1.1 	A bill for an act
1.2 	relating to health; making changes in MinnesotaCare
1.3 	eligibility determination procedures and in program
1.4 	eligibility criteria; establishing a MinnesotaCare
1.5 	premium surcharge and enrollee accounts; amending
1.6 	Minnesota Statutes 2004, sections 256L.01,
1.7 	subdivisions 1a, 5; 256L.05, subdivision 2; 256L.06,
1.8 	subdivision 3; 256L.15, subdivision 2, by adding a
1.9 	subdivision; 256L.17, subdivision 3.
1.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11 	Section 1. Minnesota Statutes 2004, section 256L.01,
1.12 	subdivision 1a, is amended to read:
1.13 		Subd. 1a.Child.  "Child" means an individual under 21
1.14 	years of age who is either not enrolled or is enrolled less than
1.15 	half time in a program of study at a postsecondary education
1.16 	institution, including the unborn child of a pregnant woman, an
1.17 	emancipated minor, and an emancipated minor's spouse. For an
1.18 	individual enrolled more than half time in a program of study at
1.19 	a postsecondary education institution, child means an individual
1.20 	under 18 years of age, including an emancipated minor, and an
1.21 	emancipated minor's spouse.
1.22 	
EFFECTIVE DATE. This section is effective July 1, 2005,
1.23 	or upon federal approval, whichever is later.

1.24 	Sec. 2. Minnesota Statutes 2004, section 256L.01,
1.25 	subdivision 5, is amended to read:
1.26 		Subd. 5.Income.  "Income" has the meaning given for
1.27 	earned and unearned income for families and children in the
2.1 	medical assistance program, according to the state's aid to
2.2 	families with dependent children plan in effect as of July 16,
2.3 	1996.  The definition does not include medical assistance income
2.4 	methodologies and deeming requirements.  The earned income of
2.5 	full-time and part-time students under age 19 is not counted as
2.6 	income, unless the student is age 18 or older and enrolled on a
2.7 	half time or greater basis in a program of study at a
2.8 	postsecondary education institution.  Household and family
2.9 	income includes the earned and unearned income of all persons
2.10 	residing in the household or family, including unrelated
2.11 	persons.  Public assistance payments and supplemental security
2.12 	income are not excluded income.
2.13 	
EFFECTIVE DATE. This section is effective July 1, 2005,
2.14 	except that the provision is effective July 1, 2005, or upon
2.15 	federal approval, whichever is later, for MinnesotaCare
2.16 	enrollees for whom a federal match is received.

2.17 	Sec. 3. Minnesota Statutes 2004, section 256L.05,
2.18 	subdivision 2, is amended to read:
2.19 		Subd. 2.Commissioner's duties. (a) The commissioner or
2.20 	county agency shall use electronic verification as the primary
2.21 	method of income verification.  If there is a discrepancy
2.22 	between reported income and electronically verified income, an
2.23 	individual may be required to submit additional verification.
2.24 	In addition, the commissioner shall perform random audits to
2.25 	verify reported income and eligibility.  The commissioner may
2.26 	execute data sharing arrangements with the Department of Revenue
2.27 	and any other governmental agency in order to perform income
2.28 	verification related to eligibility and premium payment under
2.29 	the MinnesotaCare program.
2.30 	(b) In determining eligibility for MinnesotaCare, the
2.31 	commissioner shall require applicants and enrollees seeking
2.32 	renewal of eligibility to verify both earned and unearned
2.33 	income.  The commissioner shall also require applicants and
2.34 	enrollees to submit to their employers, if employed, a form to
2.35 	verify whether the applicant or enrollee, and any dependents,
2.36 	are eligible for employer subsidized coverage.

3.1 	Sec. 4. Minnesota Statutes 2004, section 256L.06,
3.2 	subdivision 3, is amended to read:
3.3 		Subd. 3.Commissioner's duties and payment.  (a) Premiums
3.4 	are dedicated to the commissioner for MinnesotaCare.
3.5 	(b) The commissioner shall develop and implement procedures
3.6 	to:  (1) require enrollees to report changes in income; (2)
3.7 	adjust sliding scale premium payments, based upon changes both
3.8 	increases and decreases in enrollee income, at the time the
3.9 	change in income is reported; and (3) disenroll enrollees from
3.10 	MinnesotaCare for failure to pay required premiums.  Failure to
3.11 	pay includes payment with a dishonored check, a returned
3.12 	automatic bank withdrawal, or a refused credit card or debit
3.13 	card payment.  The commissioner may demand a guaranteed form of
3.14 	payment, including a cashier's check or a money order, as the
3.15 	only means to replace a dishonored, returned, or refused payment.
3.16 	(c) Premiums are calculated on a calendar month basis and
3.17 	may be paid on a monthly, quarterly, or semiannual basis, with
3.18 	the first payment due upon notice from the commissioner of the
3.19 	premium amount required.  The commissioner shall inform
3.20 	applicants and enrollees of these premium payment options.
3.21 	Premium payment is required before enrollment is complete and to
3.22 	maintain eligibility in MinnesotaCare.  Premium payments
3.23 	received before noon are credited the same day.  Premium
3.24 	payments received after noon are credited on the next working
3.25 	day.
3.26 	(d) Nonpayment of the premium will result in disenrollment
3.27 	from the plan effective for the calendar month for which the
3.28 	premium was due.  Persons disenrolled for nonpayment or who
3.29 	voluntarily terminate coverage from the program may not reenroll
3.30 	until four calendar months have elapsed.  Persons disenrolled
3.31 	for nonpayment who pay all past due premiums as well as current
3.32 	premiums due, including premiums due for the period of
3.33 	disenrollment, within 20 days of disenrollment, shall be
3.34 	reenrolled retroactively to the first day of disenrollment.
3.35 	Persons disenrolled for nonpayment or who voluntarily terminate
3.36 	coverage from the program may not reenroll for four calendar
4.1 	months unless the person demonstrates good cause for
4.2 	nonpayment.  Good cause does not exist if a person chooses to
4.3 	pay other family expenses instead of the premium.  The
4.4 	commissioner shall define good cause in rule.

4.5 	Sec. 5. Minnesota Statutes 2004, section 256L.15,
4.6 	subdivision 2, is amended to read:
4.7 		Subd. 2.Sliding fee scale to determine percentage of
4.8 	gross individual or family income.  (a) The commissioner shall
4.9 	establish a sliding fee scale to determine the percentage of
4.10 	gross individual or family income that households at different
4.11 	income levels must pay to obtain coverage through the
4.12 	MinnesotaCare program.  The sliding fee scale must be based on
4.13 	the enrollee's gross individual or family income.  The sliding
4.14 	fee scale must contain separate tables based on enrollment of
4.15 	one, two, or three or more persons.  The sliding fee scale
4.16 	begins with a premium of 1.5 percent of gross individual or
4.17 	family income for individuals or families with incomes below the
4.18 	limits for the medical assistance program for families and
4.19 	children in effect on January 1, 1999, and proceeds through the
4.20 	following evenly spaced steps:  1.8, 2.3, 3.1, 3.8, 4.8, 5.9,
4.21 	7.4, and 8.8 percent.  These percentages are matched to evenly
4.22 	spaced income steps ranging from the medical assistance income
4.23 	limit for families and children in effect on January 1, 1999, to
4.24 	275 percent of the federal poverty guidelines for the applicable
4.25 	family size, up to a family size of five.  The sliding fee scale
4.26 	for a family of five must be used for families of more than
4.27 	five.  Effective October 1, 2003, the commissioner shall
4.28 	increase each percentage by 0.5 percentage points for enrollees
4.29 	with income greater than 100 percent but not exceeding 200
4.30 	percent of the federal poverty guidelines and shall increase
4.31 	each percentage by 1.0 percentage points for families and
4.32 	children with incomes greater than 200 percent of the federal
4.33 	poverty guidelines.  The sliding fee scale and percentages are
4.34 	not subject to the provisions of chapter 14.  If a family or
4.35 	individual reports increased income after enrollment, premiums
4.36 	shall not be adjusted until eligibility renewal at the time the
5.1 	change in income is reported.
5.2 	(b)(1) Enrolled families whose gross annual income
5.3 	increases above 275 percent of the federal poverty guideline
5.4 	shall pay the maximum premium.  This clause expires effective
5.5 	February 1, 2004.
5.6 	(2) Effective February 1, 2004, children in families whose
5.7 	gross income is above 275 percent of the federal poverty
5.8 	guidelines shall pay the maximum premium.
5.9 	(3) The maximum premium is defined as a base charge for
5.10 	one, two, or three or more enrollees so that if all
5.11 	MinnesotaCare cases paid the maximum premium, the total revenue
5.12 	would equal the total cost of MinnesotaCare medical coverage and
5.13 	administration.  In this calculation, administrative costs shall
5.14 	be assumed to equal ten percent of the total.  The costs of
5.15 	medical coverage for pregnant women and children under age two
5.16 	and the enrollees in these groups shall be excluded from the
5.17 	total.  The maximum premium for two enrollees shall be twice the
5.18 	maximum premium for one, and the maximum premium for three or
5.19 	more enrollees shall be three times the maximum premium for one.

5.20 	Sec. 6. Minnesota Statutes 2004, section 256L.15, is
5.21 	amended by adding a subdivision to read:
5.22 		Subd. 4.Premium surcharge. (a) Effective for premiums
5.23 	due on or after July 1, 2005, the commissioner shall impose a
5.24 	two percent surcharge on premiums calculated under subdivision
5.25 	2.  The commissioner shall establish a surcharge account for
5.26 	each enrollee, and shall deposit into this account the amounts
5.27 	collected through the surcharge from that enrollee.  Amounts
5.28 	deposited in the account shall accrue interest at the rate of
5.29 	one percent.
5.30 	(b) The commissioner may use money in each enrollee's
5.31 	surcharge account to pay for any premium amounts an enrollee may
5.32 	owe due to failure to promptly report changes in income, and for
5.33 	the cost of any MinnesotaCare services provided to an enrollee
5.34 	when that enrollee was not eligible for services, but received
5.35 	services due to a failure to report required information to the
5.36 	commissioner.
6.1 	(c) The commissioner shall transfer any amounts remaining
6.2 	in the account, and accrued interest, to individuals who
6.3 	voluntarily terminate MinnesotaCare coverage, but is not
6.4 	required to transfer amounts remaining and accrued interest to
6.5 	persons who are disenrolled for nonpayment of premium.

6.6 	Sec. 7. Minnesota Statutes 2004, section 256L.17,
6.7 	subdivision 3, is amended to read:
6.8 		Subd. 3.Documentation and verification. (a) The
6.9 	commissioner of human services shall require individuals and
6.10 	families, at the time of application or renewal, to indicate on
6.11 	a checkoff form developed by the commissioner whether they
6.12 	satisfy the MinnesotaCare asset requirement.  This form must
6.13 	include the following or similar language:  "To be eligible for
6.14 	MinnesotaCare, individuals and families must not own net assets
6.15 	in excess of $30,000 for a household of two or more persons or
6.16 	$15,000 for a household of one person, not including a
6.17 	homestead, household goods and personal effects, assets owned by
6.18 	children, vehicles used for employment, court-ordered
6.19 	settlements up to $10,000, individual retirement accounts, and
6.20 	capital and operating assets of a trade or business up to
6.21 	$200,000.  Do you and your household own net assets in excess of
6.22 	these limits?" 
6.23 	(b) The commissioner may require individuals and families
6.24 	to provide any information the commissioner determines necessary
6.25 	to verify compliance with the asset requirement, if the
6.26 	commissioner determines that there is reason to believe that an
6.27 	individual or family has assets that exceed the program
6.28 	limit verify compliance with the asset requirement using the
6.29 	asset verification procedure and documentation procedures of the
6.30 	medical assistance program.

6.31 	Sec. 8. FEDERAL APPROVAL.
 6.32 	The commissioner shall seek federal approval to implement
6.33 	the amendments to Minnesota Statutes, section 256L.01,
6.34 	subdivision 1a, and to fully implement the amendments to
6.35 	Minnesota Statutes, section 256L.01, subdivision 5.