership as tenants in common for purposes of its designation as a disregarded asset. 
24.30 	The unprotected value of any protected asset is subject to estate recovery according to 
24.31 	subdivisions 13 and 15.
24.32 	(d) The right to designate assets to be protected is personal to the individual and 
24.33 	ends when the individual dies, except as otherwise provided in subdivisions 13 and 
24.34 	15. It does not include the increase in the value of the protected asset and the income, 
24.35 	dividends, or profits from the asset. It may be exercised by the individual or by anyone 
25.1 	with the legal authority to do so on the individual's behalf. It shall not be sold, assigned, 
25.2 	transferred, or given away.
25.3 	(e) If the dollar amount of the benefits utilized under a partnership policy is greater 
25.4 	than the full fair market value of all assets protected at the time of the application for 
25.5 	medical assistance long-term care services, the individual may designate additional assets 
25.6 	that become available during the individual's lifetime for protection under this section. 
25.7 	The individual must make the designation in writing to the county agency no later than 
25.8 	the last date on which the individual must report a change in circumstances to the county 
25.9 	agency, as provided for under the medical assistance program. Any excess used for this 
25.10 	purpose shall not be available to the individual's estate to protect assets in the estate from 
25.11 	recovery under section 256B.15, 524.3-1202, or otherwise.
25.12 	(f) This section applies only to estate recovery under United States Code, title 42, 
25.13 	section 1396p, subsections (a) and (b), and does not apply to recovery authorized by other 
25.14 	provisions of federal law, including, but not limited to, recovery from trusts under United 
25.15 	States Code, title 42, section 1396p, subsection (d)(4)(A) and (C), or to recovery from 
25.16 	annuities, or similar legal instruments, subject to section 6012, subsections (a) and (b), of 
25.17 	the Deficit Reduction Act of 2005, Public Law 109-171.
25.18 	(g) An individual's protected assets owned by the individual's spouse who applies 
25.19 	for payment of medical assistance long-term care services shall not be protected assets or 
25.20 	disregarded for purposes of eligibility of the individual's spouse solely because they were 
25.21 	protected assets of the individual.
25.22 	(h) Assets designated under this subdivision shall not be subject to penalty under 
25.23 	section 256B.0595.
25.24 	(i) The commissioner shall otherwise determine the individual's eligibility 
25.25 	for payment of long-term care services according to medical assistance eligibility 
25.26 	requirements.
25.27 		Subd. 10.Dollar-for-dollar asset protection policies Inflation protection. (a) A 
25.28 	dollar-for-dollar asset protection policy must meet all of the requirements in paragraphs 
25.29 	(b) to (e).
25.30 	(b) The policy must satisfy the requirements of chapter 62S.
25.31 	(c) The policy must offer an elimination period of not more than 180 days for an 
25.32 	adjusted premium.
25.33 	(d) The policy must satisfy the requirements established by the commissioner of 
25.34 	human services under subdivision 14.
25.35 	(e) Minimum daily benefits shall be $130 for nursing home care or $65 for home 
25.36 	care, with inflation protection provided in the policy as described in section 62S.23, 
26.1 	subdivision 1, clause (1). These minimum daily benefit amounts shall be adjusted by the 
26.2 	commissioner on October 1 of each year by a percentage equal to the inflation protection 
26.3 	feature described in section 62S.23, subdivision 1, clause (1), for purposes of setting 
26.4 	minimum requirements that a policy must meet in future years in order to initially qualify 
26.5 	as an approved policy under this subdivision. Adjusted minimum daily benefit amounts 
26.6 	shall be rounded to the nearest whole dollar.
26.7 	A long-term care partnership policy must provide the inflation protection described 
26.8 	in this paragraph. If the policy is sold to an individual who:
26.9 	(1) has not attained age 61 as of the date of purchase, the policy provides compound 
26.10 	annual inflation protection;
26.11 	(2) has attained age 61, but has not attained age 76 as of such date, the policy 
26.12 	provides some level of inflation protection; and 
26.13 	(3) has attained age 76 as of such date, the policy may, but is not required to, provide 
26.14 	some level of inflation protection.
26.15 		Subd. 11.Total asset protection policies. (a) A total asset protection policy must 
26.16 	meet all of the requirements in subdivision 10, paragraphs (b) to (d), and this subdivision.
26.17 	(b) Minimum coverage shall be for a period of not less than three years and for a 
26.18 	dollar amount equal to 36 months of nursing home care at the minimum daily benefit rate 
26.19 	determined and adjusted under paragraph (c).
26.20 	(c) Minimum daily benefits shall be $150 for nursing home care or $75 for home 
26.21 	care, with inflation protection provided in the policy as described in section 62S.23, 
26.22 	subdivision 1, clause (1). These minimum daily benefit amounts shall also be adjusted 
26.23 	by the commissioner on October 1 of each year by a percentage equal to the inflation 
26.24 	protection feature described in section 62S.23, subdivision 1, clause (1), for purposes of 
26.25 	setting minimum requirements that a policy must meet in future years in order to initially 
26.26 	qualify as an approved policy under this subdivision. Adjusted minimum daily benefit 
26.27 	amounts shall be rounded to the nearest whole dollar.
26.28 	(d) The policy must cover all of the following services:
26.29 	(1) nursing home stay;
26.30 	(2) home care service; and
26.31 	(3) care management.
26.32 		Subd. 12.Compliance with federal law. An issuer of a partnership policy must 
26.33 	comply with any federal law authorizing partnership policies in Minnesota Public Law 
26.34 	109-171, section 6021, including any federal regulations, as amended, adopted under that 
26.35 	law. This subdivision does not require compliance with any provision of this federal 
27.1 	law until the date upon which the law requires compliance with the provision. The 
27.2 	commissioner has authority to enforce this subdivision.
27.3 		Subd. 13.Limitations on estate recovery. (a) For an individual who exhausts the 
27.4 	minimum benefits of adollar-for-dollar asset protectionpolicy under subdivision 10, and 
27.5 	is determined eligible for medical assistance under subdivision 9, the state shall limit 
27.6 	recovery under the provisions of section 256B.15 against the estate of the individual or 
27.7 	individual's spouse for medical assistance benefits received by that individual to an amount 
27.8 	that exceeds the dollar amount of coverage utilized under the partnership policy. Protected 
27.9 	assets of the individual shall not be subject to recovery under section 256B.15 or section 
27.10 	524.3-1201 for medical assistance or alternative care paid on behalf of the individual. 
27.11 	Protected assets of the individual in the estate of the individual's surviving spouse shall 
27.12 	not be liable to pay a claim for recovery of medical assistance paid for the predeceased 
27.13 	individual that is filed in the estate of the surviving spouse under section 256B.15. 
27.14 	Protected assets of the individual shall not be protected assets in the surviving spouse's 
27.15 	estate by reason of the preceding sentence and shall be subject to recovery under section 
27.16 	256B.15 or 524.3-1201 for medical assistance paid on behalf of the surviving spouse.
27.17 	(b) For an individual who exhausts the minimum benefits of a total asset protection 
27.18 	policy under subdivision 11, and is determined eligible for medical assistance under 
27.19 	subdivision 9, the state shall not seek recovery under the provisions of section 256B.15
27.20 	against the estate of the individual or individual's spouse for medical assistance benefits 
27.21 	received by that individual. The personal representative may protect the full fair market 
27.22 	value of an individual's unprotected assets in the individual's estate in an amount equal 
27.23 	to the unused amount of asset protection the individual had on the date of death. The 
27.24 	personal representative shall apply the asset protection so that the full fair market value of 
27.25 	any unprotected asset in the estate is protected. When or if the asset protection available 
27.26 	to the personal representative is or becomes less than the full fair market value of any 
27.27 	remaining unprotected asset, it shall be applied to partially protect one unprotected asset.
27.28 	(c) The asset protection described in paragraph (a) terminates with respect to an asset 
27.29 	includable in the individual's estate under chapter 524 or section 256B.15:
27.30 	(1) when the estate distributes the asset; or
27.31 	(2) if the estate of the individual has not been probated within one year from the 
27.32 	date of death.
27.33 	(d) If an individual owns a protected asset on the date of death and the estate is 
27.34 	opened for probate more than one year after death, the state or a county agency may file 
27.35 	and collect claims in the estate under section 256B.15, and no statute of limitations in 
27.36 	chapter 524 that would otherwise limit or bar the claim shall apply.
28.1 	(e) Except as otherwise provided, nothing in this section shall limit or prevent 
28.2 	recovery of medical assistance.
28.3 		Subd. 14.Implementation. (a) If federal law is amended or a federal waiver is 
28.4 	granted to permit implementation of this section, the commissioner, in consultation with 
28.5 	the commissioner of commerce, may alter the requirements of subdivisions 10 and 11, 
28.6 	and may establish additional requirements for approved policies in order to conform with 
28.7 	federal law or waiver authority. In establishing these requirements, the commissioner shall 
28.8 	seek to maximize purchase of qualifying policies by Minnesota residents while controlling 
28.9 	medical assistance costs.
28.10 	(b) The commissioner is authorized to suspend implementation of this section 
28.11 	until the next session of the legislature if the commissioner, in consultation with the 
28.12 	commissioner of commerce, determines that the federal legislation or federal waiver 
28.13 	authorizing a partnership program in Minnesota is likely to impose substantial unforeseen 
28.14 	costs on the state budget.
28.15 	(c) The commissioner must take action under paragraph (a) or (b) within 45 days of 
28.16 	final federal action authorizing a partnership policy in Minnesota.
28.17 	(d) The commissioner must notify the appropriate legislative committees of 
28.18 	action taken under this subdivision within 50 days of final federal action authorizing a 
28.19 	partnership policy in Minnesota.
28.20 	(e) The commissioner must publish a notice in the State Register of implementation 
28.21 	decisions made under this subdivision as soon as practicable. The commissioner shall 
28.22 	submit a state plan amendment to the federal government to implement the long-term care 
28.23 	partnership program in accordance with this section.
28.24 		Subd. 15.Limitation on liens. (a) An individual's interest in real property shall not 
28.25 	be subject to a medical assistance lien or a notice of potential claim while it is protected 
28.26 	under subdivision 9, to the extent it is protected.
28.27 	(b) Medical assistance liens or liens arising under notices of potential claims against 
28.28 	an individual's interests in real property in their estate that are designated as protected 
28.29 	under subdivision 13, paragraph (b), shall be released to the extent of the dollar value 
28.30 	of the protection applied to the interest.
28.31 	(c) If an interest in real property is protected from a lien for recovery of medical 
28.32 	assistance paid on behalf of the individual under paragraph (a) or (b), no such lien for 
28.33 	recovery of medical assistance paid on behalf of that individual shall be filed against the 
28.34 	protected interest in real property after it is distributed to the individual's heirs or devisees.
28.35 		Subd. 16.Burden of proof. Any individual or the personal representative of the 
28.36 	individual's estate who asserts that an asset is a disregarded or protected asset under 
29.1 	this section in connection with any determination of eligibility for benefits under the 
29.2 	medical assistance program or any appeal, case, controversy, or other proceedings, shall 
29.3 	have the initial burden of:
29.4 	(1) documenting and proving by convincing evidence that the asset or source of 
29.5 	funds for the asset in question was designated as disregarded or protected;
29.6 	(2) tracing the asset and the proceeds of the asset from that time forward; and 
29.7 	(3) documenting that the asset or proceeds of the asset remained disregarded or 
29.8 	protected at all relevant times.

29.9 	EFFECTIVE DATE. This section is effective July 1, 2006.

29.10 	Sec. 29. [256B.0594] PAYMENT OF BENEFITS FROM AN ANNUITY.
29.11 	When payment becomes due under an annuity that names the department a 
29.12 	remainder beneficiary as described in section 256B.056, subdivision 11, the issuer shall 
29.13 	request and the department shall, within 45 days after receipt of the request, provide a 
29.14 	written statement of the total amount of the medical assistance paid. Upon timely receipt 
29.15 	of the written statement of the amount of medical assistance paid, the issuer shall pay the 
29.16 	department an amount equal to the lesser of the amount due the department under the 
29.17 	annuity or the total amount of medical assistance paid on behalf of the individual or the 
29.18 	individual's spouse. Any amounts remaining after the issuer's payment to the department 
29.19 	shall be payable according to the terms of the annuity or similar financial instrument. The 
29.20 	county agency or the department shall provide the issuer with the name, address, and 
29.21 	telephone number of a unit within the department the issuer can contact to comply with this 
29.22 	section. The requirements of section 72A.201, subdivision 4, clause (3), shall not apply to 
29.23 	payments made under this section until the issuer has received final payment information 
29.24 	from the department, if the issuer has notified the beneficiary of the requirements of this 
29.25 	section at the time it initially requests payment information from the department.

29.26 	Sec. 30. Minnesota Statutes 2004, section 256B.0595, subdivision 1, is amended to 
29.27 	read:
29.28 		Subdivision 1.Prohibited transfers. (a) For transfers of assets made on or before 
29.29 	August 10, 1993, if a person or the person's spouse has given away, sold, or disposed of, 
29.30 	for less than fair market value, any asset or interest therein, except assets other than the 
29.31 	homestead that are excluded under the supplemental security program, within 30 months 
29.32 	before or any time after the date of institutionalization if the person has been determined 
29.33 	eligible for medical assistance, or within 30 months before or any time after the date of the 
29.34 	first approved application for medical assistance if the person has not yet been determined 
30.1 	eligible for medical assistance, the person is ineligible for long-term care services for the 
30.2 	period of time determined under subdivision 2.
30.3 	(b) Effective for transfers made after August 10, 1993, a person, a person's spouse, 
30.4 	or any person, court, or administrative body with legal authority to act in place of, on 
30.5 	behalf of, at the direction of, or upon the request of the person or person's spouse, may not 
30.6 	give away, sell, or dispose of, for less than fair market value, any asset or interest therein, 
30.7 	except assets other than the homestead that are excluded under the supplemental security 
30.8 	income program, for the purpose of establishing or maintaining medical assistance 
30.9 	eligibility. This applies to all transfers, including those made by a community spouse 
30.10 	after the month in which the institutionalized spouse is determined eligible for medical 
30.11 	assistance. For purposes of determining eligibility for long-term care services, any transfer 
30.12 	of such assets within 36 months before or any time after an institutionalized person applies 
30.13 	for medical assistance, or 36 months before or any time after a medical assistance recipient 
30.14 	becomes institutionalized, for less than fair market value may be considered. Any such 
30.15 	transfer is presumed to have been made for the purpose of establishing or maintaining 
30.16 	medical assistance eligibility and the person is ineligible for long-term care services for 
30.17 	the period of time determined under subdivision 2, unless the person furnishes convincing 
30.18 	evidence to establish that the transaction was exclusively for another purpose, or unless 
30.19 	the transfer is permitted under subdivision 3 or 4. Notwithstanding the provisions of this 
30.20 	paragraph,  In the case of payments from a trust or portions of a trust that are considered 
30.21 	transfers of assets under federal law, or in the case of any other disposal of assets made on 
30.22 	or after February 8, 2006, any transfers made within 60 months before or any time after an 
30.23 	institutionalized person applies for medical assistance and within 60 months before or any 
30.24 	time after a medical assistance recipient becomes institutionalized, may be considered.
30.25 	(c) This section applies to transfers, for less than fair market value, of income 
30.26 	or assets, including assets that are considered income in the month received, such as 
30.27 	inheritances, court settlements, and retroactive benefit payments or income to which the 
30.28 	person or the person's spouse is entitled but does not receive due to action by the person, 
30.29 	the person's spouse, or any person, court, or administrative body with legal authority 
30.30 	to act in place of, on behalf of, at the direction of, or upon the request of the person or 
30.31 	the person's spouse.
30.32 	(d) This section applies to payments for care or personal services provided by a 
30.33 	relative, unless the compensation was stipulated in a notarized, written agreement which 
30.34 	was in existence when the service was performed, the care or services directly benefited 
30.35 	the person, and the payments made represented reasonable compensation for the care 
31.1 	or services provided. A notarized written agreement is not required if payment for the 
31.2 	services was made within 60 days after the service was provided.
31.3 	(e) This section applies to the portion of any asset or interest that a person, a person's 
31.4 	spouse, or any person, court, or administrative body with legal authority to act in place of, 
31.5 	on behalf of, at the direction of, or upon the request of the person or the person's spouse, 
31.6 	transfers to any annuity that exceeds the value of the benefit likely to be returned to the 
31.7 	person or spouse while alive, based on estimated life expectancy using the life expectancy 
31.8 	tables employed by the supplemental security income program to determine the value 
31.9 	of an agreement for services for life. The commissioner may adopt rules reducing life 
31.10 	expectancies based on the need for long-term care. This section applies to an annuity 
31.11 	described in this paragraph purchased on or after March 1, 2002, that:
31.12 	(1) is not purchased from an insurance company or financial institution that is 
31.13 	subject to licensing or regulation by the Minnesota Department of Commerce or a similar 
31.14 	regulatory agency of another state;
31.15 	(2) does not pay out principal and interest in equal monthly installments; or
31.16 	(3) does not begin payment at the earliest possible date after annuitization.
31.17 	(f) Effective for transactions, including the purchase of an annuity, occurring on or 
31.18 	after February 8, 2006, the purchase of an annuity by or on behalf of an individual who 
31.19 	has applied for or is receiving long-term care services or the individual's spouse shall be 
31.20 	treated as the disposal of an asset for less than fair market value unless:
31.21 	(1) the department is named as the remainder beneficiary in first position for an 
31.22 	amount equal to at least the total amount of medical assistance paid on behalf of the 
31.23 	individual or the individual's spouse; or the department is named as the remainder 
31.24 	beneficiary in second position for an amount equal to at least the total amount of medical 
31.25 	assistance paid on behalf of the individual or the individual's spouse after the individual's 
31.26 	community spouse or minor or disabled child and is named as the remainder beneficiary in 
31.27 	the first position if the community spouse or a representative of the minor or disabled child 
31.28 	disposes of the remainder for less than fair market value. Any subsequent change to the 
31.29 	designation of the department as a remainder beneficiary shall result in the annuity being 
31.30 	treated as a disposal of assets for less than fair market value. The amount of such transfer 
31.31 	shall be the maximum amount the individual or the individual's spouse could receive from 
31.32 	the annuity or similar financial instrument. Any change in the amount of the income or 
31.33 	principal being withdrawn from the annuity or other similar financial instrument at the 
31.34 	time of the most recent disclosure shall be deemed to be a transfer of assets for less than 
31.35 	fair market value unless the individual or the individual's spouse demonstrates that the 
31.36 	transaction was for fair market value; and
32.1 	(2) the purchase of an annuity by or on behalf of an individual applying for or 
32.2 	receiving long-term care services shall be treated as a disposal of assets for less than fair 
32.3 	market value unless it is:
32.4 	(i) an annuity described in subsection (b) or (q) of section 408 of the Internal 
32.5 	Revenue Code of 1986; or 
32.6 	(ii) purchased with proceeds from:
32.7 	(A) an account or trust described in subsection (a), (c), or (p) of section 408 of the 
32.8 	Internal Revenue Code;
32.9 	(B) a simplified employee pension within the meaning of section 408(k) of the 
32.10 	Internal Revenue Code; or
32.11 	(C) a Roth IRA described in section 408A of the Internal Revenue Code; or
32.12 	(iii) an annuity that is irrevocable and nonassignable; is actuarially sound as 
32.13 	determined in accordance with actuarial publications of the Office of the Chief Actuary of 
32.14 	the Social Security Administration; and provides for payments in equal amounts during 
32.15 	the term of the annuity, with no deferral and no balloon payments made.
32.16 	(f) (g) For purposes of this section, long-term care services include services in a 
32.17 	nursing facility, services that are eligible for payment according to section  256B.0625, 
32.18 	subdivision 2, because they are provided in a swing bed, intermediate care facility for 
32.19 	persons with mental retardation, and home and community-based services provided 
32.20 	pursuant to sections  256B.0915,  256B.092, and  256B.49. For purposes of this subdivision 
32.21 	and subdivisions 2, 3, and 4, "institutionalized person" includes a person who is an 
32.22 	inpatient in a nursing facility or in a swing bed, or intermediate care facility for persons 
32.23 	with mental retardation or who is receiving home and community-based services under 
32.24 	sections  256B.0915,  256B.092, and  256B.49. 
32.25 	(h) This section applies to funds used to purchase a promissory note, loan, or 
32.26 	mortgage unless the note, loan, or mortgage:
32.27 	(1) has a repayment term that is actuarially sound;
32.28 	(2) provides for payments to be made in equal amounts during the term of the loan, 
32.29 	with no deferral and no balloon payments made; and
32.30 	(3) prohibits the cancellation of the balance upon the death of the lender.
32.31 	In the case of a promissory note, loan, or mortgage that does not meet an exception 
32.32 	in clauses (1) to (3), the value of such note, loan, or mortgage shall be the outstanding 
32.33 	balance due as of the date of the individual's application for long-term care services.
32.34 	(i) This section applies to the purchase of a life estate interest in another individual's 
32.35 	home unless the purchaser resides in the home for a period of at least one year after the 
32.36 	date of purchase.

33.1 	Sec. 31. Minnesota Statutes 2005 Supplement, section 256B.0595, subdivision 2, 
33.2 	is amended to read:
33.3 		Subd. 2.Period of ineligibility. (a) For any uncompensated transfer occurring on or 
33.4 	before August 10, 1993, the number of months of ineligibility for long-term care services 
33.5 	shall be the lesser of 30 months, or the uncompensated transfer amount divided by the 
33.6 	average medical assistance rate for nursing facility services in the state in effect on the 
33.7 	date of application. The amount used to calculate the average medical assistance payment 
33.8 	rate shall be adjusted each July 1 to reflect payment rates for the previous calendar year. 
33.9 	The period of ineligibility begins with the month in which the assets were transferred. 
33.10 	If the transfer was not reported to the local agency at the time of application, and the 
33.11 	applicant received long-term care services during what would have been the period of 
33.12 	ineligibility if the transfer had been reported, a cause of action exists against the transferee 
33.13 	for the cost of long-term care services provided during the period of ineligibility, or for the 
33.14 	uncompensated amount of the transfer, whichever is less. The action may be brought by 
33.15 	the state or the local agency responsible for providing medical assistance under chapter 
33.16 	256G. The uncompensated transfer amount is the fair market value of the asset at the time 
33.17 	it was given away, sold, or disposed of, less the amount of compensation received.
33.18 	(b) For uncompensated transfers made after August 10, 1993, the number of months 
33.19 	of ineligibility for long-term care services shall be the total uncompensated value of the 
33.20 	resources transferred divided by the average medical assistance rate for nursing facility 
33.21 	services in the state in effect on the date of application. The amount used to calculate the 
33.22 	average medical assistance payment rate shall be adjusted each July 1 to reflect payment 
33.23 	rates for the previous calendar year. The period of ineligibility begins with the first day 
33.24 	of the month after the month in which the assets were transferred except that if one or 
33.25 	more uncompensated transfers are made during a period of ineligibility, the total assets 
33.26 	transferred during the ineligibility period shall be combined and a penalty period calculated 
33.27 	to begin on the first day of the month after the month in which the first uncompensated 
33.28 	transfer was made. If the transfer was reported to the local agency after the date that 
33.29 	advance notice of a period of ineligibility that affects the next month could be provided to 
33.30 	the recipient and the recipient received medical assistance services or the transfer was not 
33.31 	reported to the local agency, and the applicant or recipient received medical assistance 
33.32 	services during what would have been the period of ineligibility if the transfer had been 
33.33 	reported, a cause of action exists against the transferee for the cost of medical assistance 
33.34 	services provided during the period of ineligibility, or for the uncompensated amount of 
33.35 	the transfer, whichever is less. The action may be brought by the state or the local agency 
33.36 	responsible for providing medical assistance under chapter 256G. The uncompensated 
34.1 	transfer amount is the fair market value of the asset at the time it was given away, sold, or 
34.2 	disposed of, less the amount of compensation received. Effective for transfers made on or 
34.3 	after March 1, 1996, involving persons who apply for medical assistance on or after April 
34.4 	13, 1996, no cause of action exists for a transfer unless:
34.5 	(1) the transferee knew or should have known that the transfer was being made by a 
34.6 	person who was a resident of a long-term care facility or was receiving that level of care in 
34.7 	the community at the time of the transfer;
34.8 	(2) the transferee knew or should have known that the transfer was being made to 
34.9 	assist the person to qualify for or retain medical assistance eligibility; or
34.10 	(3) the transferee actively solicited the transfer with intent to assist the person to 
34.11 	qualify for or retain eligibility for medical assistance.
34.12 	(c) For uncompensated transfers made on or after February 8, 2006, the period of 
34.13 	ineligibility begins on the first day of the month in which advance notice can be given 
34.14 	following the month in which assets have been transferred for less than fair market value, 
34.15 	or the date on which the individual is eligible for medical assistance under the Medicaid 
34.16 	state plan and would otherwise be receiving long-term care services based on an approved 
34.17 	application for such care but for the application of the penalty period, whichever is later, 
34.18 	and which does not occur during any other period of ineligibility.
34.19 	(d) If a calculation of a penalty period results in a partial month, payments for 
34.20 	long-term care services shall be reduced in an amount equal to the fraction,.except that in 
34.21 	calculating the value of uncompensated transfers, if the total value of all uncompensated 
34.22 	transfers made in a month not included in an existing penalty period does not exceed $200, 
34.23 	then such transfers shall be disregarded for each month prior to the month of application 
34.24 	for or during receipt of medical assistance.
34.25 	(e) In the case of multiple fractional transfers of assets in more than one month for 
34.26 	less than fair market value on or after February 8, 2006, the period of ineligibility is 
34.27 	calculated by treating the total, cumulative, uncompensated value of all assets transferred 
34.28 	during all months on or after February 8, 2006, as one transfer.

34.29 	EFFECTIVE DATE. Amendments to this section are effective for applications on 
34.30 	or after July 1, 2006, and for renewals and reports of transfers on or after July 1, 2006.

34.31 	Sec. 32. Minnesota Statutes 2004, section 256B.0595, subdivision 3, is amended to 
34.32 	read:
34.33 		Subd. 3.Homestead exception to transfer prohibition. (a) An institutionalized 
34.34 	person is not ineligible for long-term care services due to a transfer of assets for less than 
34.35 	fair market value if the asset transferred was a homestead and:
35.1 	(1) title to the homestead was transferred to the individual's:
35.2 	(i) spouse;
35.3 	(ii) child who is under age 21;
35.4 	(iii) blind or permanently and totally disabled child as defined in the supplemental 
35.5 	security income program;
35.6 	(iv) sibling who has equity interest in the home and who was residing in the home 
35.7 	for a period of at least one year immediately before the date of the individual's admission 
35.8 	to the facility; or
35.9 	(v) son or daughter who was residing in the individual's home for a period of at least 
35.10 	two years immediately before the date of the individual's admission to the facility, and who 
35.11 	provided care to the individual that, as certified by the individual's attending physician, 
35.12 	permitted the individual to reside at home rather than in an institution or facility;
35.13 	(2) a satisfactory showing is made that the individual intended to dispose of the 
35.14 	homestead at fair market value or for other valuable consideration; or
35.15 	(3) the local agency grants a waiver of a penalty resulting from a transfer for less 
35.16 	than fair market value because denial of eligibility would cause undue hardship for the 
35.17 	individual, based on imminent threat to the individual's health and well-being. Whenever 
35.18 	an applicant or recipient is denied eligibility because of a transfer for less than fair market 
35.19 	value, the local agency shall notify the applicant or recipient that the applicant or recipient 
35.20 	may request a waiver of the penalty if the denial of eligibility will cause undue hardship. 
35.21 	With the written consent of the individual or the personal representative of the individual, 
35.22 	a long-term care facility in which an individual is residing may file an undue hardship 
35.23 	waiver request, on behalf of the individual who is denied eligibility for long-term care 
35.24 	services on or after July 1, 2006, due to a period of ineligibility resulting from a transfer on 
35.25 	or after February 8, 2006. In evaluating a waiver, the local agency shall take into account 
35.26 	whether the individual was the victim of financial exploitation, whether the individual has 
35.27 	made reasonable efforts to recover the transferred property or resource, and other factors 
35.28 	relevant to a determination of hardship. If the local agency does not approve a hardship 
35.29 	waiver, the local agency shall issue a written notice to the individual stating the reasons 
35.30 	for the denial and the process for appealing the local agency's decision.
35.31 	(b) When a waiver is granted under paragraph (a), clause (3), a cause of action exists 
35.32 	against the person to whom the homestead was transferred for that portion of long-term 
35.33 	care services granted within:
35.34 	(1) 30 months of a transfer made on or before August 10, 1993;
35.35 	(2) 60 months if the homestead was transferred after August 10, 1993, to a trust or 
35.36 	portion of a trust that is considered a transfer of assets under federal law; or
36.1 	(3) 36 months if transferred in any other manner after August 10, 1993, but prior 
36.2 	to February 8, 2006; or
36.3 	(4) 60 months if the homestead was transferred on or after February 8, 2006,
36.4 	or the amount of the uncompensated transfer, whichever is less, together with the 
36.5 	costs incurred due to the action. The action shall be brought by the state unless the 
36.6 	state delegates this responsibility to the local agency responsible for providing medical 
36.7 	assistance under chapter 256G.

36.8 	Sec. 33. Minnesota Statutes 2004, section 256B.0595, subdivision 4, is amended to 
36.9 	read:
36.10 		Subd. 4.Other exceptions to transfer prohibition. An institutionalized person 
36.11 	who has made, or whose spouse has made a transfer prohibited by subdivision 1, is not 
36.12 	ineligible for long-term care services if one of the following conditions applies:
36.13 	(1) the assets were transferred to the individual's spouse or to another for the sole 
36.14 	benefit of the spouse; or
36.15 	(2) the institutionalized spouse, prior to being institutionalized, transferred assets 
36.16 	to a spouse, provided that the spouse to whom the assets were transferred does not then 
36.17 	transfer those assets to another person for less than fair market value. (At the time when 
36.18 	one spouse is institutionalized, assets must be allocated between the spouses as provided 
36.19 	under section 256B.059); or
36.20 	(3) the assets were transferred to the individual's child who is blind or permanently 
36.21 	and totally disabled as determined in the supplemental security income program; or
36.22 	(4) a satisfactory showing is made that the individual intended to dispose of the 
36.23 	assets either at fair market value or for other valuable consideration; or
36.24 	(5) the local agency determines that denial of eligibility for long-term care services 
36.25 	would work an undue hardship and grants a waiver of a penalty resulting from a transfer 
36.26 	for less than fair market value based on an imminent threat to the individual's health 
36.27 	and well-being. Whenever an applicant or recipient is denied eligibility because of a 
36.28 	transfer for less than fair market value, the local agency shall notify the applicant or 
36.29 	recipient that the applicant or recipient may request a waiver of the penalty if the denial of 
36.30 	eligibility will cause undue hardship. With the written consent of the individual or the 
36.31 	personal representative of the individual, a long-term care facility in which an individual 
36.32 	is residing may file an undue hardship waiver request, on behalf of the individual who 
36.33 	is denied eligibility for long-term care services on or after July 1, 2006, due to a period 
36.34 	of ineligibility resulting from a transfer on or after February 8, 2006. In evaluating a 
36.35 	waiver, the local agency shall take into account whether the individual was the victim of 
37.1 	financial exploitation, whether the individual has made reasonable efforts to recover the 
37.2 	transferred property or resource, whether the individual has taken any action to prevent 
37.3 	the designation of the department as a remainder beneficiary on an annuity as described 
37.4 	in section 256B.056, subdivision 11, and other factors relevant to a determination of 
37.5 	hardship. If the local agency does not approve a hardship waiver, the local agency shall 
37.6 	issue a written notice to the individual stating the reasons for the denial and the process for 
37.7 	appealing the local agency's decision. When a waiver is granted, a cause of action exists 
37.8 	against the person to whom the assets were transferred for that portion of long-term care 
37.9 	services granted within:
37.10 	(i) 30 months of a transfer made on or before August 10, 1993;
37.11 	(ii) 60 months of a transfer if the assets were transferred after August 30, 1993, to a 
37.12 	trust or portion of a trust that is considered a transfer of assets under federal law; or
37.13 	(iii) 36 months of a transfer if transferred in any other manner after August 10, 1993,
37.14 	but prior to February 8, 2006; or
37.15 	(iv) 60 months of any transfer made on or after February 8, 2006,
37.16 	or the amount of the uncompensated transfer, whichever is less, together with the 
37.17 	costs incurred due to the action. The action shall be brought by the state unless the 
37.18 	state delegates this responsibility to the local agency responsible for providing medical 
37.19 	assistance under this chapter; or
37.20 	(6) for transfers occurring after August 10, 1993, the assets were transferred by 
37.21 	the person or person's spouse: (i) into a trust established for the sole benefit of a son or 
37.22 	daughter of any age who is blind or disabled as defined by the Supplemental Security 
37.23 	Income program; or (ii) into a trust established for the sole benefit of an individual who is 
37.24 	under 65 years of age who is disabled as defined by the Supplemental Security Income 
37.25 	program.
37.26 	"For the sole benefit of" has the meaning found in section  256B.059, subdivision 1. 

37.27 	Sec. 34. Minnesota Statutes 2005 Supplement, section 256B.06, subdivision 4, is 
37.28 	amended to read:
37.29 		Subd. 4.Citizenship requirements. (a) Eligibility for medical assistance is limited 
37.30 	to citizens of the United States, qualified noncitizens as defined in this subdivision, and 
37.31 	other persons residing lawfully in the United States. Citizens or nationals of the United 
37.32 	States must cooperate in obtaining satisfactory documentary evidence of citizenship or 
37.33 	nationality according to the requirements of the federal Deficit Reduction Act of 2005, 
37.34 	Public Law 109-171.
38.1 	(b) "Qualified noncitizen" means a person who meets one of the following 
38.2 	immigration criteria:
38.3 	(1) admitted for lawful permanent residence according to United States Code, title 8;
38.4 	(2) admitted to the United States as a refugee according to United States Code, 
38.5 	title 8, section 1157;
38.6 	(3) granted asylum according to United States Code, title 8, section 1158;
38.7 	(4) granted withholding of deportation according to United States Code, title 8, 
38.8 	section 1253(h);
38.9 	(5) paroled for a period of at least one year according to United States Code, title 8, 
38.10 	section 1182(d)(5);
38.11 	(6) granted conditional entrant status according to United States Code, title 8, 
38.12 	section 1153(a)(7);
38.13 	(7) determined to be a battered noncitizen by the United States Attorney General 
38.14 	according to the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, 
38.15 	title V of the Omnibus Consolidated Appropriations Bill, Public Law 104-200;
38.16 	(8) is a child of a noncitizen determined to be a battered noncitizen by the United 
38.17 	States Attorney General according to the Illegal Immigration Reform and Immigrant 
38.18 	Responsibility Act of 1996, title V, of the Omnibus Consolidated Appropriations Bill, 
38.19 	Public Law 104-200; or
38.20 	(9) determined to be a Cuban or Haitian entrant as defined in section 501(e) of Public 
38.21 	Law 96-422, the Refugee Education Assistance Act of 1980.
38.22 	(c) All qualified noncitizens who were residing in the United States before August 
38.23 	22, 1996, who otherwise meet the eligibility requirements of this chapter, are eligible for 
38.24 	medical assistance with federal financial participation.
38.25 	(d) All qualified noncitizens who entered the United States on or after August 22, 
38.26 	1996, and who otherwise meet the eligibility requirements of this chapter, are eligible for 
38.27 	medical assistance with federal financial participation through November 30, 1996.
38.28 	Beginning December 1, 1996, qualified noncitizens who entered the United States 
38.29 	on or after August 22, 1996, and who otherwise meet the eligibility requirements of this 
38.30 	chapter are eligible for medical assistance with federal participation for five years if they 
38.31 	meet one of the following criteria:
38.32 	(i) refugees admitted to the United States according to United States Code, title 8, 
38.33 	section 1157;
38.34 	(ii) persons granted asylum according to United States Code, title 8, section 1158;
38.35 	(iii) persons granted withholding of deportation according to United States Code, 
38.36 	title 8, section 1253(h);
39.1 	(iv) veterans of the United States armed forces with an honorable discharge for 
39.2 	a reason other than noncitizen status, their spouses and unmarried minor dependent 
39.3 	children; or
39.4 	(v) persons on active duty in the United States armed forces, other than for training, 
39.5 	their spouses and unmarried minor dependent children.
39.6 	Beginning December 1, 1996, qualified noncitizens who do not meet one of the 
39.7 	criteria in items (i) to (v) are eligible for medical assistance without federal financial 
39.8 	participation as described in paragraph (j).
39.9 	(e) Noncitizens who are not qualified noncitizens as defined in paragraph (b), 
39.10 	who are lawfully residing in the United States and who otherwise meet the eligibility 
39.11 	requirements of this chapter, are eligible for medical assistance under clauses (1) to (3). 
39.12 	These individuals must cooperate with the Immigration and Naturalization Service to 
39.13 	pursue any applicable immigration status, including citizenship, that would qualify them 
39.14 	for medical assistance with federal financial participation.
39.15 	(1) Persons who were medical assistance recipients on August 22, 1996, are eligible 
39.16 	for medical assistance with federal financial participation through December 31, 1996.
39.17 	(2) Beginning January 1, 1997, persons described in clause (1) are eligible for 
39.18 	medical assistance without federal financial participation as described in paragraph (j).
39.19 	(3) Beginning December 1, 1996, persons residing in the United States prior to 
39.20 	August 22, 1996, who were not receiving medical assistance and persons who arrived on 
39.21 	or after August 22, 1996, are eligible for medical assistance without federal financial 
39.22 	participation as described in paragraph (j).
39.23 	(f) Nonimmigrants who otherwise meet the eligibility requirements of this chapter 
39.24 	are eligible for the benefits as provided in paragraphs (g) to (i). For purposes of this 
39.25 	subdivision, a "nonimmigrant" is a person in one of the classes listed in United States 
39.26 	Code, title 8, section 1101(a)(15).
39.27 	(g) Payment shall also be made for care and services that are furnished to noncitizens, 
39.28 	regardless of immigration status, who otherwise meet the eligibility requirements of 
39.29 	this chapter, if such care and services are necessary for the treatment of an emergency 
39.30 	medical condition, except for organ transplants and related care and services and routine 
39.31 	prenatal care.
39.32 	(h) For purposes of this subdivision, the term "emergency medical condition" means 
39.33 	a medical condition that meets the requirements of United States Code, title 42, section 
39.34 	1396b(v).
39.35 	(i) Pregnant noncitizens who are undocumented, nonimmigrants, or eligible for 
39.36 	medical assistance as described in paragraph (j), and who are not covered by a group 
40.1 	health plan or health insurance coverage according to Code of Federal Regulations, title 
40.2 	42, section 457.310, and who otherwise meet the eligibility requirements of this chapter, 
40.3 	are eligible for medical assistance through the period of pregnancy, including labor and 
40.4 	delivery, to the extent federal funds are available under title XXI of the Social Security 
40.5 	Act, and the state children's health insurance program, followed by 60 days postpartum 
40.6 	without federal financial participation.
40.7 	(j) Qualified noncitizens as described in paragraph (d), and all other noncitizens 
40.8 	lawfully residing in the United States as described in paragraph (e), who are ineligible 
40.9 	for medical assistance with federal financial participation and who otherwise meet the 
40.10 	eligibility requirements of chapter 256B and of this paragraph, are eligible for medical 
40.11 	assistance without federal financial participation. Qualified noncitizens as described 
40.12 	in paragraph (d) are only eligible for medical assistance without federal financial 
40.13 	participation for five years from their date of entry into the United States.
40.14 	(k) Beginning October 1, 2003, persons who are receiving care and rehabilitation 
40.15 	services from a nonprofit center established to serve victims of torture and are otherwise 
40.16 	ineligible for medical assistance under this chapter are eligible for medical assistance 
40.17 	without federal financial participation. These individuals are eligible only for the period 
40.18 	during which they are receiving services from the center. Individuals eligible under this 
40.19 	paragraph shall not be required to participate in prepaid medical assistance.

40.20 	EFFECTIVE DATE. This section is effective July 1, 2006.

40.21 	Sec. 35. Minnesota Statutes 2005 Supplement, section 256D.03, subdivision 3, is 
40.22 	amended to read:
40.23 		Subd. 3.General assistance medical care; eligibility. (a) General assistance 
40.24 	medical care may be paid for any person who is not eligible for medical assistance under 
40.25 	chapter 256B, including eligibility for medical assistance based on a spenddown of excess 
40.26 	income according to section 256B.056, subdivision 5, or MinnesotaCare as defined in 
40.27 	paragraph (b), except as provided in paragraph (c), and:
40.28 	(1) who is receiving assistance under section 256D.05, except for families with 
40.29 	children who are eligible under Minnesota family investment program (MFIP), or who is 
40.30 	having a payment made on the person's behalf under sections 256I.01 to 256I.06; or
40.31 	(2) who is a resident of Minnesota; and
40.32 	(i) who has gross countable income not in excess of 75 percent of the federal poverty 
40.33 	guidelines for the family size, using a six-month budget period and whose equity in assets 
40.34 	is not in excess of $1,000 per assistance unit. Exempt assets, the reduction of excess 
40.35 	assets, and the waiver of excess assets must conform to the medical assistance program in 
41.1 	section 256B.056, subdivision 3, with the following exception: the maximum amount of 
41.2 	undistributed funds in a trust that could be distributed to or on behalf of the beneficiary by 
41.3 	the trustee, assuming the full exercise of the trustee's discretion under the terms of the 
41.4 	trust, must be applied toward the asset maximum;
41.5 	(ii) who has gross countable income above 75 percent of the federal poverty 
41.6 	guidelines but not in excess of 175 percent of the federal poverty guidelines for the 
41.7 	family size, using a six-month budget period, whose equity in assets is not in excess 
41.8 	of the limits in section 256B.056, subdivision 3c, and who applies during an inpatient 
41.9 	hospitalization; or
41.10 	(iii) the commissioner shall adjust the income standards under this section each July 
41.11 	1 by the annual update of the federal poverty guidelines following publication by the 
41.12 	United States Department of Health and Human Services.
41.13 	(b) Effective for applications and renewals processed on or after September 1, 2006, 
41.14 	general assistance medical care may not be paid for applicants or recipients who are adults 
41.15 	with dependent children under 21 whose gross family income is equal to or less than 275 
41.16 	percent of the federal poverty guidelines who are not described in paragraph (e).
41.17 	(c) Effective for applications and renewals processed on or after September 1, 2006, 
41.18 	general assistance medical care may be paid for applicants and recipients who meet all 
41.19 	eligibility requirements of paragraph (a), clause (2), item (i), for a temporary period 
41.20 	beginning the date of application. Immediately following approval of general assistance 
41.21 	medical care, enrollees shall be enrolled in MinnesotaCare under section 256L.04, 
41.22 	subdivision 7, with covered services as provided in section 256L.03 for the rest of the 
41.23 	six-month eligibility period, until their six-month renewal.
41.24 	(d) To be eligible for general assistance medical care following enrollment in 
41.25 	MinnesotaCare as required by paragraph (c), an individual must complete a new 
41.26 	application.
41.27 	(e) Applicants and recipients eligible under paragraph (a), clause (1), or; who have 
41.28 	applied for and are awaiting a determination of blindness or disability by the state medical 
41.29 	review team or a determination of eligibility for Supplemental Security Income or Social 
41.30 	Security Disability Insurance by the Social Security Administration, or; who fail to meet 
41.31 	the requirements of section 256L.09, subdivision 2, are exempt from the MinnesotaCare 
41.32 	enrollment requirements of this subdivision.
41.33 	(f) For applications received on or after October 1, 2003, eligibility may begin no 
41.34 	earlier than the date of application. For individuals eligible under paragraph (a), clause 
41.35 	(2), item (i), a redetermination of eligibility must occur every 12 months. Individuals are 
42.1 	eligible under paragraph (a), clause (2), item (ii), only during inpatient hospitalization but 
42.2 	may reapply if there is a subsequent period of inpatient hospitalization.
42.3 	(g) Beginning September 1, 2006, Minnesota health care program applications and 
42.4 	renewals completed by recipients and applicants who are persons described in paragraph 
42.5 	(c) and submitted to the county agency shall be determined for MinnesotaCare eligibility 
42.6 	by the county agency. If all other eligibility requirements of this subdivision are met, 
42.7 	eligibility for general assistance medical care shall be available in any month during which 
42.8 	MinnesotaCare enrollment is pending. Upon notification of eligibility for MinnesotaCare, 
42.9 	notice of termination for eligibility for general assistance medical care shall be sent to 
42.10 	an applicant or recipient. If all other eligibility requirements of this subdivision are 
42.11 	met, eligibility for general assistance medical care shall be available until enrollment in 
42.12 	MinnesotaCare subject to the provisions of paragraphs (c), (e), and (f).
42.13 	(h) The date of an initial Minnesota health care program application necessary to 
42.14 	begin a determination of eligibility shall be the date the applicant has provided a name, 
42.15 	address, and Social Security number, signed and dated, to the county agency or the 
42.16 	Department of Human Services. If the applicant is unable to provide a name, address, 
42.17 	Social Security number, and signature when health care is delivered due to a medical 
42.18 	condition or disability, a health care provider may act on an applicant's behalf to establish 
42.19 	the date of an initial Minnesota health care program application by providing the county 
42.20 	agency or Department of Human Services with provider identification and a temporary 
42.21 	unique identifier for the applicant. The applicant must complete the remainder of the 
42.22 	application and provide necessary verification before eligibility can be determined. The 
42.23 	county agency must assist the applicant in obtaining verification if necessary.
42.24 	(i) County agencies are authorized to use all automated databases containing 
42.25 	information regarding recipients' or applicants' income in order to determine eligibility 
42.26 	for general assistance medical care or MinnesotaCare. Such use shall be considered 
42.27 	sufficient in order to determine eligibility and premium payments by the county agency.
42.28 	(j) General assistance medical care is not available for a person in a correctional 
42.29 	facility unless the person is detained by law for less than one year in a county correctional 
42.30 	or detention facility as a person accused or convicted of a crime, or admitted as an 
42.31 	inpatient to a hospital on a criminal hold order, and the person is a recipient of general 
42.32 	assistance medical care at the time the person is detained by law or admitted on a criminal 
42.33 	hold order and as long as the person continues to meet other eligibility requirements 
42.34 	of this subdivision.
42.35 	(k) General assistance medical care is not available for applicants or recipients who 
42.36 	do not cooperate with the county agency to meet the requirements of medical assistance.
43.1 	(l) In determining the amount of assets of an individual eligible under paragraph 
43.2 	(a), clause (2), item (i), there shall be included any asset or interest in an asset, including 
43.3 	an asset excluded under paragraph (a), that was given away, sold, or disposed of for 
43.4 	less than fair market value within the 60 months preceding application for general 
43.5 	assistance medical care or during the period of eligibility. Any transfer described in this 
43.6 	paragraph shall be presumed to have been for the purpose of establishing eligibility for 
43.7 	general assistance medical care, unless the individual furnishes convincing evidence to 
43.8 	establish that the transaction was exclusively for another purpose. For purposes of this 
43.9 	paragraph, the value of the asset or interest shall be the fair market value at the time it 
43.10 	was given away, sold, or disposed of, less the amount of compensation received. For any 
43.11 	uncompensated transfer, the number of months of ineligibility, including partial months, 
43.12 	shall be calculated by dividing the uncompensated transfer amount by the average monthly 
43.13 	per person payment made by the medical assistance program to skilled nursing facilities 
43.14 	for the previous calendar year. The individual shall remain ineligible until this fixed period 
43.15 	has expired. The period of ineligibility may exceed 30 months, and a reapplication for 
43.16 	benefits after 30 months from the date of the transfer shall not result in eligibility unless 
43.17 	and until the period of ineligibility has expired. The period of ineligibility begins in the 
43.18 	month the transfer was reported to the county agency, or if the transfer was not reported, 
43.19 	the month in which the county agency discovered the transfer, whichever comes first. For 
43.20 	applicants, the period of ineligibility begins on the date of the first approved application.
43.21 	(m) When determining eligibility for any state benefits under this subdivision, 
43.22 	the income and resources of all noncitizens shall be deemed to include their sponsor's 
43.23 	income and resources as defined in the Personal Responsibility and Work Opportunity 
43.24 	Reconciliation Act of 1996, title IV, Public Law 104-193, sections 421 and 422, and 
43.25 	subsequently set out in federal rules.
43.26 	(n) Undocumented noncitizens and nonimmigrants are ineligible for general 
43.27 	assistance medical care. For purposes of this subdivision, a nonimmigrant is an individual 
43.28 	in one or more of the classes listed in United States Code, title 8, section 1101(a)(15), and 
43.29 	an undocumented noncitizen is an individual who resides in the United States without the 
43.30 	approval or acquiescence of the Immigration and Naturalization Service.
43.31 	(o) Notwithstanding any other provision of law, a noncitizen who is ineligible for 
43.32 	medical assistance due to the deeming of a sponsor's income and resources, is ineligible 
43.33 	for general assistance medical care.
43.34 	(p) Effective July 1, 2003, general assistance medical care emergency services end.
44.1 	(q) Citizens or nationals of the United States must cooperate in obtaining satisfactory 
44.2 	documentary evidence of citizenship or nationality according to the requirements of the 
44.3 	federal Deficit Reduction Act of 2005, Public Law 109-171. 

44.4 	EFFECTIVE DATE. This section is effective July 1, 2006.

44.5 	Sec. 36. Minnesota Statutes 2004, section 256L.04, subdivision 10, is amended to read:
44.6 		Subd. 10.Citizenship requirements. Eligibility for MinnesotaCare is limited 
44.7 	to citizens or nationals of the United States, qualified noncitizens, and other persons 
44.8 	residing lawfully in the United States as described in section  256B.06, subdivision 4, 
44.9 	paragraphs (a) to (e) and (j). Undocumented noncitizens and nonimmigrants are ineligible 
44.10 	for MinnesotaCare. For purposes of this subdivision, a nonimmigrant is an individual in 
44.11 	one or more of the classes listed in United States Code, title 8, section 1101(a)(15), and 
44.12 	an undocumented noncitizen is an individual who resides in the United States without 
44.13 	the approval or acquiescence of the Immigration and Naturalization Service. Citizens 
44.14 	or nationals of the United States must cooperate in obtaining satisfactory documentary 
44.15 	evidence of citizenship or nationality according to the requirements of the federal Deficit 
44.16 	Reduction Act of 2005, Public Law 109-171.

44.17 	EFFECTIVE DATE. This section is effective July 1, 2006.

44.18 	Sec. 37. DESIGNATION OF ASSETS AS CONTINGENTLY EXEMPT UNDER 
44.19 	LONG-TERM CARE PARTNERSHIP PROGRAM.
 44.20 	The commissioner of human services shall develop and present to the legislature 
44.21 	by December 15, 2006, a plan and draft legislation to allow individuals participating in 
44.22 	the long-term care partnership program established under Minnesota Statutes, section 
44.23 	256B.0571, to designate, at the time of initial application for medical assistance, assets 
44.24 	as contingently exempt.  The full fair market value of assets designated as contingently 
44.25 	exempt must not exceed a percentage, specified by the commissioner, of the full fair market 
44.26 	value of assets designated as protected under Minnesota Statutes, section 256B.0571, 
44.27 	subdivision 9.  The commissioner may specify different percentages for different categories 
44.28 	of protected assets.  Assets designated as contingently exempt shall be disregarded for 
44.29 	purposes of determining eligibility for payment of long-term care services.  If the dollar 
44.30 	amount of benefits utilized under a partnership policy is greater than the full fair market 
44.31 	value of all assets protected due to a decrease in the value of the protected assets, the plan 
44.32 	and draft legislation must allow the individual or the personal representative to designate 
44.33 	assets that are contingently exempt as protected, up to the amount of the decrease in value 
45.1 	of the protected assets.  The plan and draft legislation must provide that any contingently 
45.2 	exempt asset that is not designated as protected be subject to recovery.

45.3 	Sec. 38.  REPEALER.
 45.4 	Minnesota Statutes 2005 Supplement, section 256B.0571, subdivisions 2, 5, and 
45.5 	11, are repealed.

45.6 	ARTICLE 2
45.7 	CHILDREN AND FAMILIES FEDERAL COMPLIANCE

45.8 	Section 1. Minnesota Statutes 2004, section 256J.021, is amended to read:
45.9 	256J.021 SEPARATE STATE PROGRAM FOR USE OF STATE MONEY.
45.10 	Beginning (a) Until October 1, 2001, and each year thereafter 2006, the 
45.11 	commissioner of human services must treat MFIP expenditures made to or on behalf of 
45.12 	any minor child under section  256J.02, subdivision 2, clause (1), who is a resident of 
45.13 	this state under section  256J.12, and who is part of a two-parent eligible household as 
45.14 	expenditures under a separately funded state program and report those expenditures to the 
45.15 	federal Department of Health and Human Services as separate state program expenditures 
45.16 	under Code of Federal Regulations, title 45, section 263.5. 
45.17 	(b) Beginning October 1, 2006, the commissioner of human services must treat 
45.18 	MFIP expenditures made to or on behalf of any minor child under section 256J.02, 
45.19 	subdivision 2, clause (1), who is a resident of this state under section 256J.12, and who 
45.20 	is part of a two-parent eligible household, as expenditures under a separately funded 
45.21 	state program. These expenditures shall not count toward the state's maintenance of 
45.22 	effort (MOE) requirements under the federal Temporary Assistance to Needy Families 
45.23 	(TANF) program except if counting certain families would allow the commissioner to 
45.24 	avoid a federal penalty. Families receiving assistance under this section must comply with 
45.25 	all applicable requirements in this chapter.

45.26 	Sec. 2. Minnesota Statutes 2004, section 256J.626, subdivision 2, is amended to read:
45.27 		Subd. 2.Allowable expenditures. (a) The commissioner must restrict expenditures 
45.28 	under the consolidated fund to benefits and services allowed under title IV-A of the federal 
45.29 	Social Security Act. Allowable expenditures under the consolidated fund may include, but 
45.30 	are not limited to:
45.31 	(1) short-term, nonrecurring shelter and utility needs that are excluded from the 
45.32 	definition of assistance under Code of Federal Regulations, title 45, section  260.31, for 
45.33 	families who meet the residency requirement in section  256J.12, subdivisions 1 and 1a. 
46.1 	Payments under this subdivision are not considered TANF cash assistance and are not 
46.2 	counted towards the 60-month time limit; 
46.3 	(2) transportation needed to obtain or retain employment or to participate in other 
46.4 	approved work activities;
46.5 	(3) direct and administrative costs of staff to deliver employment services for MFIP 
46.6 	or the diversionary work program, to administer financial assistance, and to provide 
46.7 	specialized services intended to assist hard-to-employ participants to transition to work;
46.8 	(4) costs of education and training including functional work literacy and English as 
46.9 	a second language;
46.10 	(5) cost of work supports including tools, clothing, boots, and other work-related 
46.11 	expenses;
46.12 	(6) county administrative expenses as defined in Code of Federal Regulations, title 
46.13 	45, section 260(b);
46.14 	(7) services to parenting and pregnant teens;
46.15 	(8) supported work;
46.16 	(9) wage subsidies;
46.17 	(10) child care needed for MFIP or diversionary work program participants to 
46.18 	participate in social services;
46.19 	(11) child care to ensure that families leaving MFIP or diversionary work program 
46.20 	will continue to receive child care assistance from the time the family no longer qualifies 
46.21 	for transition year child care until an opening occurs under the basic sliding fee child 
46.22 	care program; and
46.23 	(12) services to help noncustodial parents who live in Minnesota and have minor 
46.24 	children receiving MFIP or DWP assistance, but do not live in the same household as the 
46.25 	child, obtain or retain employment.
46.26 	(b) Administrative costs that are not matched with county funds as provided in 
46.27 	subdivision 8 may not exceed 7.5 percent of a county's or 15 percent of a tribe's allocation 
46.28 	under this section. The commissioner shall define administrative costs for purposes of 
46.29 	this subdivision.
46.30 	(c) The commissioner may waive the cap on administrative costs for a county or tribe 
46.31 	that elects to provide an approved supported employment, unpaid work, or community 
46.32 	work experience program for a major segment of the county's or tribe's MFIP population. 
46.33 	The county or tribe must apply for the waiver on forms provided by the commissioner. In 
46.34 	no case shall total administrative costs exceed the TANF limits.

46.35 	Sec. 3. Minnesota Statutes 2004, section 518.551, subdivision 7, is amended to read:
47.1 		Subd. 7.Fees and cost recovery fees for IV-D services. (a) When a recipient of 
47.2 	IV-D services is no longer receiving assistance under the state's title IV-A, IV-E foster 
47.3 	care, medical assistance, or MinnesotaCare programs, the public authority responsible 
47.4 	for child support enforcement must notify the recipient, within five working days of the 
47.5 	notification of ineligibility, that IV-D services will be continued unless the public authority 
47.6 	is notified to the contrary by the recipient. The notice must include the implications 
47.7 	of continuing to receive IV-D services, including the available services and fees, cost 
47.8 	recovery fees, and distribution policies relating to fees.
47.9 	(b) An application fee of $25 shall be paid by the person who applies for child 
47.10 	support and maintenance collection services, except persons who are receiving public 
47.11 	assistance as defined in section   256.741 and, if enacted, the diversionary work program 
47.12 	under section   256J.95, persons who transfer from public assistance to nonpublic assistance 
47.13 	status, and minor parents and parents enrolled in a public secondary school, area learning 
47.14 	center, or alternative learning program approved by the commissioner of education. 
47.15 	(c) In the case of an individual who has never received assistance under a state 
47.16 	program funded under Title IV-A of the Social Security Act and for whom the public 
47.17 	authority has collected at least $500 of support, the public authority must impose an 
47.18 	annual federal collections fee of $25 for each case in which services are furnished. This 
47.19 	fee must be retained by the public authority from support collected on behalf of the 
47.20 	individual, but not from the first $500 collected.
47.21 	(c) (d) When the public authority provides full IV-D services to an obligee who 
47.22 	has applied for those services, upon written notice to the obligee, the public authority 
47.23 	must charge a cost recovery fee of one percent of the amount collected. This fee must 
47.24 	be deducted from the amount of the child support and maintenance collected and not 
47.25 	assigned under section   256.741 before disbursement to the obligee. This fee does not 
47.26 	apply to an obligee who: 
47.27 	(1)  is currently receiving assistance under the state's title IV-A, IV-E foster care, 
47.28 	medical assistance, or MinnesotaCare programs; or
47.29 	(2)  has received assistance under the state's title IV-A or IV-E foster care programs, 
47.30 	until the person has not received this assistance for 24 consecutive months.
47.31 	(d) (e) When the public authority provides full IV-D services to an obligor who has 
47.32 	applied for such services, upon written notice to the obligor, the public authority must 
47.33 	charge a cost recovery fee of one percent of the monthly court-ordered child support and 
47.34 	maintenance obligation. The fee may be collected through income withholding, as well 
47.35 	as by any other enforcement remedy available to the public authority responsible for 
47.36 	child support enforcement.
48.1 	(e) (f) Fees assessed by state and federal tax agencies for collection of overdue 
48.2 	support owed to or on behalf of a person not receiving public assistance must be imposed 
48.3 	on the person for whom these services are provided. The public authority upon written 
48.4 	notice to the obligee shall assess a fee of $25 to the person not receiving public assistance 
48.5 	for each successful federal tax interception. The fee must be withheld prior to the release 
48.6 	of the funds received from each interception and deposited in the general fund.
48.7 	(f) (g) Federal collections fees collected under paragraph (c) and cost recovery fees 
48.8 	collected under paragraphs (c) and (d) and (e) shall be considered child support program 
48.9 	income according to Code of Federal Regulations, title 45, section   304.50, and shall 
48.10 	be deposited in the cost recovery fee special revenue fund account established under 
48.11 	paragraph (h) (i). The commissioner of human services must elect to recover costs based 
48.12 	on either actual or standardized costs. 
48.13 	(g) (h) The limitations of this subdivision on the assessment of fees shall not apply 
48.14 	to the extent inconsistent with the requirements of federal law for receiving funds for the 
48.15 	programs under Title IV-A and Title IV-D of the Social Security Act, United States Code, 
48.16 	title 42, sections 601 to 613 and United States Code, title 42, sections 651 to 662.
48.17 	(h) (i) The commissioner of human services is authorized to establish a special 
48.18 	revenue fund account to receive child support the federal collections fees collected under 
48.19 	paragraph (c) and cost recovery fees collected under paragraphs (d) and (e). A portion of 
48.20 	the nonfederal share of these fees may be retained for expenditures necessary to administer 
48.21 	the fee fees and must be transferred to the child support system special revenue account. 
48.22 	The remaining nonfederal share of the federal collections fees and cost recovery fee fees
48.23 	must be retained by the commissioner and dedicated to the child support general fund 
48.24 	county performance-based grant account authorized under sections   256.979 and   256.9791. 

48.25 	EFFECTIVE DATE. This section is effective October 1, 2006, or later, if the 
48.26 	commissioner determines that a later implementation will not result in federal financial 
48.27 	penalties.

48.28 	ARTICLE 3
48.29 	APPROPRIATIONS AND RELATED PROVISIONS

48.30 	Section 1. SUPPLEMENTAL APPROPRIATIONS.
 48.31 	The appropriations in this article are added to or, if shown in parentheses, subtracted 
48.32 	from the appropriations enacted into law by the legislature in 2005, or other specified law, 
48.33 	to the named agencies and for the specified programs or activities. The sums shown are 
48.34 	appropriated from the general fund, or another named fund, to be available for the fiscal 
49.1 	years indicated: 2006 is the fiscal year ending June 30, 2006; 2007 is the fiscal year 
49.2 	ending June 30, 2007; and the biennium is fiscal years 2006 and 2007. Supplementary 
49.3 	appropriations and reductions to appropriations for the fiscal year ending June 30, 2006, 
49.4 	are effective the day following final enactment.

49.5				APPROPRIATIONS
	
49.6				Available for the Year
	
49.7				Ending June 30
	
49.8					2006
		2007

49.949.10
	Sec. 2. COMMISSIONER OF HUMAN 
SERVICES

49.11	Subdivision 1.Total Appropriation
 	$
	-0-
	$
	1,291,000

49.12	Summary by Fund
	
49.13	General
	-0-
	(429,000)
	
49.14	Health Care Access
	-0-
	1,720,000

49.15
49.16	Subd. 2.Children and Economic Assistance 
Management

49.17	General
	-0-
	8,000
	
49.18
49.19	Children and Economic 
Assistance Operations
	-0-
	8,000
	
49.20 	CHILDREN AND ECONOMIC 
49.21 	ASSISTANCE OPERATIONS BASE 
49.22 	ADJUSTMENT. The general fund base for 
49.23 	children and economic assistance operations 
49.24 	shall be decreased by $8,000 in fiscal year 
49.25 	2008 and $8,000 in fiscal year 2009.

49.26	Subd. 3.Health Care Grants

49.27	General
	-0-
	(325,000)
	
49.28
49.29	Medical Assistance Basic 
Health Care - Elderly Disabled
			
49.30	General
	-0-
	(325,000)

50.1	Subd.  4.Health Care Management

50.2	Summary by Fund
	
50.3	General
	-0-
	1,384,000
	
50.4	Health Care Access
	-0-
	1,720,000

50.5	(a) Health Care Administration
			
50.6	General
	-0-
	1,303,000
	
50.7 	HEALTH CARE ADMINISTRATION 
50.8 	BASE ADJUSTMENT. The general fund 
50.9 	base for health care administration shall be 
50.10 	decreased by $119,000 in fiscal year 2008 
50.11 	and decreased by $666,000 in fiscal year 
50.12 	2009.

50.13	(b) Health Care Operations
			
50.14	General
	-0-
	81,000
	
50.15	Health Care Access
	-0-
	1,720,000
	
50.16 	HEALTH CARE OPERATIONS BASE 
50.17 	ADJUSTMENT. The general fund base for 
50.18 	health care operations shall be decreased by 
50.19 	$57,000 in fiscal year 2008 and increased by 
50.20 	$13,000 in fiscal year 2009.
50.21 	HEALTH CARE OPERATIONS BASE 
50.22 	ADJUSTMENT. The health care access 
50.23 	fund base for health care operations shall be 
50.24 	decreased by $1,085,000 in fiscal year 2008 
50.25 	and $1,085,000 in fiscal year 2009.

50.26	Subd. 5.Continuing Care Grants

50.27	Summary by Fund
	
50.28	General
	-0-
	(1,589,000)
	
50.29
50.30	(a) Medical Assistance 
Long-Term Care Facilities
			
51.1	General
	-0-
	(1,275,000)
	
51.2
51.3	(b) Medical Assistance 
Long-Term Care Waivers
			
51.4	General
	-0-
	(414,000)
	
51.5
51.6	(c) Adult and Aging Services 
Grants
			
51.7	General
	-0-
	100,000
	
51.8 	AGING AND ADULT SERVICES 
51.9 	GRANTS FOR MEDICARE PART D.
51.10 	$100,000 in fiscal year 2007 is appropriated 
51.11 	from the general fund to the commissioner of 
51.12 	human services for grants awarded through 
51.13 	the Minnesota Board on Aging to area 
51.14 	Agencies on Aging to provide information 
51.15 	and enrollment assistance for the Medicare 
51.16 	Part D program.
51.17 	MEDICARE PART D INFORMATION 
51.18 	AND ASSISTANCE REIMBURSEMENT.
51.19 	Federal administrative reimbursement 
51.20 	obtained from information and assistance 
51.21 	services provided by the Senior Linkage or 
51.22 	Disability Linkage lines to people who are 
51.23 	identified as eligible for medical assistance 
51.24 	shall be appropriated to the commissioner 
51.25 	for this activity.
51.26 	AGING AND ADULT SERVICES 
51.27 	GRANTS BASE ADJUSTMENT. The 
51.28 	general fund base for aging and adult services 
51.29 	grants is decreased by $100,000 in fiscal 
51.30 	year 2008 and $100,000 in fiscal year 2009 
51.31 	for information and assistance grants to 
51.32 	area Agencies on Aging for assisting with 
51.33 	Medicare Part D.

52.1	Subd. 6.Continuing Care Management

52.2	General
	-0-
	93,000
	
52.3 	CONTINUING CARE MANAGEMENT 
52.4 	BASE ADJUSTMENT. The general fund 
52.5 	base for continuing care management shall 
52.6 	be decreased by $10,000 in fiscal year 2008 
52.7 	and fiscal year 2009.

52.8
52.9	Sec. 3. EMPLOYMENT AND ECONOMIC 
DEVELOPMENT

52.10	General
	$-0-
	$900,000
	
52.11 	BIOTECH PARTNERSHIP. (a) 
52.12 	Notwithstanding Minnesota Statutes, section 
52.13 	295.581, in fiscal year 2007, $900,000 is 
52.14 	appropriated from the general fund to the 
52.15 	commissioner of employment and economic 
52.16 	development for the direct and indirect 
52.17 	expenses of the collaborative research 
52.18 	partnership between the University of 
52.19 	Minnesota and the Mayo Foundation for 
52.20 	research in biotechnology and medical 
52.21 	genomics. This is a onetime appropriation.
52.22 	(b) An annual report on the expenditure 
52.23 	of this appropriation must be submitted 
52.24 	to the governor and the chairs of the 
52.25 	senate Higher Education Budget Division, 
52.26 	the house of representatives Higher 
52.27 	Education Finance Committee, the senate 
52.28 	Environment, Agriculture, and Economic 
52.29 	Development Budget Division, and 
52.30 	the house of representatives Jobs and 
52.31 	Economic Opportunity Policy and Finance 
52.32 	Committee by June 30 of each fiscal year 
53.1 	until the appropriation is expended. This 
53.2 	appropriation is available until expended.

53.3 	Sec. 4. Minnesota Statutes 2004, section 256B.76, is amended to read:
53.4 	256B.76 PHYSICIAN AND DENTAL REIMBURSEMENT.
53.5 	(a) Effective for services rendered on or after October 1, 1992, the commissioner 
53.6 	shall make payments for physician services as follows:
53.7 	(1) payment for level one Centers for Medicare and Medicaid Services' common 
53.8 	procedural coding system codes titled "office and other outpatient services," "preventive 
53.9 	medicine new and established patient," "delivery, antepartum, and postpartum care," 
53.10 	"critical care," cesarean delivery and pharmacologic management provided to psychiatric 
53.11 	patients, and level three codes for enhanced services for prenatal high risk, shall be paid 
53.12 	at the lower of (i) submitted charges, or (ii) 25 percent above the rate in effect on June 
53.13 	30, 1992. If the rate on any procedure code within these categories is different than the 
53.14 	rate that would have been paid under the methodology in section  256B.74, subdivision 2, 
53.15 	then the larger rate shall be paid; 
53.16 	(2) payments for all other services shall be paid at the lower of (i) submitted charges, 
53.17 	or (ii) 15.4 percent above the rate in effect on June 30, 1992;
53.18 	(3) all physician rates shall be converted from the 50th percentile of 1982 to the 50th 
53.19 	percentile of 1989, less the percent in aggregate necessary to equal the above increases 
53.20 	except that payment rates for home health agency services shall be the rates in effect 
53.21 	on September 30, 1992;
53.22 	(4) effective for services rendered on or after January 1, 2000, payment rates for 
53.23 	physician and professional services shall be increased by three percent over the rates in 
53.24 	effect on December 31, 1999, except for home health agency and family planning agency 
53.25 	services; and
53.26 	(5) the increases in clause (4) shall be implemented January 1, 2000, for managed 
53.27 	care.
53.28 	(b) Effective for services rendered on or after October 1, 1992, the commissioner 
53.29 	shall make payments for dental services as follows:
53.30 	(1) dental services shall be paid at the lower of (i) submitted charges, or (ii) 25 
53.31 	percent above the rate in effect on June 30, 1992;
53.32 	(2) dental rates shall be converted from the 50th percentile of 1982 to the 50th 
53.33 	percentile of 1989, less the percent in aggregate necessary to equal the above increases;
54.1 	(3) effective for services rendered on or after January 1, 2000, payment rates for 
54.2 	dental services shall be increased by three percent over the rates in effect on December 
54.3 	31, 1999;
54.4 	(4) the commissioner shall award grants to community clinics or other nonprofit 
54.5 	community organizations, political subdivisions, professional associations, or other 
54.6 	organizations that demonstrate the ability to provide dental services effectively to public 
54.7 	program recipients. Grants may be used to fund the costs related to coordinating access for 
54.8 	recipients, developing and implementing patient care criteria, upgrading or establishing 
54.9 	new facilities, acquiring furnishings or equipment, recruiting new providers, or other 
54.10 	development costs that will improve access to dental care in a region. In awarding grants, 
54.11 	the commissioner shall give priority to applicants that plan to serve areas of the state in 
54.12 	which the number of dental providers is not currently sufficient to meet the needs of 
54.13 	recipients of public programs or uninsured individuals. The commissioner shall consider 
54.14 	the following in awarding the grants:
54.15 	(i) potential to successfully increase access to an underserved population;
54.16 	(ii) the ability to raise matching funds;
54.17 	(iii) the long-term viability of the project to improve access beyond the period 
54.18 	of initial funding;
54.19 	(iv) the efficiency in the use of the funding; and
54.20 	(v) the experience of the proposers in providing services to the target population.
54.21 	The commissioner shall monitor the grants and may terminate a grant if the grantee 
54.22 	does not increase dental access for public program recipients. The commissioner shall 
54.23 	consider grants for the following:
54.24 	(i) implementation of new programs or continued expansion of current access 
54.25 	programs that have demonstrated success in providing dental services in underserved 
54.26 	areas;
54.27 	(ii) a pilot program for utilizing hygienists outside of a traditional dental office to 
54.28 	provide dental hygiene services; and
54.29 	(iii) a program that organizes a network of volunteer dentists, establishes a system to 
54.30 	refer eligible individuals to volunteer dentists, and through that network provides donated 
54.31 	dental care services to public program recipients or uninsured individuals;
54.32 	(5) beginning October 1, 1999, the payment for tooth sealants and fluoride treatments 
54.33 	shall be the lower of (i) submitted charge, or (ii) 80 percent of median 1997 charges;
54.34 	(6) the increases listed in clauses (3) and (5) shall be implemented January 1, 2000, 
54.35 	for managed care; and
55.1 	(7) effective for services provided on or after January 1, 2002, payment for 
55.2 	diagnostic examinations and dental x-rays provided to children under age 21 shall be the 
55.3 	lower of (i) the submitted charge, or (ii) 85 percent of median 1999 charges.
55.4 	(c) Effective for dental services rendered on or after January 1, 2002, the 
55.5 	commissioner may, within the limits of available appropriation, increase reimbursements 
55.6 	to dentists and dental clinics deemed by the commissioner to be critical access dental 
55.7 	providers. Reimbursement to a critical access dental provider may be increased by not 
55.8 	more than 50 percent above the reimbursement rate that would otherwise be paid to 
55.9 	the provider. Payments to health plan companies shall be adjusted to reflect increased 
55.10 	reimbursements to critical access dental providers as approved by the commissioner. 
55.11 	In determining which dentists and dental clinics shall be deemed critical access dental 
55.12 	providers, the commissioner shall review:
55.13 	(1) the utilization rate in the service area in which the dentist or dental clinic operates 
55.14 	for dental services to patients covered by medical assistance, general assistance medical 
55.15 	care, or MinnesotaCare as their primary source of coverage;
55.16 	(2) the level of services provided by the dentist or dental clinic to patients covered 
55.17 	by medical assistance, general assistance medical care, or MinnesotaCare as their primary 
55.18 	source of coverage; and
55.19 	(3) whether the level of services provided by the dentist or dental clinic is critical to 
55.20 	maintaining adequate levels of patient access within the service area.
55.21 	In the absence of a critical access dental provider in a service area, the commissioner may 
55.22 	designate a dentist or dental clinic as a critical access dental provider if the dentist or 
55.23 	dental clinic is willing to provide care to patients covered by medical assistance, general 
55.24 	assistance medical care, or MinnesotaCare at a level which significantly increases access 
55.25 	to dental care in the service area.
55.26 	The commissioner shall annually establish a reimbursement schedule for critical 
55.27 	access dental providers and provider-specific limits on total reimbursement received 
55.28 	under the reimbursement schedule, and shall notify each critical access dental provider 
55.29 	of the schedule and limit.
55.30 	(d) An entity that operates both a Medicare certified comprehensive outpatient 
55.31 	rehabilitation facility and a facility which was certified prior to January 1, 1993, that is 
55.32 	licensed under Minnesota Rules, parts 9570.2000 to 9570.3600, and for whom at least 33 
55.33 	percent of the clients receiving rehabilitation services in the most recent calendar year are 
55.34 	medical assistance recipients, shall be reimbursed by the commissioner for rehabilitation 
55.35 	services at rates that are 38 percent greater than the maximum reimbursement rate 
55.36 	allowed under paragraph (a), clause (2), when those services are (1) provided within the 
56.1 	comprehensive outpatient rehabilitation facility and (2) provided to residents of nursing 
56.2 	facilities owned by the entity.
56.3 	(e) Effective for services rendered on or after January 1, 2007, the commissioner 
56.4 	shall make payments for physician and professional services based on the Medicare 
56.5 	relative value units (RVUs). This change shall be budget neutral and the cost of 
56.6 	implementing RVUs will be incorporated in the established conversion factor.

56.7 	Sec. 5. PHARMACY PAYMENT REFORM ADVISORY COMMITTEE.
 56.8 		Subdivision 1.Definitions. For purposes of this section, the following words, terms, 
56.9 	and phrases have the following meanings:
56.10 	(a) "Department" means the Department of Human Services.
56.11 	(b) "Commissioner" means the commissioner of the Department of Human Services.
56.12 	(c) "Cost of dispensing" includes, but is not limited to, operational and overhead 
56.13 	costs; professional counseling as required under the Omnibus Budget Reconciliation Act 
56.14 	of 1990, excluding medication management services under Minnesota Statutes, section 
56.15 	256B.0625, subdivision 13h; salaries; and other associated administrative costs, as well 
56.16 	as a reasonable return on investment. In addition, cost of dispensing includes expenses 
56.17 	transferred by wholesale drug distributors to pharmacies as a result of the wholesale drug 
56.18 	distributor tax under Minnesota Statutes, sections 295.52 to 295.582.
56.19 	(d) "Additional costs" include, but are not limited to, costs relating to coordination of 
56.20 	benefits, bad debt, uncollected co-pays, payment lag times, and high rate of rejected claims.
56.21 	(e) "Advisory committee" means the Pharmacy Payment Reform Advisory 
56.22 	Committee established by this section.
56.23 		Subd. 2.Advisory committee. The Pharmacy Payment Reform Advisory 
56.24 	Committee is established under the direction of the commissioner of human services. 
56.25 	The commissioner, after receiving recommendations from the Minnesota Pharmacists 
56.26 	Association, the Minnesota Retailers Association, the Minnesota Hospital Association, 
56.27 	and the Minnesota Wholesale Druggists Association, shall convene a pharmacy payment 
56.28 	reform advisory committee to advise the commissioner and make recommendations to the 
56.29 	legislature on implementation of pharmacy reforms contained in title VI, chapter IV, of 
56.30 	the Deficit Reduction Act of 2005. The committee shall be comprised of three licensed 
56.31 	pharmacists representing both independent and chain pharmacy entities, one of whom 
56.32 	must have expertise in pharmacoeconomics, two individuals representing hospitals with 
56.33 	outpatient pharmacies, and two individuals with expertise in wholesale drug distribution. 
56.34 	The committee shall be staffed by an employee of the department who shall serve as an ex 
56.35 	officio nonvoting member of the committee. The department's pharmacy program manager 
57.1 	shall also serve as an ex officio, nonvoting member of the committee. The committee is 
57.2 	governed by Minnesota Statutes, section 15.059, except that committee members do not 
57.3 	receive compensation or reimbursement for expenses. The advisory committee members 
57.4 	shall serve a two-year term and the advisory committee will expire on January 31, 2008.
57.5 		Subd. 3.Cost of dispensing study. The department shall conduct a prescription 
57.6 	drug cost of dispensing study to determine the average cost of dispensing Medicaid 
57.7 	prescriptions in Minnesota. The department shall contract with an independent third 
57.8 	party in the state that has experience conducting business cost allocation studies, such as 
57.9 	an academic institution, to conduct a prescription drug cost of dispensing study. If no 
57.10 	independent third-party entity exists in the state, the department may contract with an 
57.11 	out-of-state entity. The cost of dispensing study shall be completed by an independent 
57.12 	third party no later than October 1, 2006, and reported to the department and the advisory 
57.13 	committee upon completion.
57.14 		Subd. 4.Content of study. The study shall determine the cost of dispensing 
57.15 	the average prescription and any additional costs that might be incurred for dispensing 
57.16 	Medicaid prescriptions. The study shall include the current level of dispensing fees paid 
57.17 	to providers and an estimate of revenues required to adequately adjust reimbursement 
57.18 	to cover the cost to pharmacies.
57.19 		Subd. 5.Methodology of study and publishing requirement. The independent 
57.20 	third-party entity performing the cost of dispensing research shall submit to the advisory 
57.21 	committee the entity's proposed research methodology and shall publish the collected data 
57.22 	to allow other independent researchers to validate the study results. The data shall be 
57.23 	published in a manner that does not identify the source of the data.
57.24 		Subd. 6.Recommendations. The advisory committee shall use the information 
57.25 	from the cost of dispensing study and make recommendations to the commissioner on 
57.26 	implementation of pharmacy reforms contained in title VI, chapter IV, of the Deficit 
57.27 	Reduction Act of 2005. The commissioner shall report the findings of the study and 
57.28 	the recommendations of the advisory committee to the legislature by January 15, 2007. 
57.29 	The department shall conduct a cost of dispensing study every three years following the 
57.30 	initial report. The commissioner, in consultation with the advisory committee, shall make 
57.31 	recommendations to the legislature on how to adequately adjust reimbursement rates to 
57.32 	pharmacies to cover the costs of dispensing and additional costs to pharmacies. Reports 
57.33 	shall include the current level of dispensing fees paid to providers and an estimate of 
57.34 	revenues required to adequately adjust reimbursement to ensure that:
58.1 	(1) reimbursement is sufficient to enlist an adequate number of participating 
58.2 	pharmacy providers so that pharmacy services are as available for Medicaid recipients 
58.3 	under the program as for the state's general population;
58.4 	(2) Medicaid dispensing fees are adequate to reimburse pharmacy providers for the 
58.5 	costs of dispensing prescriptions under the Medicaid program;
58.6 	(3) Medicaid pharmacy reimbursement for multiple-source drugs included on the 
58.7 	federal upper reimbursement limit is set at the level established by the federal government 
58.8 	under United States Code, title 42, section 1396r-8(e)(5);
58.9 	(4) the combined Medicaid program reimbursement for prescription drug product 
58.10 	and the dispensing fee provides a return adequate to provide a reasonable profit for the 
58.11 	participating pharmacy; and
58.12 	(5) the new payment system does not create disincentives for pharmacists to 
58.13 	dispense generic drugs.

58.14 	EFFECTIVE DATE. This section is effective the day following final enactment.