1.1 	A bill for an act
1.2 	relating to human services; establishing the healthy Minnesota contribution 
1.3 	program; requiring plan to redesign service delivery for lower-income 
1.4 	MinnesotaCare enrollees; requiring the Minnesota Comprehensive Health 
1.5 	Association to offer a high-deductible, basic plan; requiring the commissioner 
1.6 	of human services to seek federal waivers; amending Minnesota Statutes 2010, 
1.7 	sections 62E.08, subdivision 1; 62E.14, by adding a subdivision; 256B.04, 
1.8 	subdivision 18; 256L.05, by adding a subdivision; proposing coding for new law 
1.9 	in Minnesota Statutes, chapters 62E; 256L.
1.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.11 	Section 1. Minnesota Statutes 2010, section 62E.08, subdivision 1, is amended to read:
1.12 		Subdivision 1.Establishment. The association shall establish the following 
1.13 	maximum premiums to be charged for membership in the comprehensive health insurance 
1.14 	plan:
1.15 	(a) the premium for the number one qualified plan shall range from a minimum of 
1.16 	101 percent to a maximum of 125 percent of the weighted average of rates charged by 
1.17 	those insurers and health maintenance organizations with individuals enrolled in:
1.18 	(1) $1,000 annual deductible individual plans of insurance in force in Minnesota;
1.19 	(2) individual health maintenance organization contracts of coverage with a $1,000 
1.20 	annual deductible which are in force in Minnesota; and
1.21 	(3) other plans of coverage similar to plans offered by the association based on 
1.22 	generally accepted actuarial principles;
1.23 	(b) the premium for the number two qualified plan shall range from a minimum of 
1.24 	101 percent to a maximum of 125 percent of the weighted average of rates charged by 
1.25 	those insurers and health maintenance organizations with individuals enrolled in:
1.26 	(1) $500 annual deductible individual plans of insurance in force in Minnesota;
2.1 	(2) individual health maintenance organization contracts of coverage with a $500 
2.2 	annual deductible which are in force in Minnesota; and
2.3 	(3) other plans of coverage similar to plans offered by the association based on 
2.4 	generally accepted actuarial principles;
2.5 	(c) the premiums for the plans with a $2,000, $5,000, or $10,000 annual deductible 
2.6 	shall range from a minimum of 101 percent to a maximum of 125 percent of the weighted 
2.7 	average of rates charged by those insurers and health maintenance organizations with 
2.8 	individuals enrolled in:
2.9 	(1) $2,000, $5,000, or $10,000 annual deductible individual plans, respectively, in 
2.10 	force in Minnesota; and
2.11 	(2) individual health maintenance organization contracts of coverage with a $2,000, 
2.12 	$5,000, or $10,000 annual deductible, respectively, which are in force in Minnesota; or
2.13 	(3) other plans of coverage similar to plans offered by the association based on 
2.14 	generally accepted actuarial principles;
2.15 	(d) the premium for each type of Medicare supplement plan required to be offered 
2.16 	by the association pursuant to section 62E.12 shall range from a minimum of 101 percent 
2.17 	to a maximum of 125 percent of the weighted average of rates charged by those insurers 
2.18 	and health maintenance organizations with individuals enrolled in: 
2.19 	(1) Medicare supplement plans in force in Minnesota;
2.20 	(2) health maintenance organization Medicare supplement contracts of coverage 
2.21 	which are in force in Minnesota; and
2.22 	(3) other plans of coverage similar to plans offered by the association based on 
2.23 	generally accepted actuarial principles; and
2.24 	(e) the charge for health maintenance organization coverage shall be based on 
2.25 	generally accepted actuarial principles.; and
2.26 	(f) the premium for a high-deductible, basic plan offered under section 62E.121 shall 
2.27 	range from a minimum of 101 percent to a maximum of 125 percent of the weighted 
2.28 	average of rates charged by those insurers and health maintenance organizations offering 
2.29 	comparable plans outside of the Minnesota Comprehensive Health Association.
2.30 	The list of insurers and health maintenance organizations whose rates are used to 
2.31 	establish the premium for coverage offered by the association pursuant to paragraphs (a) 
2.32 	to (d) and (f) shall be established by the commissioner on the basis of information which 
2.33 	shall be provided to the association by all insurers and health maintenance organizations 
2.34 	annually at the commissioner's request. This information shall include the number of 
2.35 	individuals covered by each type of plan or contract specified in paragraphs (a) to (d) and 
2.36 	(f) that is sold, issued, and renewed by the insurers and health maintenance organizations, 
3.1 	including those plans or contracts available only on a renewal basis. The information shall 
3.2 	also include the rates charged for each type of plan or contract.
3.3 	In establishing premiums pursuant to this section, the association shall utilize 
3.4 	generally accepted actuarial principles, provided that the association shall not discriminate 
3.5 	in charging premiums based upon sex. In order to compute a weighted average for each 
3.6 	type of plan or contract specified under paragraphs (a) to (d) and (f), the association 
3.7 	shall, using the information collected pursuant to this subdivision, list insurers and health 
3.8 	maintenance organizations in rank order of the total number of individuals covered by 
3.9 	each insurer or health maintenance organization. The association shall then compute 
3.10 	a weighted average of the rates charged for coverage by all the insurers and health 
3.11 	maintenance organizations by:
3.12 	(1) multiplying the numbers of individuals covered by each insurer or health 
3.13 	maintenance organization by the rates charged for coverage;
3.14 	(2) separately summing both the number of individuals covered by all the insurers 
3.15 	and health maintenance organizations and all the products computed under clause (1); and
3.16 	(3) dividing the total of the products computed under clause (1) by the total number 
3.17 	of individuals covered.
3.18 	The association may elect to use a sample of information from the insurers and 
3.19 	health maintenance organizations for purposes of computing a weighted average. In no 
3.20 	case, however, may a sample used by the association to compute a weighted average 
3.21 	include information from fewer than the two insurers or health maintenance organizations 
3.22 	highest in rank order.

3.23 	Sec. 2. [62E.121] HIGH-DEDUCTIBLE, BASIC PLAN.
3.24 		Subdivision 1.Required offering. The Minnesota Comprehensive Health 
3.25 	Association shall offer a high-deductible, basic plan that meets the requirements specified 
3.26 	in this section. The high-deductible, basic plan is a one-person plan. Any dependents 
3.27 	must be covered separately.
3.28 		Subd. 2.Annual deductible; out-of-pocket maximum. (a) The plan shall provide 
3.29 	the following in-network annual deductible options: $3,000, $6,000, $9,000, and $12,000. 
3.30 	The in-network annual out-of-pocket maximum for each annual deductible option shall be 
3.31 	$1,000 greater than the amount of the annual deductible.
3.32 	(b) The deductible is subject to an annual increase based on the change in the 
3.33 	Consumer Price Index (CPI).
3.34 		Subd. 3.Office visits for nonpreventive care. The following co-payments shall 
3.35 	apply for each of the first three office visits per calendar year for nonpreventive care:
4.1 	(1) $30 per visit for the $3,000 annual deductible option;
4.2 	(2) $40 per visit for the $6,000 annual deductible option;
4.3 	(3) $50 per visit for the $9,000 annual deductible option; and
4.4 	(4) $60 per visit for the $12,000 annual deductible option.
4.5 	For the fourth and subsequent visits during the calendar year, 80 percent coverage is 
4.6 	provided under all deductible options, after the deductible is met.
4.7 		Subd. 4.Preventive care. One hundred percent coverage is provided for preventive 
4.8 	care, and no co-payment, coinsurance, or deductible requirements apply.
4.9 		Subd. 5.Prescription drugs. A $10 co-payment applies to preferred generic drugs. 
4.10 	Preferred brand-name drugs require an enrollee payment of 100 percent of the health 
4.11 	plan's discounted rate.
4.12 		Subd. 6.Convenience care center visits. A $20 co-payment applies for the first 
4.13 	three convenience care center visits during a calendar year. For the fourth and subsequent 
4.14 	visits during a calendar year, 80 percent coverage is provided after the deductible is met.
4.15 		Subd. 7.Urgent care center visits. A $100 co-payment applies for the first urgent 
4.16 	care center visit during a calendar year. For the second and subsequent visits during a 
4.17 	calendar year, 80 percent coverage is provided after the deductible is met.
4.18 		Subd. 8.Emergency room visits. A $200 co-payment applies for the first 
4.19 	emergency room visit during a calendar year. For the second and subsequent visits during 
4.20 	a calendar year, 80 percent coverage is provided after the deductible is met.
4.21 		Subd. 9.Lab and x-ray; hospital services; ambulance; surgery. Lab and x-ray 
4.22 	services, hospital services, ambulance services, and surgery are covered at 80 percent 
4.23 	after the deductible is met.
4.24 		Subd. 10.Eyewear. The health plan pays up to $50 per calendar year for eyewear.
4.25 		Subd. 11.Maternity. Maternity, labor and delivery, and postpartum care are not 
4.26 	covered. One hundred percent coverage is provided for prenatal care and no deductible 
4.27 	applies.
4.28 		Subd. 12.Other eligible health care services. Other eligible health care services 
4.29 	are covered at 80 percent after the deductible is met.
4.30 		Subd. 13.Option to remove mental health and substance abuse coverage.
 4.31 	Enrollees have the option of removing mental health and substance abuse coverage in 
4.32 	exchange for a reduced premium.
4.33 		Subd. 14.Option to upgrade prescription drug coverage. Enrollees have 
4.34 	the option to upgrade prescription drug coverage to include coverage for preferred 
4.35 	brand-name drugs with a $50 co-payment and coverage for nonpreferred drugs with a 
4.36 	$100 co-payment in exchange for an increased premium.
5.1 		Subd. 15.Out-of-network services. (a) The out-of-network annual deductible is 
5.2 	double the in-network annual deductible.
5.3 	(b) There is no out-of-pocket maximum for out-of-network services.
5.4 	(c) Benefits for out-of-network services are covered at 60 percent after the deductible 
5.5 	is met.
5.6 	(d) The lifetime maximum benefit for out-of-network services is $1,000,000.
5.7 		Subd. 16.Services not covered. Services not covered include: custodial care 
5.8 	or rest care; most dental services; cosmetic services; refractive eye surgery; infertility 
5.9 	services; and services that are investigational, not medically necessary, or received while 
5.10 	on military duty.

5.11 	Sec. 3. Minnesota Statutes 2010, section 62E.14, is amended by adding a subdivision 
5.12 	to read:
5.13 		Subd. 4f.Waiver of preexisting conditions for persons covered by healthy 
5.14 	Minnesota contribution program. A person may enroll in the comprehensive plan with 
5.15 	a waiver of the preexisting condition limitation in subdivision 3 if the person is eligible for 
5.16 	the healthy Minnesota contribution program, and has been denied coverage as described 
5.17 	under section 256L.031, subdivision 6.

5.18 	Sec. 4. Minnesota Statutes 2010, section 256B.04, subdivision 18, is amended to read:
5.19 		Subd. 18.Applications for medical assistance. (a) The state agency may 
5.20 	take applications for medical assistance and conduct eligibility determinations for 
5.21 	MinnesotaCare enrollees.
5.22 	(b) The commissioner of human services shall modify the Minnesota health care 
5.23 	programs application form to add a question asking applicants: "Are you a U.S. military 
5.24 	veteran?" 

5.25 	Sec. 5. [256L.031] HEALTHY MINNESOTA CONTRIBUTION PROGRAM.
5.26 		Subdivision 1.Defined contributions to enrollees. (a) Beginning January 1, 2012, 
5.27 	the commissioner shall provide each MinnesotaCare enrollee eligible under section 
5.28 	256L.04, subdivision 7, with gross family income equal to or greater than 133 percent 
5.29 	of the federal poverty guidelines, with a monthly defined contribution to purchase health 
5.30 	coverage under a health plan as defined in section 62A.011, subdivision 3. Beginning 
5.31 	January 1, 2012, or upon federal approval, whichever is later, the commissioner shall 
5.32 	provide each MinnesotaCare enrollee eligible under section 256L.04, subdivision 1, with 
5.33 	gross family income equal to or greater than 133 percent of the federal poverty guidelines, 
6.1 	with a monthly defined contribution to purchase health coverage under a health plan as 
6.2 	defined in section 62A.011, subdivision 3, offered by a health plan company as defined 
6.3 	in section 62Q.01, subdivision 4.
6.4 	(b) Enrollees eligible under paragraph (a) shall not be charged premiums under 
6.5 	section 256L.15 and are exempt from the managed care enrollment requirement of section 
6.6 	256L.12.
6.7 	(c) Sections 256L.03; 256L.05, subdivision 3; and 256L.11 do not apply to 
6.8 	enrollees eligible under paragraph (a). Covered services, cost-sharing, disenrollment 
6.9 	for nonpayment of premium, enrollee appeal rights and complaint procedures, and the 
6.10 	effective date of coverage for enrollees eligible under paragraph (a) shall be as provided 
6.11 	under the terms of the health plan purchased by the enrollee.
6.12 	(d) Unless otherwise provided in this section, all MinnesotaCare requirements 
6.13 	related to eligibility, income and asset methodology, income reporting, and program 
6.14 	administration continue to apply to enrollees obtaining coverage under this section.
6.15 		Subd. 2.Use of defined contribution. An enrollee may use up to the monthly 
6.16 	defined contribution to pay premiums for coverage under a health plan as defined in 
6.17 	section 62A.011, subdivision 3.
6.18 		Subd. 3.Determination of defined contribution amount. (a) The commissioner 
6.19 	shall determine the defined contribution sliding scale using the base contribution specified 
6.20 	in paragraph (b) for the specified age ranges. The commissioner shall use a sliding scale 
6.21 	for defined contributions that provides:
6.22 	(1) persons with household incomes equal to 133 percent of the federal poverty 
6.23 	guidelines with a defined contribution of 150 percent of the base contribution;
6.24 	(2) persons with household incomes equal to 175 percent of the federal poverty 
6.25 	guidelines with a defined contribution of 100 percent of the base contribution;
6.26 	(3) persons with household incomes equal to or greater than 250 percent of 
6.27 	the federal poverty guidelines with a defined contribution of 80 percent of the base 
6.28 	contribution; and
6.29 	(4) persons with household incomes in evenly spaced increments between the 
6.30 	percentages of the federal poverty guideline specified in clauses (1) to (3) with a base 
6.31 	contribution that is a percentage interpolated from the defined contribution percentages 
6.32 	specified in clauses (1) to (3).

6.33	Age
	Monthly Per-Person Base Contribution
	
6.34	Under 21
	$122.79
	
6.35	21-29
	122.79
	
6.36	30-31
	129.19
	
6.37	32-33
	132.38
	
7.1	34-35
	134.31
	
7.2	36-37
	136.06
	
7.3	38-39
	141.02
	
7.4	40-41
	151.25
	
7.5	42-43
	159.89
	
7.6	44-45
	175.08
	
7.7	46-47
	191.71
	
7.8	48-49
	213.13
	
7.9	50-51
	239.51
	
7.10	52-53
	266.69
	
7.11	54-55
	293.88
	
7.12	56-57
	323.77
	
7.13	58-59
	341.20
	
7.14	60+
	357.19
	
7.15 	(b) The commissioner shall multiply the defined contribution amounts developed 
7.16 	under paragraph (a) by 1.20 for enrollees who are denied coverage under an individual 
7.17 	health plan by a health plan company and who purchase coverage through the Minnesota 
7.18 	Comprehensive Health Association.
7.19 	(c) Notwithstanding paragraphs (a) and (b), the monthly defined contribution shall 
7.20 	not exceed 90 percent of the monthly premium for the health plan purchased by the 
7.21 	enrollee. If the enrollee purchases coverage under a health plan that does not include 
7.22 	mental health services and chemical dependency treatment services, the monthly defined 
7.23 	contribution amount determined under this subdivision shall be reduced by five percent.
7.24 		Subd. 4.Administration by commissioner. The commissioner shall administer the 
7.25 	defined contributions. The commissioner shall:
7.26 	(1) calculate and process defined contributions for enrollees; and
7.27 	(2) pay the defined contribution amount to health plan companies or the Minnesota 
7.28 	Comprehensive Health Association, as applicable, for enrollee health plan coverage.
7.29 		Subd. 5.Assistance to enrollees. The commissioner of human services, in 
7.30 	consultation with the commissioner of commerce, shall develop an efficient and 
7.31 	cost-effective method of referring eligible applicants to professional insurance agent 
7.32 	associations.
7.33 		Subd. 6.Minnesota Comprehensive Health Association (MCHA). Beginning 
7.34 	January 1, 2012, MinnesotaCare enrollees who are denied coverage under an individual 
7.35 	health plan by a health plan company are eligible for coverage through a health plan 
7.36 	offered by the MCHA and may enroll in MCHA according to section 62E.14. Any 
7.37 	difference between the revenue and covered losses to the MCHA related to implementation 
7.38 	of this section shall be paid to the MCHA from the health care access fund.
8.1 		Subd. 7.Federal approval. The commissioner shall seek all federal waivers 
8.2 	and approvals necessary to implement coverage under this section for MinnesotaCare 
8.3 	enrollees eligible under section 256L.04, subdivision 1, with gross family incomes equal 
8.4 	to or greater than 133 percent of the federal poverty guidelines, while continuing to 
8.5 	receive federal matching funds.

8.6 	Sec. 6. Minnesota Statutes 2010, section 256L.05, is amended by adding a subdivision 
8.7 	to read:
8.8 		Subd. 6.Referral of veterans. The commissioner shall ensure that all applicants 
8.9 	for MinnesotaCare with incomes less than 133 percent of the federal poverty guidelines 
8.10 	who identify themselves as veterans are referred to a county veterans service officer for 
8.11 	assistance in applying to the United States Department of Veterans Affairs for any veterans 
8.12 	benefits for which they may be eligible.

8.13 	Sec. 7. COVERAGE FOR LOWER-INCOME MINNESOTACARE 
8.14 	ENROLLEES.
 8.15 	The commissioner of human services shall develop and present to the legislature, 
8.16 	by December 15, 2011, a plan to redesign service delivery for MinnesotaCare enrollees 
8.17 	eligible under Minnesota Statutes, section 256L.04, subdivisions 1 and 7, with incomes 
8.18 	less than 133 percent of the federal poverty guidelines. The plan must be designed to 
8.19 	improve continuity and quality of care, reduce unnecessary emergency room visits, and 
8.20 	reduce average per-enrollee costs. In developing the plan, the commissioner shall consider 
8.21 	innovative methods of service delivery, including but not limited to increasing the use 
8.22 	and choice of private sector health plan coverage and encouraging the use of community 
8.23 	health clinics, as defined in the federal Community Health Care Act of 1964, as health 
8.24 	care homes.

8.25 	Sec. 8. DIRECTION TO COMMISSIONER; FEDERAL WAIVERS.
 8.26 	(a) The commissioner of human services shall apply to the Centers for Medicare 
8.27 	and Medicaid Services (CMS) for federal waivers to cover:
8.28 	(1) families with children eligible under Minnesota Statutes, section 256L.04, 
8.29 	subdivision 1; and
8.30 	(2) adults eligible under Minnesota Statutes, section 256L.04, subdivision 1, 
8.31 	under the MinnesotaCare healthy Minnesota contribution program established under 
8.32 	Minnesota Statutes, section 256L.031, by July 1, 2011. The commissioner shall report to 
8.33 	the legislative committees with jurisdiction over health and human services policy and 
9.1 	finance whether or not the federal waiver application was accepted within ten working 
9.2 	days of receipt of the decision.
9.3 	(b) The commissioner of human services shall apply to the CMS for a section 
9.4 	1115(a) demonstration waiver, and any other necessary federal waivers and amendments, 
9.5 	including, but not limited to, a waiver of the appropriate sections of title XIX, United 
9.6 	States Code, title 42, section 1396a, and a waiver of the maintenance of effort provisions 
9.7 	in section 2001 of the Patient Protection and Affordable Care Act, Public Law 111-148, 
9.8 	that would provide Minnesota with medical assistance program flexibility in exchange 
9.9 	for federal budget certainty. The commissioner shall seek federal approval to enter into 
9.10 	an agreement with CMS under which Minnesota would:
9.11 	(1) accept an aggregate annual allotment for the medical assistance program, trended 
9.12 	forward at an agreed upon rate, with protections to cover medical inflation and projected 
9.13 	caseload growth; and
9.14 	(2) receive federal waivers of Medicaid requirements related to: statewideness and 
9.15 	comparability of services; the amount, duration, and scope of services; freedom of choice; 
9.16 	cost-sharing; and other areas of program administration specified by the commissioner.

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