HF 41

as introduced - 84th Legislature, 2005 1st Special Session (2005 - 2005) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; eliminating the MinnesotaCare
limited benefit set for adults without children;
providing an increase for certain facilities and
providers; repealing the MA and alternative care cost
recovery and lien provisions; reducing fees for
parents of children on TEFRA and other programs;
permitting individuals and small employers to purchase
health insurance through state plans; reducing health
care taxes; establishing a prescription drug discount
program; reducing the county share for long-term
placements; adding a health care cost containment fee
on cigarette distributors; reducing expenditures for
professional contracts; reducing spending on managed
care and health care access fund; increasing
MinnesotaCare premiums; transferring funds;
appropriating money; amending Minnesota Statutes 2004,
sections 43A.27, subdivision 2, by adding a
subdivision; 252.27, subdivision 2a; 256B.15,
subdivisions 1, 1a, 2, 3, 4; 256B.19, subdivision 1;
256B.431, by adding a subdivision; 256B.5012, by
adding a subdivision; 256B.765; 256L.02, by adding a
subdivision; 256L.03, subdivision 1; 256L.04,
subdivisions 1, 7a, by adding subdivisions; 256L.05,
subdivisions 1, 3a; 256L.07, as amended; 256L.09, by
adding a subdivision; 256L.12, subdivision 6; 256L.15,
subdivisions 2, as amended, 3, by adding a
subdivision; 256L.17, subdivision 5; 295.52,
subdivisions 1, 1a, 2, 3; 325D.32, subdivision 9;
514.981, subdivision 6; 524.3-805; proposing coding
for new law in Minnesota Statutes, chapters 43A; 62J;
256; repealing Minnesota Statutes 2004, sections
256B.15, subdivisions 1c, 1d, 1e, 1f, 1g, 1h, 1i, 1j,
1k; 256L.035; 514.991; 514.992; 514.993; 514.994;
514.995.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

HEALTH CARE INITIATIVES

Section 1.

new text begin [62J.27] HEALTH CARE COST CONTAINMENT FEE.
new text end

new text begin Subdivision 1. new text end

new text begin Imposition of fee. new text end

new text begin A health care cost
containment fee is imposed on and collected from cigarette
distributors to recover for the state health costs related to or
caused by smoking and to reduce smoking, particularly by youths.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin The definitions under section
297F.01 apply to this section.
new text end

new text begin Subd. 3. new text end

new text begin Computation of fee. new text end

new text begin (a) The legislature shall
biennially set the amount of the fee by law based on an estimate
of the health costs to the state of cigarette smoking. The fee
for fiscal year 2006 and for each succeeding fiscal year is
$133,000,000 until modified by law.
new text end

new text begin (b) For each fiscal year, the commissioner shall determine
each cigarette distributor's fee and notify the distributor by
the first day of May preceding the beginning of the fiscal
year. A distributor's fee is determined by multiplying the
total fee under paragraph (a) by a fraction, the numerator of
which is the number of tax stamps purchased by the distributor
under chapter 297F in the calendar year ending during the
previous fiscal year and the denominator of which is the total
number of tax stamps purchased under chapter 297F in that period
by all distributors.
new text end

new text begin Subd. 4. new text end

new text begin Successors in interest; new entrants. new text end

new text begin (a) A
"distributor" includes any individual or entity that is the
successor in interest to a distributor, including any entity
that has substantially acquired the business assets of a
distributor. The successor in interest is liable for the fee
under this section. The commissioner shall calculate and impose
the fee on a successor in interest on a basis that includes the
purchases of tax stamps by its predecessor, as well as any
purchases made by the successor entity or person itself, during
the relevant period.
new text end

new text begin (b) If a distributor did not purchase tax stamps for at
least 500,000 cigarettes in each month of the calendar year
ending during the previous fiscal year, the fee under this
section must be applied at the rate under subdivision 6 for the
fiscal year. The commissioner shall notify the distributor that
its fee will be calculated and imposed under this paragraph by
the first day of May preceding the fiscal year and the
distributor shall pay the fee with each of its monthly tax
returns filed under section 297F.09 for the fiscal year.
new text end

new text begin Subd. 5. new text end

new text begin Payment. new text end

new text begin A distributor must pay the fee in
equal monthly installments in the same time and manner as
provided for payment of tax under chapter 297F. The
commissioner shall bill distributors for the fee. This may be
done at the time the commissioner notifies the distributor of
its annual liability for the fee or at another time or in a
manner the commissioner determines to be adequate and
appropriate.
new text end

new text begin Subd. 6. new text end

new text begin Fee on use of unstamped cigarettes. new text end

new text begin (a) The
commissioner shall estimate the average rate of the fee under
this section on a per cigarette basis for each fiscal year to
which the fee applies. The commissioner shall publish this rate
in the State Register by June 15 preceding the beginning of the
fiscal year.
new text end

new text begin (b) Any person, other than a distributor, that purchases or
possesses cigarettes that have not been stamped or taxed under
chapter 297F is liable for the fee under this section on the
possession or use of those cigarettes at the rate published in
the State Register for the fiscal year.
new text end

new text begin Subd. 7. new text end

new text begin Administration. new text end

new text begin The audit, assessment,
interest, appeal, refund, and collection provisions applicable
to the taxes imposed under chapter 297F apply to the fee imposed
under this section.
new text end

new text begin Subd. 8. new text end

new text begin License revocation. new text end

new text begin (a) The commissioner may
revoke or suspend the license of a distributor for failure to
pay the fee or otherwise comply with the requirements under this
section. The provisions and procedures under section 297F.04
apply to a suspension or revocation under this subdivision.
new text end

new text begin (b) The commissioner may revoke a retailer's sales or use
tax permit under section 297F.185 if:
new text end

new text begin (1) the retailer, directly or indirectly, purchases for
resale 20,000 cigarettes or more from a distributor that has not
paid the fee under this section; and
new text end

new text begin (2) the commissioner has notified the person that the
distributor has not paid the fee before the purchase was made or
the commissioner has posted notice that the distributor is in
violation of the fee law on the department's Web site at least
15 days before the sale was made.
new text end

new text begin Subd. 9. new text end

new text begin Deposit of revenues. new text end

new text begin The commissioner shall
deposit the revenues from the fee under this section in the
health care cost containment dedicated account.
new text end

new text begin Subd. 10. new text end

new text begin Exemption; administrative procedure act. new text end

new text begin The
commissioner's calculations of the fee amounts under this
section are not subject to the provisions of the Administrative
Procedure Act, chapter 14.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
The fee for fiscal year 2006 applies at five-sixths the amount
under section 62J.27, subdivision 3, and payments are due in ten
equal monthly installments beginning in September 2005. The
commissioner of revenue shall notify distributors of their
liability for the fee and monthly payment schedule by no later
than August 15, 2005.
new text end

Sec. 2.

Minnesota Statutes 2004, section 252.27,
subdivision 2a, is amended to read:

Subd. 2a.

Contribution amount.

(a) The natural or
adoptive parents of a minor child, including a child determined
eligible for medical assistance without consideration of
parental income, must contribute to the cost of services used by
making monthly payments on a sliding scale based on income,
unless the child is married or has been married, parental rights
have been terminated, or the child's adoption is subsidized
according to section 259.67 or through title IV-E of the Social
Security Act.

(b) For households with adjusted gross income equal to or
greater than 100 percent of federal poverty guidelines, the
parental contribution shall be computed by applying the
following schedule of rates to the adjusted gross income of the
natural or adoptive parents:

(1) if the adjusted gross income is equal to or greater
than 100 percent of federal poverty guidelines and less than 175
percent of federal poverty guidelines, the parental contribution
is $4 per month;

(2) if the adjusted gross income is equal to or greater
than 175 percent of federal poverty guidelines and less than or
equal to deleted text begin 375 deleted text end new text begin 545 new text end percent of federal poverty guidelines, the
parental contribution shall be determined using a sliding fee
scale established by the commissioner of human services which
begins at one percent of adjusted gross income at 175 percent of
federal poverty guidelines and increases to 7.5 percent of
adjusted gross income for those with adjusted gross income up to
deleted text begin 375 deleted text end new text begin 545 new text end percent of federal poverty guidelines;

(3) if the adjusted gross income is greater than deleted text begin 375 deleted text end new text begin 545
new text end percent of federal poverty guidelines and less than 675 percent
of federal poverty guidelines, the parental contribution shall
be 7.5 percent of adjusted gross income;

(4) if the adjusted gross income is equal to or greater
than 675 percent of federal poverty guidelines and less than 975
percent of federal poverty guidelines, the parental contribution
shall be new text begin determined using a sliding fee scale established by the
commissioner of human services which begins at 7.5 percent of
adjusted gross income at 675 percent of federal poverty
guidelines and increases to new text end ten percent of adjusted gross income
new text begin for those with adjusted gross income up to 975 percent of
federal poverty guidelines new text end ; and

(5) if the adjusted gross income is equal to or greater
than 975 percent of federal poverty guidelines, the parental
contribution shall be 12.5 percent of adjusted gross income.

If the child lives with the parent, the annual adjusted
gross income is reduced by $2,400 prior to calculating the
parental contribution. If the child resides in an institution
specified in section 256B.35, the parent is responsible for the
personal needs allowance specified under that section in
addition to the parental contribution determined under this
section. The parental contribution is reduced by any amount
required to be paid directly to the child pursuant to a court
order, but only if actually paid.

(c) The household size to be used in determining the amount
of contribution under paragraph (b) includes natural and
adoptive parents and their dependents, including the child
receiving services. Adjustments in the contribution amount due
to annual changes in the federal poverty guidelines shall be
implemented on the first day of July following publication of
the changes.

(d) For purposes of paragraph (b), "income" means the
adjusted gross income of the natural or adoptive parents
determined according to the previous year's federal tax form,
except, effective retroactive to July 1, 2003, taxable capital
gains to the extent the funds have been used to purchase a home
shall not be counted as income.

(e) The contribution shall be explained in writing to the
parents at the time eligibility for services is being
determined. The contribution shall be made on a monthly basis
effective with the first month in which the child receives
services. Annually upon redetermination or at termination of
eligibility, if the contribution exceeded the cost of services
provided, the local agency or the state shall reimburse that
excess amount to the parents, either by direct reimbursement if
the parent is no longer required to pay a contribution, or by a
reduction in or waiver of parental fees until the excess amount
is exhausted.

(f) The monthly contribution amount must be reviewed at
least every 12 months; when there is a change in household size;
and when there is a loss of or gain in income from one month to
another in excess of ten percent. The local agency shall mail a
written notice 30 days in advance of the effective date of a
change in the contribution amount. A decrease in the
contribution amount is effective in the month that the parent
verifies a reduction in income or change in household size.

(g) Parents of a minor child who do not live with each
other shall each pay the contribution required under paragraph
(a). An amount equal to the annual court-ordered child support
payment actually paid on behalf of the child receiving services
shall be deducted from the adjusted gross income of the parent
making the payment prior to calculating the parental
contribution under paragraph (b).

(h) The contribution under paragraph (b) shall be increased
by an additional five percent if the local agency determines
that insurance coverage is available but not obtained for the
child. For purposes of this section, "available" means the
insurance is a benefit of employment for a family member at an
annual cost of no more than five percent of the family's annual
income. For purposes of this section, "insurance" means health
and accident insurance coverage, enrollment in a nonprofit
health service plan, health maintenance organization,
self-insured plan, or preferred provider organization.

Parents who have more than one child receiving services
shall not be required to pay more than the amount for the child
with the highest expenditures. There shall be no resource
contribution from the parents. The parent shall not be required
to pay a contribution in excess of the cost of the services
provided to the child, not counting payments made to school
districts for education-related services. Notice of an increase
in fee payment must be given at least 30 days before the
increased fee is due.

(i) The contribution under paragraph (b) shall be reduced
by $300 per fiscal year if, in the 12 months prior to July 1:

(1) the parent applied for insurance for the child;

(2) the insurer denied insurance;

(3) the parents submitted a complaint or appeal, in writing
to the insurer, submitted a complaint or appeal, in writing, to
the commissioner of health or the commissioner of commerce, or
litigated the complaint or appeal; and

(4) as a result of the dispute, the insurer reversed its
decision and granted insurance.

For purposes of this section, "insurance" has the meaning
given in paragraph (h).

A parent who has requested a reduction in the contribution
amount under this paragraph shall submit proof in the form and
manner prescribed by the commissioner or county agency,
including, but not limited to, the insurer's denial of
insurance, the written letter or complaint of the parents, court
documents, and the written response of the insurer approving
insurance. The determinations of the commissioner or county
agency under this paragraph are not rules subject to chapter 14.

Sec. 3.

new text begin [256.9545] PRESCRIPTION DRUG DISCOUNT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment; administration. new text end

new text begin The
commissioner shall establish and administer the prescription
drug discount program, effective January 1, 2006.
new text end

new text begin Subd. 2. new text end [COMMISSIONER'S AUTHORITY.] new text begin The commissioner
shall administer a drug rebate program for drugs purchased
according to the prescription drug discount program. The
commissioner shall require a rebate agreement from all
manufacturers of covered drugs as defined in section 256B.0625,
subdivision 13. For each drug, the amount of the rebate shall
be equal to the rebate as defined for purposes of the federal
rebate program in United States Code, title 42, section
1396r-8. The rebate program shall utilize the terms and
conditions used for the federal rebate program established
according to section 1927 of title XIX of the federal Social
Security Act.
new text end

new text begin Subd. 3. new text end

new text begin Definitions. new text end

new text begin For the purpose of this section,
the following terms have the meanings given them.
new text end

new text begin (a) "Commissioner" means the commissioner of human services.
new text end

new text begin (b) "Manufacturer" means a manufacturer as defined in
section 151.44, paragraph (c).
new text end

new text begin (c) "Covered prescription drug" means a prescription drug
as defined in section 151.44, paragraph (d), that is covered
under medical assistance as described in section 256B.0625,
subdivision 13, and that is provided by a manufacturer that has
a fully executed rebate agreement with the commissioner under
this section and complies with that agreement.
new text end

new text begin (d) "Health carrier" means an insurance company licensed
under chapter 60A to offer, sell, or issue an individual or
group policy of accident and sickness insurance as defined in
section 62A.01; a nonprofit health service plan corporation
operating under chapter 62C; a health maintenance organization
operating under chapter 62D; a joint self-insurance employee
health plan operating under chapter 62H; a community integrated
systems network licensed under chapter 62N; a fraternal benefit
society operating under chapter 64B; a city, county, school
district, or other political subdivision providing self-insured
health coverage under section 471.617 or sections 471.98 to
471.982; and a self-funded health plan under the Employee
Retirement Income Security Act of 1974, as amended.
new text end

new text begin (e) "Participating pharmacy" means a pharmacy as defined in
section 151.01, subdivision 2, that agrees to participate in the
prescription drug discount program.
new text end

new text begin (f) "Enrolled individual" means a person who is eligible
for the program under subdivision 4 and has enrolled in the
program according to subdivision 5.
new text end

new text begin Subd. 4. new text end

new text begin Eligible persons. new text end

new text begin To be eligible for the
program, an applicant must:
new text end

new text begin (1) be a permanent resident of Minnesota as defined in
section 256L.09, subdivision 4;
new text end

new text begin (2) not be enrolled in Medicare, medical assistance,
general assistance medical care, MinnesotaCare, or the
prescription drug program under section 256.955;
new text end

new text begin (3) not be enrolled in and have currently available
prescription drug coverage under a health plan offered by a
health carrier or employer or under a pharmacy benefit program
offered by a pharmaceutical manufacturer; and
new text end

new text begin (4) not be enrolled in and have currently available
prescription drug coverage under a Medicare supplement plan, as
defined in sections 62A.31 to 62A.44, or policies, contracts, or
certificates that supplement Medicare issued by health
maintenance organizations or those policies, contracts, or
certificates governed by section 1833 or 1876 of the federal
Social Security Act, United States Code, title 42, section 1395,
et seq., as amended.
new text end

new text begin Subd. 5. new text end

new text begin Application procedure. new text end

new text begin (a) Applications and
information on the program must be made available at county
social services agencies, health care provider offices, and
agencies and organizations serving senior citizens. Individuals
shall submit applications and any information specified by the
commissioner as being necessary to verify eligibility directly
to the commissioner. The commissioner shall determine an
applicant's eligibility for the program within 30 days from the
date the application is received. Upon notice of approval, the
applicant must submit to the commissioner the enrollment fee
specified in subdivision 10. Eligibility begins the month after
the enrollment fee is received by the commissioner.
new text end

new text begin (b) An enrollee's eligibility must be renewed every 12
months with the 12-month period beginning in the month after the
application is approved.
new text end

new text begin (c) The commissioner shall develop an application form that
does not exceed one page in length and requires information
necessary to determine eligibility for the program.
new text end

new text begin Subd. 6. new text end

new text begin Participating pharmacy. new text end

new text begin According to a valid
prescription, a participating pharmacy must sell a covered
prescription drug to an enrolled individual at the pharmacy's
usual and customary retail price, minus an amount that is equal
to the rebate amount described in subdivision 8, plus the amount
of any switch fee established by the commissioner under
subdivision 10. Each participating pharmacy shall provide the
commissioner with all information necessary to administer the
program, including, but not limited to, information on
prescription drug sales to enrolled individuals and usual and
customary retail prices.
new text end

new text begin Subd. 7. new text end

new text begin Notification of rebate amount. new text end

new text begin The commissioner
shall notify each drug manufacturer, each calendar quarter or
according to a schedule to be established by the commissioner,
of the amount of the rebate owed on the prescription drugs sold
by participating pharmacies to enrolled individuals.
new text end

new text begin Subd. 8. new text end

new text begin Provision of rebate. new text end

new text begin To the extent that a
manufacturer's prescription drugs are prescribed to a resident
of this state, the manufacturer must provide a rebate equal to
the rebate provided under the medical assistance program for any
prescription drug distributed by the manufacturer that is
purchased by an enrolled individual at a participating
pharmacy. The manufacturer must provide full payment within 30
days of receipt of the state invoice for the rebate, or
according to a schedule to be established by the commissioner.
The commissioner shall deposit all rebates received into the
Minnesota prescription drug dedicated fund established under
subdivision 11. The manufacturer must provide the commissioner
with any information necessary to verify the rebate determined
per drug.
new text end

new text begin Subd. 9. new text end

new text begin Payment to pharmacies. new text end

new text begin The commissioner shall
distribute on a biweekly basis an amount that is equal to an
amount collected under subdivision 8 to each participating
pharmacy based on the prescription drugs sold by that pharmacy
to enrolled individuals.
new text end

new text begin Subd. 10. new text end

new text begin Enrollment fee; switch fee. new text end

new text begin (a) The
commissioner shall establish an annual enrollment fee that
covers the commissioner's expenses for enrollment, processing
claims, and distributing rebates under this program.
new text end

new text begin (b) The commissioner shall establish a reasonable switch
fee that covers expenses incurred by pharmacies in formatting
for electronic submission claims for prescription drugs sold to
enrolled individuals.
new text end

new text begin Subd. 11. new text end

new text begin Dedicated fund; creation; use of fund. new text end

new text begin (a) The
Minnesota prescription drug dedicated fund is established as an
account in the state treasury. The commissioner of finance
shall credit to the dedicated fund all rebates paid under
subdivision 8, any federal funds received for the program, all
enrollment fees paid by the enrollees, and any appropriations or
allocations designated for the fund. The commissioner of
finance shall ensure that fund money is invested under section
11A.25. All money earned by the fund must be credited to the
fund. The fund shall earn a proportionate share of the total
state annual investment income.
new text end

new text begin (b) Money in the fund is appropriated to the commissioner
to reimburse participating pharmacies for prescription drug
discounts provided to enrolled individuals under this section;
to reimburse the commissioner for costs related to enrollment,
processing claims, and distributing rebates and for other
reasonable administrative costs related to administration of the
prescription drug discount program; and to repay the
appropriation provided for this section. The commissioner must
administer the program so that the costs total no more than
funds appropriated plus the drug rebate proceeds.
new text end

Sec. 4.

Minnesota Statutes 2004, section 256B.19,
subdivision 1, is amended to read:

Subdivision 1.

Division of cost.

The state and county
share of medical assistance costs not paid by federal funds
shall be as follows:

(1) beginning January 1, 1992, 50 percent state funds and
50 percent county funds for the cost of placement of severely
emotionally disturbed children in regional treatment centers;

(2) beginning January 1, 2003, 80 percent state funds and
20 percent county funds for the costs of nursing facility
placements of persons with disabilities under the age of 65 that
have exceeded 90 days. This clause shall be subject to chapter
256G and shall not apply to placements in facilities not
certified to participate in medical assistance;

(3) beginning July 1, deleted text begin 2004 deleted text end new text begin 2005 new text end , 80 percent state funds and
deleted text begin 20 deleted text end new text begin 5 new text end percent county funds for the costs of placements that have
exceeded 90 days in intermediate care facilities for persons
with mental retardation or a related condition that have seven
or more beds. This provision includes pass-through payments
made under section 256B.5015; and

(4) beginning July 1, 2004, when state funds are used to
pay for a nursing facility placement due to the facility's
status as an institution for mental diseases (IMD), the county
shall pay 20 percent of the nonfederal share of costs that have
exceeded 90 days. This clause is subject to chapter 256G.

For counties that participate in a Medicaid demonstration
project under sections 256B.69 and 256B.71, the division of the
nonfederal share of medical assistance expenses for payments
made to prepaid health plans or for payments made to health
maintenance organizations in the form of prepaid capitation
payments, this division of medical assistance expenses shall be
95 percent by the state and five percent by the county of
financial responsibility.

In counties where prepaid health plans are under contract
to the commissioner to provide services to medical assistance
recipients, the cost of court ordered treatment ordered without
consulting the prepaid health plan that does not include
diagnostic evaluation, recommendation, and referral for
treatment by the prepaid health plan is the responsibility of
the county of financial responsibility.

Sec. 5.

Minnesota Statutes 2004, section 256B.431, is
amended by adding a subdivision to read:

new text begin Subd. 41. new text end

new text begin Nursing facility rate increases beginning july
1, 2005, and july 1, 2006. new text end

new text begin For the rate years beginning July 1,
2005, and July 1, 2006, the commissioner shall provide nursing
facilities reimbursed under this section, section 256B.434, or
256B.440 with an adjustment to the total operating payment rate
of three percent. At least two-thirds of each year's adjustment
must be used for increased costs of employee salaries and
benefits and associated costs for FICA, the Medicare tax,
workers' compensation premiums, and federal and state
unemployment insurance. Each facility receiving an adjustment
shall report to the commissioner, in the form and manner
specified by the commissioner, on how the additional funding was
used.
new text end

Sec. 6.

Minnesota Statutes 2004, section 256B.5012, is
amended by adding a subdivision to read:

new text begin Subd. 6. new text end

new text begin Icf/mr rate increases beginning january 1, 2006,
and january 1, 2007. new text end

new text begin For the rate years beginning January 1,
2006, and January 1, 2007, the commissioner shall provide
facilities reimbursed under this section an adjustment to the
total operating payment rate of three percent. At least
two-thirds of each year's adjustment must be used for increased
costs of employee salaries and benefits and associated costs for
FICA, the Medicare tax, workers' compensation premiums, and
federal and state unemployment insurance. Each facility
receiving an adjustment shall report to the commissioner, in the
form and manner specified by the commissioner, on how the
additional funding was used.
new text end

Sec. 7.

Minnesota Statutes 2004, section 256B.765, is
amended to read:

256B.765 PROVIDER RATE INCREASES.

new text begin Subdivision 1. new text end

new text begin Annual inflation adjustments. new text end

(a)
Effective July 1, 2001, within the limits of appropriations
specifically for this purpose, the commissioner shall provide an
annual inflation adjustment for the providers listed
in deleted text begin paragraph (c) deleted text end new text begin subdivision 2 new text end . The index for the inflation
adjustment must be based on the change in the Employment Cost
Index for Private Industry Workers - Total Compensation
forecasted by Data Resources, Inc., as forecasted in the fourth
quarter of the calendar year preceding the fiscal year. The
commissioner shall increase reimbursement or allocation rates by
the percentage of this adjustment, and county boards shall
adjust provider contracts as needed.

(b) The commissioner of finance shall include an annual
inflationary adjustment in reimbursement rates for the providers
listed in deleted text begin paragraph (c) deleted text end new text begin subdivision 2 new text end using the inflation factor
specified in paragraph (a) as a budget change request in each
biennial detailed expenditure budget submitted to the
legislature under section 16A.11.

deleted text begin (c) deleted text end new text begin Subd. 2. new text end [ELIGIBLE PROVIDERS.] The annual adjustment
under new text begin subdivision 1, new text end paragraph (a) new text begin , new text end shall be provided for home
and community-based waiver services for persons with mental
retardation or related conditions under section 256B.501; home
and community-based waiver services for the elderly under
section 256B.0915; waivered services under community
alternatives for disabled individuals under section 256B.49;
community alternative care waivered services under section
256B.49; traumatic brain injury waivered services under section
256B.49; nursing services and home health services under section
256B.0625, subdivision 6a; personal care services and nursing
supervision of personal care services under section 256B.0625,
subdivision 19a; private duty nursing services under section
256B.0625, subdivision 7; day training and habilitation services
for adults with mental retardation or related conditions under
sections 252.40 to 252.46; physical therapy services under
sections 256B.0625, subdivision 8, and 256D.03, subdivision 4;
occupational therapy services under sections 256B.0625,
subdivision 8a, and 256D.03, subdivision 4; speech-language
therapy services under section 256D.03, subdivision 4, and
Minnesota Rules, part 9505.0390; respiratory therapy services
under section 256D.03, subdivision 4, and Minnesota Rules, part
9505.0295; alternative care services under section 256B.0913;
adult residential program grants under Minnesota Rules, parts
9535.2000 to 9535.3000; adult and family community support
grants under Minnesota Rules, parts 9535.1700 to 9535.1760;
semi-independent living services under section 252.275 including
SILS funding under county social services grants formerly funded
under chapter 256I; and community support services for deaf and
hard-of-hearing adults with mental illness who use or wish to
use sign language as their primary means of communication.

new text begin Subd. 3. new text end

new text begin Rate increase for biennium beginning july 1,
2005. new text end

new text begin For the fiscal years beginning July 1, 2005, and July 1,
2006, the commissioner shall increase reimbursement rates for
the providers listed in subdivision 2 by three percent. At
least two-thirds of each year's adjustment must be used for
increased costs of employee salaries and benefits and associated
costs for FICA, the Medicare tax, workers' compensation
premiums, and federal and state unemployment insurance. Each
provider receiving an adjustment shall report to the
commissioner, in the form and manner specified by the
commissioner, on how the additional funding was used.
new text end

Sec. 8.

Minnesota Statutes 2004, section 256L.03,
subdivision 1, is amended to read:

Subdivision 1.

Covered health services.

deleted text begin For individuals
under section 256L.04, subdivision 7, with income no greater
than 75 percent of the federal poverty guidelines or for
families with children under section 256L.04, subdivision 1, all
subdivisions of this section apply. deleted text end "Covered health services"
means the health services reimbursed under chapter 256B, with
the exception of inpatient hospital services, special education
services, private duty nursing services, adult dental care
services other than services covered under section 256B.0625,
subdivision 9, paragraph (b), orthodontic services, nonemergency
medical transportation services, personal care assistant and
case management services, nursing home or intermediate care
facilities services, inpatient mental health services, and
chemical dependency services. Outpatient mental health services
covered under the MinnesotaCare program are limited to
diagnostic assessments, psychological testing, explanation of
findings, medication management by a physician, day treatment,
partial hospitalization, and individual, family, and group
psychotherapy.

No public funds shall be used for coverage of abortion
under MinnesotaCare except where the life of the female would be
endangered or substantial and irreversible impairment of a major
bodily function would result if the fetus were carried to term;
or where the pregnancy is the result of rape or incest.

Covered health services shall be expanded as provided in
this section.

Sec. 9.

Minnesota Statutes 2004, section 256L.12,
subdivision 6, is amended to read:

Subd. 6.

Co-payments and benefit limits.

Enrollees are
responsible for all co-payments in deleted text begin sections deleted text end new text begin section new text end 256L.03,
subdivision 5, deleted text begin and 256L.035, deleted text end and shall pay co-payments to the
managed care plan or to its participating providers. The
enrollee is also responsible for payment of inpatient hospital
charges which exceed the MinnesotaCare benefit limit.

Sec. 10.

Minnesota Statutes 2004, section 256L.15,
subdivision 2, as amended by Laws 2005, chapter 10, article 1,
section 57, is amended to read:

Subd. 2.

Sliding fee scale to determine percentage of
gross individual or family income.

(a) The commissioner shall
establish a sliding fee scale to determine the percentage of
gross individual or family income that households at different
income levels must pay to obtain coverage through the
MinnesotaCare program. The sliding fee scale must be based on
the enrollee's gross individual or family income. The sliding
fee scale must contain separate tables based on enrollment of
one, two, or three or more persons. The sliding fee scale
begins with a premium of deleted text begin 1.5 deleted text end new text begin 2.5 new text end percent of gross individual or
family income for individuals or families with incomes below the
limits for the medical assistance program for families and
children in effect on January 1, 1999, and proceeds through the
following evenly spaced steps: deleted text begin 1.8 deleted text end new text begin 2.8 new text end , deleted text begin 2.3 deleted text end new text begin 3.3 new text end , deleted text begin 3.1
deleted text end new text begin 4.1 new text end , deleted text begin 3.8, deleted text end 4.8, new text begin 5.8, new text end deleted text begin 5.9 deleted text end new text begin 6.9 new text end , deleted text begin 7.4 deleted text end new text begin 8.4 new text end , and deleted text begin 8.8 deleted text end new text begin 9.8
new text end percent. These percentages are matched to evenly spaced income
steps ranging from the medical assistance income limit for
families and children in effect on January 1, 1999, to 275
percent of the federal poverty guidelines for the applicable
family size, up to a family size of five. The sliding fee scale
for a family of five must be used for families of more than
five. Effective October 1, 2003, the commissioner shall
increase each percentage by 0.5 percentage points for enrollees
with income greater than 100 percent but not exceeding 200
percent of the federal poverty guidelines and shall increase
each percentage by 1.0 percentage points for families and
children with incomes greater than 200 percent of the federal
poverty guidelines. The sliding fee scale and percentages are
not subject to the provisions of chapter 14. If a family or
individual reports increased income after enrollment, premiums
shall not be adjusted until eligibility renewal.

(b) Children in families whose gross income is above 275
percent of the federal poverty guidelines shall pay the maximum
premium. The maximum premium is defined as a base charge for
one, two, or three or more enrollees so that if all
MinnesotaCare cases paid the maximum premium, the total revenue
would equal the total cost of MinnesotaCare medical coverage and
administration. In this calculation, administrative costs shall
be assumed to equal ten percent of the total. The costs of
medical coverage for pregnant women and children under age two
and the enrollees in these groups shall be excluded from the
total. The maximum premium for two enrollees shall be twice the
maximum premium for one, and the maximum premium for three or
more enrollees shall be three times the maximum premium for one.

Sec. 11.

Minnesota Statutes 2004, section 295.52,
subdivision 1, is amended to read:

Subdivision 1.

Hospital tax.

A tax is imposed on each
hospital equal to deleted text begin two deleted text end new text begin 1.5 new text end percent of its gross revenues.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 12.

Minnesota Statutes 2004, section 295.52,
subdivision 1a, is amended to read:

Subd. 1a.

Surgical center tax.

A tax is imposed on each
surgical center equal to deleted text begin two deleted text end new text begin 1.5 new text end percent of its gross revenues.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 13.

Minnesota Statutes 2004, section 295.52,
subdivision 2, is amended to read:

Subd. 2.

Provider tax.

A tax is imposed on each health
care provider equal to deleted text begin two deleted text end new text begin 1.5 new text end percent of its gross revenues.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 14.

Minnesota Statutes 2004, section 295.52,
subdivision 3, is amended to read:

Subd. 3.

Wholesale drug distributor tax.

A tax is
imposed on each wholesale drug distributor equal to deleted text begin two deleted text end new text begin 1.5
new text end percent of its gross revenues.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 15.

Minnesota Statutes 2004, section 325D.32,
subdivision 9, is amended to read:

Subd. 9.

Basic cost of cigarettes.

"Basic cost of
cigarettes" means the gross invoice cost of cigarettes to the
wholesaler or retailer plus new text begin (1) new text end the full face value of any
stamps which may be required by any cigarette tax act of this
state, unless included by the manufacturer in the list price new text begin and
(2) the greater of the amount of the published fee under section
62J.27, subdivision 6, or the actual per cigarette fee paid by
the wholesaler for the fiscal year new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective September 1,
2005.
new text end

Sec. 16. new text begin HEALTH CARE COST CONTAINMENT DEDICATED ACCOUNT.
new text end

new text begin Revenues collected from the health care cost containment
fee in Minnesota Statutes, section 62J.27 shall be placed in a
dedicated account to be used for the health care initiatives in
this act.
new text end

Sec. 17. new text begin INSTRUCTION TO THE COMMISSIONER OF HUMAN
SERVICES.
new text end

new text begin (a) The commissioner of human services shall reduce
professional contracting expenditures by $10,000,000 to achieve
a $10,000,000 reduction in general fund expenditures.
new text end

new text begin (b) The commissioner of human services shall reduce general
fund expenditures and health care access fund expenditures on
managed care delivery of health care services by $40,000,000
during the 2006-2007 biennium utilizing greater efficiencies and
leveraged buying power.
new text end

Sec. 18. new text begin FUNDS TRANSFER.
new text end

new text begin On July 1, 2006, the commissioner of finance shall transfer
$20,000,000 from the health care access fund to the general
fund. On July 1, 2008, the commissioner of finance shall
transfer, without interest, $20,000,000 from the general fund to
the health care access fund.
new text end

Sec. 19. new text begin APPROPRIATION; PRESCRIPTION DRUG DISCOUNT
PROGRAM.
new text end

new text begin $....... is appropriated from the general fund to the
Minnesota prescription drug dedicated fund for fiscal year 2006.
new text end

Sec. 20. new text begin APPROPRIATION FOR MA SPENDDOWN.
new text end

new text begin $9,000,000 is appropriated from the general fund to the
commissioner of human services for the 2006-2007 biennium to be
used to increase the MA spenddown for aged, blind, and disabled
persons under Minnesota Statutes, section 256B.056, subdivision
5c, paragraph (b). The commissioner shall increase the
spenddown as high as possible within this appropriation.
new text end

Sec. 21. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, section 256L.035, is repealed.
new text end

ARTICLE 2

OPTION TO PURCHASE STATE HEALTH COVERAGE

Section 1.

Minnesota Statutes 2004, section 43A.27,
subdivision 2, is amended to read:

Subd. 2.

Elective eligibility.

The following persons, if
not otherwise covered by section 43A.24, may elect coverage for
themselves or their dependents at their own expense:

(a) a state employee, including persons on layoff from a
civil service position as provided in collective bargaining
agreements or a plan established pursuant to section 43A.18;

(b) an employee of the Board of Regents of the University
of Minnesota, including persons on layoff, as provided in
collective bargaining agreements or by the Board of Regents;

(c) an officer or employee of the State Agricultural
Society, State Horticultural Society, Sibley House Association,
Minnesota Humanities Commission, Minnesota Area Industry Labor
Management Councils, Minnesota International Center, Minnesota
Academy of Science, Science Museum of Minnesota, Minnesota
Safety Council, state Office of Disabled American Veterans,
state Office of the American Legion and its auxiliary, state
Office of Veterans of Foreign Wars and its auxiliary, or state
Office of the Military Order of the Purple Heart;

(d) a civilian employee of the adjutant general who is paid
from federal funds and who is not eligible for benefits from any
federal civilian employee group life insurance or health
benefits program; deleted text begin and
deleted text end

(e) an officer or employee of the State Capitol Credit
Union or the Highway Credit Union new text begin ; and
new text end

new text begin (f) a resident of the state of Minnesota who meets the
residency requirements provided by Code of Federal Regulations,
title 42, section 435.403, and who has not been medically
treated within three years of application for one or more of the
presumptive conditions sufficient for enrollment in the
Minnesota Comprehensive Health Association, as listed in the
operating rule adopted by the association under the authority of
Minnesota Rules, parts 2740.2700, subpart 4, and 2740.3600,
subpart 2, item B, except that persons electing coverage under
this clause are eligible only for hospital, medical, and dental
benefits new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 2.

Minnesota Statutes 2004, section 43A.27, is
amended by adding a subdivision to read:

new text begin Subd. 7. new text end

new text begin Small employer. new text end

new text begin (a) A small employer may elect
to purchase hospital, medical, and dental coverage for its
employees and dependents if:
new text end

new text begin (1) the employer and employee elect to enroll at their own
expense, in the manner and under the conditions of eligibility
the commissioner prescribes and otherwise approves;
new text end

new text begin (2) the small employer has at least 75 percent of its
eligible employees who have not waived coverage participating
and contributes at least 50 percent towards the cost of coverage
of each eligible employee; and
new text end

new text begin (3) the small employer is located in Minnesota.
new text end

new text begin (b) For purposes of this subdivision, "small employer" has
the meaning given in section 62L.02, subdivision 26.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 3.

new text begin [43A.275] COORDINATION WITH PRIVATE INSURANCE
POLICIES.
new text end

new text begin Subdivision 1. new text end

new text begin State administered coverage
secondary. new text end

new text begin Plans of hospital, medical, and dental coverage
provided to persons eligible under section 43A.27, subdivision
2, clause (f); or 7, are secondary to any available private
sector health coverage.
new text end

new text begin Subd. 2. new text end

new text begin Subrogation. new text end

new text begin (a) Upon providing hospital,
medical, or dental benefits to any person eligible under section
43A.27, subdivision 2, clause (f); or 7, who has private
hospital, medical, or dental coverage, or receives or has a
right to receive hospital, medical, or dental care from any type
of organization or entity, or has a cause of action arising out
of an occurrence that necessitated the provision of hospital,
medical, or dental benefits, the state agency or the state
agency's agent shall be subrogated, to the extent of the cost of
hospital, medical, or dental care provided, to any rights the
person may have under the terms of the coverage, or against the
organization or entity providing or liable to provide hospital,
medical, or dental care, or under the cause of action.
new text end

new text begin (b) The right of subrogation created in this subdivision
includes all portions of the cause of action, notwithstanding
any settlement allocation or apportionment that purports to
dispose of portions of the cause of action not subject to
subrogation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 4.

Minnesota Statutes 2004, section 256L.02, is
amended by adding a subdivision to read:

new text begin Subd. 5. new text end

new text begin Minnesotacare coverage as secondary.
new text end

new text begin MinnesotaCare coverage for persons eligible under section
256L.04, subdivisions 14, 15, and 16, is secondary to any
available private sector health coverage.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 5.

Minnesota Statutes 2004, section 256L.04,
subdivision 1, is amended to read:

Subdivision 1.

Families with children.

(a) Families with
children with family income equal to or less than 275 percent of
the federal poverty guidelines for the applicable family size
shall be eligible for MinnesotaCare according to this section.
All other provisions of sections 256L.01 to 256L.18, including
the insurance-related barriers to enrollment under section
256L.07, shall apply unless otherwise specified.

(b) Parents who enroll in the MinnesotaCare program must
also enroll their children, if the children are eligible.
Children may be enrolled separately without enrollment by
parents. However, if one parent in the household enrolls, both
parents must enroll, unless other insurance is available. If
one child from a family is enrolled, all children must be
enrolled, unless other insurance is available. If one spouse in
a household enrolls, the other spouse in the household must also
enroll, unless other insurance is available. Families cannot
choose to enroll only certain uninsured members.

(c) Beginning October 1, 2003, the dependent sibling
definition no longer applies to the MinnesotaCare program.
These persons are no longer counted in the parental household
and may apply as a separate household.

(d) Beginning July 1, 2003, or upon federal approval,
whichever is later, parents are not eligible for MinnesotaCare
if their gross income exceeds $50,000. new text begin Parents eligible under
subdivision 14 are not subject to this paragraph.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 6.

Minnesota Statutes 2004, section 256L.04,
subdivision 7a, is amended to read:

Subd. 7a.

Ineligibility.

Applicants whose income is
greater than the limits established under this section may not
enroll in the MinnesotaCare program new text begin , except as provided in
subdivisions 14, 15, and 16 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 7.

Minnesota Statutes 2004, section 256L.04, is
amended by adding a subdivision to read:

new text begin Subd. 14. new text end

new text begin Other families with children. new text end

new text begin Families with
children with family incomes greater than 275 percent of the
federal poverty guidelines for the applicable family size, or
who are not otherwise eligible under subdivision 1, are eligible
for MinnesotaCare coverage under, and subject to all other
requirements of, section 256L.03 as if they were eligible under
subdivision 1, if they pay the full-cost premium. A family
member who has been medically treated within three years of
application for one or more of the presumptive conditions
sufficient for enrollment in the Minnesota Comprehensive Health
Association, as listed in the operating rule adopted by the
association under the authority of Minnesota Rules, parts
2740.2700, subpart 4, and 2740.3600, subpart 2, item B, is not
eligible under this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 8.

Minnesota Statutes 2004, section 256L.04, is
amended by adding a subdivision to read:

new text begin Subd. 15. new text end

new text begin Other single adults and households with no
children. new text end

new text begin (a) Single adults and households with no children
with household incomes greater than 175 percent of the federal
poverty guidelines for the applicable household size, or who are
not otherwise eligible under subdivision 7, are eligible for
MinnesotaCare coverage under, and subject to all other
requirements of, section 256L.03 as if they were eligible under
subdivision 7, if they pay the full-cost premium.
new text end

new text begin (b) Single adults and households with no children with
household incomes greater than 75 percent of the federal poverty
guidelines for the applicable household size who are eligible
for limited benefit coverage under section 256L.035 may elect
coverage under paragraph (a), but must pay the full-cost premium.
new text end

new text begin (c) An individual who has been medically treated within
three years of application for one or more of the presumptive
conditions sufficient for enrollment in the Minnesota
Comprehensive Health Association, as listed in the operating
rule adopted by the association under the authority of Minnesota
Rules, parts 2740.2700, subpart 4, and 2740.3600, subpart 2,
item B, is not eligible under this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 9.

Minnesota Statutes 2004, section 256L.04, is
amended by adding a subdivision to read:

new text begin Subd. 16. new text end

new text begin Employees and dependents of small
employers. new text end

new text begin (a) Employees and dependents of small employers are
eligible for MinnesotaCare coverage under, and subject to all
other requirements of, section 256L.03 as if they were eligible
under subdivisions 1 or 7, whichever is applicable, if:
new text end

new text begin (1) the small employer and employee pay the full-cost
premium;
new text end

new text begin (2) the small employer has at least 75 percent of its
eligible employees who have not waived coverage participating
and contributes at least 50 percent towards the cost of coverage
of each eligible employee; and
new text end

new text begin (3) the small employer is located in Minnesota.
new text end

new text begin (b) For purposes of this subdivision, "small employer" has
the meaning given in section 62L.02, subdivision 26.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 10.

Minnesota Statutes 2004, section 256L.05,
subdivision 1, is amended to read:

Subdivision 1.

Application and information
availability.

new text begin (a) new text end Applications and other information must be
made available to provider offices, local human services
agencies, school districts, public and private elementary
schools in which 25 percent or more of the students receive free
or reduced price lunches, community health offices, and Women,
Infants and Children (WIC) program sites. These sites may
accept applications and forward the forms to the commissioner.
Otherwise, applicants may apply directly to the commissioner.
Beginning January 1, 2000, MinnesotaCare enrollment sites will
be expanded to include local county human services agencies
which choose to participate.

new text begin (b) The commissioner shall make applications and other
information available to small employers and organizations
representing small employers, and shall work with these entities
to publicize the availability of small employer coverage under
section 256L.04, subdivision 16.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 11.

Minnesota Statutes 2004, section 256L.05,
subdivision 3a, is amended to read:

Subd. 3a.

Renewal of eligibility.

(a) Beginning January
1, 1999, an enrollee's eligibility must be renewed every 12
months. The 12-month period begins in the month after the month
the application is approved.

(b) Beginning October 1, 2004, an enrollee's eligibility
must be renewed every six months new text begin , except that enrollees eligible
under section 256L.04, subdivisions 14, 15, and 16, must renew
eligibility every 12 months new text end . The first six-month period of
eligibility begins in the month after the month the application
is approved. Each new period of eligibility must take into
account any changes in circumstances that impact eligibility and
premium amount. An enrollee must provide all the information
needed to redetermine eligibility by the first day of the month
that ends the eligibility period. The premium for the new
period of eligibility must be received as provided in section
256L.06 in order for eligibility to continue.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 12.

Minnesota Statutes 2004, section 256L.07, as
amended by Laws 2005, chapter 59, section 1, is amended to read:

256L.07 [ELIGIBILITY FOR MINNESOTACARE.]

Subdivision 1.

General requirements.

(a) Children
enrolled in the original children's health plan as of September
30, 1992, children who enrolled in the MinnesotaCare program
after September 30, 1992, pursuant to Laws 1992, chapter 549,
article 4, section 17, and children who have family gross
incomes that are equal to or less than 150 percent of the
federal poverty guidelines are eligible without meeting the
requirements of subdivision 2 and the four-month requirement in
subdivision 3, as long as they maintain continuous coverage in
the MinnesotaCare program or medical assistance. Children who
apply for MinnesotaCare on or after the implementation date of
the employer-subsidized health coverage program as described in
Laws 1998, chapter 407, article 5, section 45, who have family
gross incomes that are equal to or less than 150 percent of the
federal poverty guidelines, must meet the requirements of
subdivision 2 to be eligible for MinnesotaCare.

(b) Families enrolled in MinnesotaCare under section
256L.04, subdivision 1, whose income increases above 275 percent
of the federal poverty guidelines, are no longer eligible for
the program and shall be disenrolled by the commissioner.
Individuals enrolled in MinnesotaCare under section 256L.04,
subdivision 7, whose income increases above 175 percent of the
federal poverty guidelines are no longer eligible for the
program and shall be disenrolled by the commissioner. For
persons disenrolled under this subdivision, MinnesotaCare
coverage terminates the last day of the calendar month following
the month in which the commissioner determines that the income
of a family or individual exceeds program income limits.

(c)(1) Notwithstanding paragraph (b), families enrolled in
MinnesotaCare under section 256L.04, subdivision 1, may remain
enrolled in MinnesotaCare if ten percent of their annual income
is less than the annual premium for a policy with a $500
deductible available through the Minnesota Comprehensive Health
Association. Families who are no longer eligible for
MinnesotaCare under this subdivision shall be given an 18-month
notice period from the date that ineligibility is determined
before disenrollment. This clause expires February 1, 2004.

(2) Effective February 1, 2004, notwithstanding paragraph
(b), children may remain enrolled in MinnesotaCare if ten
percent of their annual family income is less than the annual
premium for a policy with a $500 deductible available through
the Minnesota Comprehensive Health Association. Children who
are no longer eligible for MinnesotaCare under this clause shall
be given a 12-month notice period from the date that
ineligibility is determined before disenrollment. The premium
for children remaining eligible under this clause shall be the
maximum premium determined under section 256L.15, subdivision 2,
paragraph (b).

(d) Effective July 1, 2003, notwithstanding paragraphs (b)
and (c), parents new text begin eligible under section 256L.04, subdivision 1,
new text end are no longer eligible for MinnesotaCare if gross household
income exceeds $50,000.

Subd. 2.

Must not have access to employer-subsidized
coverage.

(a) To be eligible, a family or individual must not
have access to subsidized health coverage through an employer
and must not have had access to employer-subsidized coverage
through a current employer for 18 months prior to application or
reapplication. A family or individual whose employer-subsidized
coverage is lost due to an employer terminating health care
coverage as an employee benefit during the previous 18 months is
not eligible.

(b) This subdivision does not apply to a family or
individual who was enrolled in MinnesotaCare within six months
or less of reapplication and who no longer has
employer-subsidized coverage due to the employer terminating
health care coverage as an employee benefit. new text begin This subdivision
does not apply to persons eligible under section 256L.04,
subdivisions 14, 15, and 16.
new text end

(c) For purposes of this requirement, subsidized health
coverage means health coverage for which the employer pays at
least 50 percent of the cost of coverage for the employee or
dependent, or a higher percentage as specified by the
commissioner. Children are eligible for employer-subsidized
coverage through either parent, including the noncustodial
parent. The commissioner must treat employer contributions to
Internal Revenue Code Section 125 plans and any other employer
benefits intended to pay health care costs as qualified employer
subsidies toward the cost of health coverage for employees for
purposes of this subdivision.

Subd. 3.

Other health coverage.

(a) Families and
individuals enrolled in the MinnesotaCare program must have no
health coverage while enrolled or for at least four months prior
to application and renewal. Children enrolled in the original
children's health plan and children in families with income
equal to or less than 150 percent of the federal poverty
guidelines, who have other health insurance, are eligible if the
coverage:

(1) lacks two or more of the following:

(i) basic hospital insurance;

(ii) medical-surgical insurance;

(iii) prescription drug coverage;

(iv) dental coverage; or

(v) vision coverage;

(2) requires a deductible of $100 or more per person per
year; or

(3) lacks coverage because the child has exceeded the
maximum coverage for a particular diagnosis or the policy
excludes a particular diagnosis.

The commissioner may change this eligibility criterion for
sliding scale premiums in order to remain within the limits of
available appropriations. The requirement of no health coverage
does not apply to newborns.

(b) Medical assistance, general assistance medical care,
and the Civilian Health and Medical Program of the Uniformed
Service, CHAMPUS, or other coverage provided under United States
Code, title 10, subtitle A, part II, chapter 55, are not
considered insurance or health coverage for purposes of the
four-month requirement described in this subdivision.

(c) For purposes of this subdivision, Medicare Part A or B
coverage under title XVIII of the Social Security Act, United
States Code, title 42, sections 1395c to 1395w-4, is considered
health coverage. An applicant or enrollee may not refuse
Medicare coverage to establish eligibility for MinnesotaCare.

(d) Applicants who were recipients of medical assistance or
general assistance medical care within one month of application
must meet the provisions of this subdivision and subdivision 2.

(e) Effective October 1, 2003, applicants who were
recipients of medical assistance and had cost-effective health
insurance which was paid for by medical assistance are exempt
from the four-month requirement under this section.

new text begin (f) This subdivision does not apply to persons eligible
under section 256L.04, subdivisions 14, 15, and 16.
new text end

Subd. 4.

Families with children in need of chemical
dependency treatment.

Premiums for families with children when
a parent has been determined to be in need of chemical
dependency treatment pursuant to an assessment conducted by the
county under section 626.556, subdivision 10, or a case plan
under section 260C.201, subdivision 6, or 260C.212, who are
eligible for MinnesotaCare under section 256L.04, subdivision 1,
may be paid by the county of residence of the person in need of
treatment for one year from the date the family is determined to
be eligible or if the family is currently enrolled in
MinnesotaCare from the date the person is determined to be in
need of chemical dependency treatment. Upon renewal, the family
is responsible for any premiums owed under section 256L.15. If
the family is not currently enrolled in MinnesotaCare, the local
county human services agency shall determine whether the family
appears to meet the eligibility requirements and shall assist
the family in applying for the MinnesotaCare program.

Subd. 5.

Voluntary disenrollment for members of
military.

Notwithstanding section 256L.05, subdivision 3b,
MinnesotaCare enrollees who are members of the military and
their families, who choose to voluntarily disenroll from the
program when one or more family members are called to active
duty, may reenroll during or following that member's tour of
active duty. Those individuals and families shall be considered
to have good cause for voluntary termination under section
256L.06, subdivision 3, paragraph (d). Income and asset
increases reported at the time of reenrollment shall be
disregarded. All provisions of sections 256L.01 to 256L.18
shall apply to individuals and families enrolled under this
subdivision upon six-month renewal.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 13.

Minnesota Statutes 2004, section 256L.09, is
amended by adding a subdivision to read:

new text begin Subd. 8. new text end

new text begin Exemption from residency requirement for
employees of small employers. new text end

new text begin Persons eligible under section
256L.04, subdivision 16, are exempt from this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 14.

Minnesota Statutes 2004, section 256L.15,
subdivision 3, is amended to read:

Subd. 3.

Exceptions to sliding scale.

An annual premium
of $48 is required for all children in families new text begin eligible under
section 256L.04, subdivision 1, new text end with income at or less than 150
percent of federal poverty guidelines.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 15.

Minnesota Statutes 2004, section 256L.15, is
amended by adding a subdivision to read:

new text begin Subd. 4. new text end

new text begin Payment of full-cost premium; administrative
costs. new text end

new text begin (a) Enrollees eligible under section 256L.04,
subdivisions 14, 15, and 16, shall pay the full-cost premium.
The full-cost premium for families and children is defined as
the projected medical payments for all enrollees eligible under
section 256L.04, subdivisions 1 and 14, and all enrollees who
are families and children eligible under section 256L.04,
subdivision 16, divided by the projected monthly average
households enrolled for these groups. The full-cost premium for
single adults and households without children is defined as the
projected medical payments for all enrollees eligible under
section 256L.04, subdivision 7, receiving covered services under
section 256L.03; all enrollees eligible under section 256L.04,
subdivision 15; and all enrollees who are single adults or
households without children eligible under section 256L.04,
subdivision 16, divided by the projected monthly average
households enrolled for these groups.
new text end

new text begin (b) The commissioner may increase the full-cost premium
calculated under paragraph (a) to cover any administrative costs
incurred by the Department of Human Services in expanding
MinnesotaCare eligibility to include persons eligible under
section 256L.04, subdivisions 14, 15, and 16.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

Sec. 16.

Minnesota Statutes 2004, section 256L.17,
subdivision 5, is amended to read:

Subd. 5.

Exemption.

This section does not apply to
pregnant women. For purposes of this subdivision, a woman is
considered pregnant for 60 days postpartum. new text begin This section does
not apply to persons eligible under section 256L.04,
subdivisions 14, 15, and 16.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2006.
new text end

ARTICLE 3

MEDICAL ASSISTANCE AND ALTERNATIVE CARE

Section 1.

Minnesota Statutes 2004, section 256B.15,
subdivision 1, is amended to read:

Subdivision 1.

deleted text begin policy, applicability, purpose, and
construction; deleted text end definition.

deleted text begin (a) It is the policy of this state
that individuals or couples, either or both of whom participate
in the medical assistance program, use their own assets to pay
their share of the total cost of their care during or after
their enrollment in the program according to applicable federal
law and the laws of this state. The following provisions apply:
deleted text end

deleted text begin (1) subdivisions 1c to 1k shall not apply to claims arising
under this section which are presented under section 525.313;
deleted text end

deleted text begin (2) the provisions of subdivisions 1c to 1k expanding the
interests included in an estate for purposes of recovery under
this section give effect to the provisions of United States
Code, title 42, section 1396p, governing recoveries, but do not
give rise to any express or implied liens in favor of any other
parties not named in these provisions;
deleted text end

deleted text begin (3) the continuation of a recipient's life estate or joint
tenancy interest in real property after the recipient's death
for the purpose of recovering medical assistance under this
section modifies common law principles holding that these
interests terminate on the death of the holder;
deleted text end

deleted text begin (4) all laws, rules, and regulations governing or involved
with a recovery of medical assistance shall be liberally
construed to accomplish their intended purposes;
deleted text end

deleted text begin (5) a deceased recipient's life estate and joint tenancy
interests continued under this section shall be owned by the
remaindermen or surviving joint tenants as their interests may
appear on the date of the recipient's death. They shall not be
merged into the remainder interest or the interests of the
surviving joint tenants by reason of ownership. They shall be
subject to the provisions of this section. Any conveyance,
transfer, sale, assignment, or encumbrance by a remainderman, a
surviving joint tenant, or their heirs, successors, and assigns
shall be deemed to include all of their interest in the deceased
recipient's life estate or joint tenancy interest continued
under this section; and
deleted text end

deleted text begin (6) the provisions of subdivisions 1c to 1k continuing a
recipient's joint tenancy interests in real property after the
recipient's death do not apply to a homestead owned of record,
on the date the recipient dies, by the recipient and the
recipient's spouse as joint tenants with a right of
survivorship. Homestead means the real property occupied by the
surviving joint tenant spouse as their sole residence on the
date the recipient dies and classified and taxed to the
recipient and surviving joint tenant spouse as homestead
property for property tax purposes in the calendar year in which
the recipient dies. For purposes of this exemption, real
property the recipient and their surviving joint tenant spouse
purchase solely with the proceeds from the sale of their prior
homestead, own of record as joint tenants, and qualify as
homestead property under section 273.124 in the calendar year in
which the recipient dies and prior to the recipient's death
shall be deemed to be real property classified and taxed to the
recipient and their surviving joint tenant spouse as homestead
property in the calendar year in which the recipient dies. The
surviving spouse, or any person with personal knowledge of the
facts, may provide an affidavit describing the homestead
property affected by this clause and stating facts showing
compliance with this clause. The affidavit shall be prima facie
evidence of the facts it states.
deleted text end

deleted text begin (b) deleted text end For purposes of this section, "medical assistance"
includes the medical assistance program under this chapter and
the general assistance medical care program under chapter 256D
deleted text begin and deleted text end new text begin but does not include the new text end alternative care new text begin program new text end for
nonmedical assistance recipients under section 256B.0913.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactive
from July 1, 2003.
new text end

Sec. 2.

Minnesota Statutes 2004, section 256B.15,
subdivision 1a, is amended to read:

Subd. 1a.

Estates subject to claims.

If a person
receives any medical assistance hereunder, on the person's
death, if single, or on the death of the survivor of a married
couple, either or both of whom received medical assistance, deleted text begin or
as otherwise provided for in this section, deleted text end the total amount paid
for medical assistance rendered for the person and spouse shall
be filed as a claim against the estate of the person or the
estate of the surviving spouse in the court having jurisdiction
to probate the estate or to issue a decree of descent according
to sections 525.31 to 525.313.

A claim shall be filed if medical assistance was rendered
for either or both persons under one of the following
circumstances:

(a) the person was over 55 years of age, and received
services under this chapter new text begin , excluding alternative care new text end ;

(b) the person resided in a medical institution for six
months or longer, received services under this chapter new text begin ,
excluding alternative care new text end , and, at the time of
institutionalization or application for medical assistance,
whichever is later, the person could not have reasonably been
expected to be discharged and returned home, as certified in
writing by the person's treating physician. For purposes of
this section only, a "medical institution" means a skilled
nursing facility, intermediate care facility, intermediate care
facility for persons with mental retardation, nursing facility,
or inpatient hospital; or

(c) the person received general assistance medical care
services under chapter 256D.

The claim shall be considered an expense of the last
illness of the decedent for the purpose of section 524.3-805.
Any statute of limitations that purports to limit any county
agency or the state agency, or both, to recover for medical
assistance granted hereunder shall not apply to any claim made
hereunder for reimbursement for any medical assistance granted
hereunder. Notice of the claim shall be given to all heirs and
devisees of the decedent whose identity can be ascertained with
reasonable diligence. The notice must include procedures and
instructions for making an application for a hardship waiver
under subdivision 5; time frames for submitting an application
and determination; and information regarding appeal rights and
procedures. Counties are entitled to one-half of the nonfederal
share of medical assistance collections from estates that are
directly attributable to county effort. deleted text begin Counties are entitled
to ten percent of the collections for alternative care directly
attributable to county effort.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactive
from July 1, 2003.
new text end

Sec. 3.

Minnesota Statutes 2004, section 256B.15,
subdivision 2, is amended to read:

Subd. 2.

Limitations on claims.

The claim shall include
only the total amount of medical assistance rendered after age
55 or during a period of institutionalization described in
subdivision 1a, clause (b), and the total amount of general
assistance medical care rendered, and shall not include
interest. Claims that have been allowed but not paid shall bear
interest according to section 524.3-806, paragraph (d). A claim
against the estate of a surviving spouse who did not receive
medical assistance, for medical assistance rendered for the
predeceased spouse, is limited to the value of the assets of the
estate that were marital property or jointly owned property at
any time during the marriage. deleted text begin Claims for alternative care shall
be net of all premiums paid under section 256B.0913, subdivision
12, on or after July 1, 2003, and shall be limited to services
provided on or after July 1, 2003.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactive
from July 1, 2003.
new text end

Sec. 4.

Minnesota Statutes 2004, section 256B.15,
subdivision 3, is amended to read:

Subd. 3.

deleted text begin surviving spouse, deleted text end minor, blind, or disabled
children.

If a decedent deleted text begin is survived by a spouse, or deleted text end new text begin who new text end was
single or new text begin who was new text end the surviving spouse of a married couple deleted text begin and
deleted text end is survived by a child who is under age 21 or blind or
permanently and totally disabled according to the supplemental
security income program criteria, deleted text begin a deleted text end new text begin no new text end claim shall be filed
against the estate deleted text begin according to this section deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactive
from July 1, 2003.
new text end

Sec. 5.

Minnesota Statutes 2004, section 256B.15,
subdivision 4, is amended to read:

Subd. 4.

Other survivors.

If the decedent who was single
or the surviving spouse of a married couple is survived by one
of the following persons, a claim exists against the estate in
an amount not to exceed the value of the nonhomestead property
included in the estate deleted text begin and the personal representative shall
make, execute, and deliver to the county agency a lien against
the homestead property in the estate for any unpaid balance of
the claim to the claimant as provided under this section deleted text end :

(a) a sibling who resided in the decedent medical
assistance recipient's home at least one year before the
decedent's institutionalization and continuously since the date
of institutionalization; or

(b) a son or daughter or a grandchild who resided in the
decedent medical assistance recipient's home for at least two
years immediately before the parent's or grandparent's
institutionalization and continuously since the date of
institutionalization, and who establishes by a preponderance of
the evidence having provided care to the parent or grandparent
who received medical assistance, that the care was provided
before institutionalization, and that the care permitted the
parent or grandparent to reside at home rather than in an
institution.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactive
from July 1, 2003.
new text end

Sec. 6.

Minnesota Statutes 2004, section 514.981,
subdivision 6, is amended to read:

Subd. 6.

Time limits; claim limits deleted text begin ; liens on life estates
and joint tenancies deleted text end .

(a) A medical assistance lien is a lien on
the real property it describes for a period of ten years from
the date it attaches according to section 514.981, subdivision
2, paragraph (a), except as otherwise provided for in sections
514.980 to 514.985. The agency may renew a medical assistance
lien for an additional ten years from the date it would
otherwise expire by recording or filing a certificate of renewal
before the lien expires. The certificate shall be recorded or
filed in the office of the county recorder or registrar of
titles for the county in which the lien is recorded or filed.
The certificate must refer to the recording or filing data for
the medical assistance lien it renews. The certificate need not
be attested, certified, or acknowledged as a condition for
recording or filing. The registrar of titles or the recorder
shall file, record, index, and return the certificate of renewal
in the same manner as provided for medical assistance liens in
section 514.982, subdivision 2.

(b) A medical assistance lien is not enforceable against
the real property of an estate to the extent there is a
determination by a court of competent jurisdiction, or by an
officer of the court designated for that purpose, that there are
insufficient assets in the estate to satisfy the agency's
medical assistance lien in whole or in part because of the
homestead exemption under section 256B.15, subdivision 4, the
rights of the surviving spouse or minor children under section
524.2-403, paragraphs (a) and (b), or claims with a priority
under section 524.3-805, paragraph (a), clauses (1) to (4). For
purposes of this section, the rights of the decedent's adult
children to exempt property under section 524.2-403, paragraph
(b), shall not be considered costs of administration under
section 524.3-805, paragraph (a), clause (1).

deleted text begin (c) Notwithstanding any law or rule to the contrary, the
provisions in clauses (1) to (7) apply if a life estate subject
to a medical assistance lien ends according to its terms, or if
a medical assistance recipient who owns a life estate or any
interest in real property as a joint tenant that is subject to a
medical assistance lien dies.
deleted text end

deleted text begin (1) The medical assistance recipient's life estate or joint
tenancy interest in the real property shall not end upon the
recipient's death but shall merge into the remainder interest or
other interest in real property the medical assistance recipient
owned in joint tenancy with others. The medical assistance lien
shall attach to and run with the remainder or other interest in
the real property to the extent of the medical assistance
recipient's interest in the property at the time of the
recipient's death as determined under this section.
deleted text end

deleted text begin (2) If the medical assistance recipient's interest was a
life estate in real property, the lien shall be a lien against
the portion of the remainder equal to the percentage factor for
the life estate of a person the medical assistance recipient's
age on the date the life estate ended according to its terms or
the date of the medical assistance recipient's death as listed
in the Life Estate Mortality Table in the health care program's
manual.
deleted text end

deleted text begin (3) If the medical assistance recipient owned the interest
in real property in joint tenancy with others, the lien shall be
a lien against the portion of that interest equal to the
fractional interest the medical assistance recipient would have
owned in the jointly owned interest had the medical assistance
recipient and the other owners held title to that interest as
tenants in common on the date the medical assistance recipient
died.
deleted text end

deleted text begin (4) The medical assistance lien shall remain a lien against
the remainder or other jointly owned interest for the length of
time and be renewable as provided in paragraph (a).
deleted text end

deleted text begin (5) Subdivision 5, paragraph (a), clause (4), paragraph
(b), clauses (1) and (2); and subdivision 6, paragraph (b), do
not apply to medical assistance liens which attach to interests
in real property as provided under this subdivision.
deleted text end

deleted text begin (6) The continuation of a medical assistance recipient's
life estate or joint tenancy interest in real property after the
medical assistance recipient's death for the purpose of
recovering medical assistance provided for in sections 514.980
to 514.985 modifies common law principles holding that these
interests terminate on the death of the holder.
deleted text end

deleted text begin (7) Notwithstanding any law or rule to the contrary, no
release, satisfaction, discharge, or affidavit under section
256B.15 shall extinguish or terminate the life estate or joint
tenancy interest of a medical assistance recipient subject to a
lien under sections 514.980 to 514.985 on the date the recipient
dies.
deleted text end

deleted text begin (8) The provisions of clauses (1) to (7) do not apply to a
homestead owned of record, on the date the recipient dies, by
the recipient and the recipient's spouse as joint tenants with a
right of survivorship. Homestead means the real property
occupied by the surviving joint tenant spouse as their sole
residence on the date the recipient dies and classified and
taxed to the recipient and surviving joint tenant spouse as
homestead property for property tax purposes in the calendar
year in which the recipient dies. For purposes of this
exemption, real property the recipient and their surviving joint
tenant spouse purchase solely with the proceeds from the sale of
their prior homestead, own of record as joint tenants, and
qualify as homestead property under section 273.124 in the
calendar year in which the recipient dies and prior to the
recipient's death shall be deemed to be real property classified
and taxed to the recipient and their surviving joint tenant
spouse as homestead property in the calendar year in which the
recipient dies. The surviving spouse, or any person with
personal knowledge of the facts, may provide an affidavit
describing the homestead property affected by this clause and
stating facts showing compliance with this clause. The
affidavit shall be prima facie evidence of the facts it states.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactive
from July 1, 2003, and applies to medical assistance liens
recorded or filed on or after that date. new text end

Sec. 7.

Minnesota Statutes 2004, section 524.3-805, is
amended to read:

524.3-805 CLASSIFICATION OF CLAIMS.

(a) If the applicable assets of the estate are insufficient
to pay all claims in full, the personal representative shall
make payment in the following order:

(1) costs and expenses of administration;

(2) reasonable funeral expenses;

(3) debts and taxes with preference under federal law;

(4) reasonable and necessary medical, hospital, or nursing
home expenses of the last illness of the decedent, including
compensation of persons attending the decedent deleted text begin , a claim filed
under section 256B.15 for recovery of expenditures for
alternative care for nonmedical assistance recipients under
section 256B.0913, deleted text end and including a claim filed pursuant to
section 256B.15;

(5) reasonable and necessary medical, hospital, and nursing
home expenses for the care of the decedent during the year
immediately preceding death;

(6) debts with preference under other laws of this state,
and state taxes;

(7) all other claims.

(b) No preference shall be given in the payment of any
claim over any other claim of the same class, and a claim due
and payable shall not be entitled to a preference over claims
not due, except that if claims for expenses of the last illness
involve only claims filed under section deleted text begin 256B.15 for recovery of
expenditures for alternative care for nonmedical assistance
recipients under section 256B.0913, section deleted text end 246.53 for costs of
state hospital care and claims filed under section 256B.15 deleted text begin ,
claims filed to recover expenditures for alternative care for
nonmedical assistance recipients under section 256B.0913 shall
have preference over claims filed under both sections 246.53 and
other claims filed under section 256B.15, and deleted text end new text begin . new text end Claims filed
under section 246.53 have preference over claims filed under
section 256B.15 deleted text begin for recovery of amounts other than those for
expenditures for alternative care for nonmedical assistance
recipients under section 256B.0913 deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactive
from July 1, 2003.
new text end

Sec. 8. new text begin APPROPRIATION.
new text end

new text begin $....... is appropriated from the general fund to the
commissioner of human services for the fiscal year beginning
July 1, 2005, for the purposes of sections 1 to 7 and 9.
new text end

Sec. 9. new text begin REPEALER.
new text end

new text begin (a) Minnesota Statutes 2004, section 256B.15, subdivisions
1c, 1d, 1e, 1f, 1g, 1h, 1i, 1j, and 1k, are repealed
retroactively from July 1, 2003.
new text end

new text begin (b) Minnesota Statutes 2004, sections 514.991; 514.992;
514.993; 514.994; and 514.995, are repealed retroactively from
July 1, 2003.
new text end