1.1                          A bill for an act 
  1.2             relating to health; establishing the Sustainable 
  1.3             Health Care Act; providing for reform of health care 
  1.4             coverage and public programs for low-income and 
  1.5             working Minnesotans; requiring a report; appropriating 
  1.6             money. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [UNIVERSAL AFFORDABLE HEALTH COVERAGE.] 
  1.9      Subdivision 1.  [CITATION.] This act shall be known as the 
  1.10  Sustainable Health Care Act.  
  1.11     Subd. 2.  [PURPOSE.] The legislature finds that the 
  1.12  projected rate of growth in health care costs will lead to 
  1.13  unsustainable increases in state spending for health care 
  1.14  programs, unsustainable increases in health insurance premiums 
  1.15  paid by employers and individuals, and unacceptable numbers of 
  1.16  persons who are uninsured.  The legislature further finds that 
  1.17  growth in the number of uninsured Minnesotans will have serious, 
  1.18  detrimental consequences for the entire community, including 
  1.19  declining health status of the population, excessive use of 
  1.20  emergency rooms, lack of preventive care and early diagnosis and 
  1.21  treatment, and cost shifting onto private insurers, local 
  1.22  governments, and nonprofit safety net health care providers.  
  1.23  The purpose of this act is to make changes in public health care 
  1.24  programs and promote new private health coverage options that 
  1.25  will ensure that all Minnesota residents participate in a health 
  1.26  care coverage program for themselves and their dependents and 
  2.1   that all residents contribute to the cost of their health care 
  2.2   according to their ability.  
  2.3      Subd. 3.  [REPORT AND DRAFT LEGISLATION.] The commissioners 
  2.4   of human services, commerce, and health shall jointly prepare a 
  2.5   report and draft legislation for implementing the health care 
  2.6   reforms specified in this act.  The report and draft legislation 
  2.7   must be submitted to the legislature by November 1, 2003.  The 
  2.8   report must include:  
  2.9      (1) an analysis of the expected impact of the reforms 
  2.10  specified in this act on costs of private health coverage and on 
  2.11  the state budget; 
  2.12     (2) an analysis of the expected impact of the reforms 
  2.13  specified in this act on access to health coverage and health 
  2.14  care services in Minnesota and the rate of insurance and 
  2.15  uninsurance; 
  2.16     (3) an analysis of the expected impact of the reforms 
  2.17  specified in this act on quality of health care, including 
  2.18  health status of Minnesotans, treatment outcomes, and consumer 
  2.19  satisfaction; 
  2.20     (4) an analysis of the opportunity for defined measures of 
  2.21  patient outcomes that are of use to Minnesotans in making 
  2.22  value-based health care purchasing decisions; 
  2.23     (5) a detailed plan and proposed budget for implementing 
  2.24  the reforms specified in this act as quickly as feasible; 
  2.25     (6) draft legislation to implement the reforms specified in 
  2.26  this act; and 
  2.27     (7) any recommendations of the commissioners for changes to 
  2.28  the reforms or alternative approaches to those specified in this 
  2.29  act, the rationale for their recommendations, an analysis of the 
  2.30  impact of their recommendations in comparison to the original 
  2.31  recommendations specified in this act, and draft legislation to 
  2.32  implement the commissioners' recommendations as an alternative 
  2.33  to the reforms specified in this act.  Even if the commissioners 
  2.34  make recommendations for changes or alternative approaches, the 
  2.35  report and draft legislation must include a plan and draft 
  2.36  legislation for implementing the reforms as specified in this 
  3.1   act. 
  3.2      Sec. 2.  [STATE HEALTH CARE PROGRAMS.] 
  3.3      Subdivision 1.  [CONSOLIDATION AND REFORM PLAN.] The 
  3.4   commissioners' report under section 1 shall include a plan, 
  3.5   budget, timeline, and proposed legislation to consolidate and 
  3.6   reform the medical assistance, MinnesotaCare, and general 
  3.7   assistance medical care programs for low-income individuals and 
  3.8   families as specified in this act.  Under the reformed system, 
  3.9   the MinnesotaCare comprehensive health plan will provide health 
  3.10  coverage for the lowest income families, children, individuals, 
  3.11  elderly, and disabled persons through a state-administered 
  3.12  program.  For individuals and families whose incomes exceed the 
  3.13  eligibility limits for the comprehensive health plan, the 
  3.14  MinnesotaCare basic health plan will provide a subsidy in the 
  3.15  form of a voucher to partially defray the cost of individual or 
  3.16  group coverage purchased in the private market.  
  3.17     Subd. 2.  [MINNESOTACARE COMPREHENSIVE HEALTH PLAN.] (a) 
  3.18  [ELIGIBILITY.] Eligibility for the MinnesotaCare comprehensive 
  3.19  health plan is limited to persons with incomes under ..... of 
  3.20  the federal poverty guidelines for children and pregnant women, 
  3.21  ..... for parents living with dependent children, and ..... for 
  3.22  adults with no children in the household.  Other eligibility 
  3.23  requirements are as prescribed for the existing medical 
  3.24  assistance program except as specifically changed in this act.  
  3.25     (b) [COVERED BENEFITS.] Benefits covered by the plan are 
  3.26  those specified in Minnesota Statutes, chapter 62D, for small 
  3.27  group health coverage, except as follows: 
  3.28     (1) the commissioner shall seek appropriate federal 
  3.29  approval to offer a benefits plan that incorporates an 
  3.30  alternative enrollee cost-sharing arrangement that allows 
  3.31  enrollees to contribute to a flexible spending account under 
  3.32  section 125 of the Internal Revenue Code of 1986.  The 
  3.33  commissioner may also seek alternative contribution models for 
  3.34  the state subsidy, based on section 105 of the Internal Revenue 
  3.35  Code of 1986; 
  3.36     (2) co-payments shall be charged at the maximum rate 
  4.1   allowable under federal law for prescription drugs and all 
  4.2   services except preventive and prenatal, except that the 
  4.3   co-payment for brand name prescription drugs for which a generic 
  4.4   equivalent is available shall be twice the amount of the 
  4.5   co-payment for the generic equivalent.  The annual out-of-pocket 
  4.6   expense for co-payments is $.... per individual and $..... per 
  4.7   family; 
  4.8      (3) over-the-counter drugs are not covered; 
  4.9      (4) dental services are not covered for persons 12 years of 
  4.10  age and older and a co-payment shall be collected for dental 
  4.11  services; and 
  4.12     (5) optometric services and glasses are covered only for 
  4.13  persons under the age of 18 or over the age of 65.  
  4.14     (c) [DRUG FORMULARY.] The commissioner of human services 
  4.15  may establish a closed drug formulary and may authorize a 
  4.16  prepaid health plan under contract with the commissioner to 
  4.17  establish a closed drug formulary.  
  4.18     (d) [DISEASE MANAGEMENT AND COST CONTAINMENT.] The 
  4.19  commissioner of human services may contract with health plan 
  4.20  companies and other entities to provide coverage to eligible 
  4.21  persons or to provide specific disease management or cost 
  4.22  containment services.  
  4.23     (e) [EMPLOYER SUBSIDIZED COVERAGE.] The MinnesotaCare 
  4.24  comprehensive health plan shall include an option for eligible 
  4.25  persons who have employer-subsidized health coverage to receive 
  4.26  a voucher to purchase coverage through the employer when 
  4.27  determined to be cost-effective under criteria established by 
  4.28  the commissioner of human services.  
  4.29     Subd. 3.  [MINNESOTACARE BASIC HEALTH PLAN.] (a) 
  4.30  [ELIGIBILITY.] Individuals and families with incomes over the 
  4.31  limits specified in subdivision 2, paragraph (a), but less than 
  4.32  200 percent of the federal poverty guideline, and who meet the 
  4.33  general eligibility requirements for the existing MinnesotaCare 
  4.34  program or the general assistance medical care program are 
  4.35  eligible for the MinnesotaCare basic health plan. 
  4.36     (b) [VOUCHER.] Individuals and families who are eligible 
  5.1   for the MinnesotaCare basic health plan will receive a voucher 
  5.2   that will provide a partial subsidy to purchase individual or 
  5.3   family health coverage from a private health plan or through the 
  5.4   purchasing pool or pools established in section 3.  The amount 
  5.5   of the voucher shall be based on income and family size and 
  5.6   shall be determined according to criteria developed by the 
  5.7   commissioners.  The voucher may be used for both individual and 
  5.8   group policies.  An adult with no dependent children whose 
  5.9   income is less than 200 percent of the federal poverty guideline 
  5.10  but more than the limits specified for the MinnesotaCare 
  5.11  comprehensive health plan is subject to the limit of their 
  5.12  deductible. 
  5.13     (c) [MINNESOTACARE BASIC BENEFITS.] The MinnesotaCare basic 
  5.14  health plan covers the benefits specified for the existing 
  5.15  MinnesotaCare program, except that the annual limit on inpatient 
  5.16  hospital expenses is $....... and eligible individuals and 
  5.17  families are required to participate in cost-sharing as 
  5.18  prescribed by the commissioner.  
  5.19     Sec. 3.  [PURCHASING POOL.] 
  5.20     A public corporation will be established to offer pooled 
  5.21  health coverage to individuals and families that do not have 
  5.22  access to employer-subsidized health coverage, as defined under 
  5.23  Minnesota Statutes, section 256.956, subdivision 1, or who wish 
  5.24  to purchase an individual insurance product.  The purchasing 
  5.25  pool or pools must offer at least two types of plans that are 
  5.26  similar to the typical small employer insurance plan issued in 
  5.27  Minnesota. 
  5.28     Sec. 4.  [HEALTH COVERAGE REQUIRED.] 
  5.29     The commissioners' report and draft legislation must 
  5.30  include a requirement that all Minnesota residents shall 
  5.31  contribute to the cost of health care according to their 
  5.32  ability, either by purchasing or enrolling in health coverage or 
  5.33  by paying into an uninsurance fund that will be used to pay 
  5.34  health care providers for health care services provided to 
  5.35  uninsured individuals.  The report and draft legislation must 
  5.36  include a method of collecting payment from individuals who 
  6.1   choose not to purchase or enroll in health coverage.  The report 
  6.2   and draft legislation must include a method for health care 
  6.3   providers to inform an uninsured person who seeks treatment 
  6.4   about the coverage requirement and to initiate an application 
  6.5   and enrollment process for public programs for which the 
  6.6   uninsured person appears eligible.  The report and draft 
  6.7   legislation must establish a method of partially reimbursing 
  6.8   health care providers for providing uncompensated care to 
  6.9   uninsured persons.  Reimbursement for uncompensated care cannot 
  6.10  exceed a defined percent of the billed charges for the services. 
  6.11     Sec. 5.  [COVERAGE FOR HIGH-RISK AND UNINSURABLE PERSONS.] 
  6.12     The commissioners' report and draft legislation must 
  6.13  include a requirement that all health plan companies offering 
  6.14  individual, nongroup coverage must provide coverage on a 
  6.15  guaranteed issue basis and subject to the premium rating bands 
  6.16  specified in ...........  The report and draft legislation must 
  6.17  also include a transition process for converting the Minnesota 
  6.18  comprehensive health association plan for uninsured persons to a 
  6.19  state-sponsored stop-loss mechanism to cover 80 percent of some 
  6.20  claims in excess of $50,000 for an enrolled individual.  
  6.21     Sec. 6.  [AFFORDABILITY OF HEALTH COVERAGE.] 
  6.22     The intent of this act is to ensure that all Minnesota 
  6.23  residents have access to affordable health coverage.  For 
  6.24  purposes of this act, "affordable" means that the sum of the 
  6.25  annual premium payment, the annual deductible, and the annual 
  6.26  out-of-pocket maximum does not exceed .. percent of an 
  6.27  individual or family's adjusted gross income as determined under 
  6.28  federal income tax laws and regulations.  The premium payments, 
  6.29  deductibles, and out-of-pocket maximum for the public programs 
  6.30  established according to this act shall be set at amounts that 
  6.31  do not exceed the affordability percentage specified in this 
  6.32  section.  If it is not possible to implement the programs in 
  6.33  this act using the amounts appropriated for public health care 
  6.34  programs without requiring individuals and families to pay more 
  6.35  than the affordability percentage specified in this section, the 
  6.36  commissioners shall recommend changes to covered benefits, 
  7.1   alternative plan designs, and cost containment features that 
  7.2   will ensure that the affordability percentage is not exceeded.  
  7.3      Sec. 7.  [OUTREACH AND SPECIAL PROGRAM GRANTS.] 
  7.4      The report and draft legislation must eliminate all grant 
  7.5   programs and funding for outreach and special programs and 
  7.6   activities so that money appropriated for health care programs 
  7.7   is used only to pay for health coverage and health care services 
  7.8   for individuals and families.  The report and draft legislation 
  7.9   must authorize health care providers and health plan companies 
  7.10  serving state program recipients to market directly to 
  7.11  potentially eligible persons and to assist those persons with 
  7.12  the application and enrollment process.  
  7.13     Sec. 8.  [TAXES AND FINANCING.] 
  7.14     The commissioners' report and draft legislation shall make 
  7.15  recommendations, developed in consultation with the commissioner 
  7.16  of revenue, for any taxes or other funding arrangements 
  7.17  necessary to finance the programs specified in this act. 
  7.18     Sec. 9.  [FEDERAL WAIVERS.] 
  7.19     The commissioner of human services shall seek authorization 
  7.20  from the federal government to implement this act in the form of 
  7.21  waivers or federal legislation.  The commissioners' report and 
  7.22  draft legislation must be based on the federal waivers or 
  7.23  legislation that are reasonably likely to be granted.  However, 
  7.24  the report and draft legislation must also include a contingency 
  7.25  plan for implementing this act even without receiving federal 
  7.26  waivers or authorization.  
  7.27     Sec. 10.  [APPROPRIATIONS.] 
  7.28     The following amounts are appropriated from the general 
  7.29  fund to the respective commissioners for the fiscal year ending 
  7.30  June 30, 2004: 
  7.31     (1) human services, $....... 
  7.32     (2) commerce, $....... 
  7.33     (3) health, $....... 
  7.34     Sec. 11.  [EFFECTIVE DATE.] 
  7.35     This act is effective the day following final enactment.