1.1 	A bill for an act
1.2 	relating to health; eliminating the MinnesotaCare
1.3 	limited benefit set for adults without children;
1.4 	providing an increase for certain facilities and
1.5 	providers; repealing the MA and alternative care cost
1.6 	recovery and lien provisions; reducing fees for
1.7 	parents of children on TEFRA and other programs;
1.8 	permitting individuals and small employers to purchase
1.9 	health insurance through state plans; reducing health
1.10 	care taxes; establishing a prescription drug discount
1.11 	program; reducing the county share for long-term
1.12 	placements; adding a health care cost containment fee
1.13 	on cigarette distributors; reducing expenditures for
1.14 	professional contracts; reducing spending on managed
1.15 	care and health care access fund; increasing
1.16 	MinnesotaCare premiums; transferring funds;
1.17 	appropriating money; amending Minnesota Statutes 2004,
1.18 	sections 43A.27, subdivision 2, by adding a
1.19 	subdivision; 252.27, subdivision 2a; 256B.15,
1.20 	subdivisions 1, 1a, 2, 3, 4; 256B.19, subdivision 1;
1.21 	256B.431, by adding a subdivision; 256B.5012, by
1.22 	adding a subdivision; 256B.765; 256L.02, by adding a
1.23 	subdivision; 256L.03, subdivision 1; 256L.04,
1.24 	subdivisions 1, 7a, by adding subdivisions; 256L.05,
1.25 	subdivisions 1, 3a; 256L.07, as amended; 256L.09, by
1.26 	adding a subdivision; 256L.12, subdivision 6; 256L.15,
1.27 	subdivisions 2, as amended, 3, by adding a
1.28 	subdivision; 256L.17, subdivision 5; 295.52,
1.29 	subdivisions 1, 1a, 2, 3; 325D.32, subdivision 9;
1.30 	514.981, subdivision 6; 524.3-805; proposing coding
1.31 	for new law in Minnesota Statutes, chapters 43A; 62J;
1.32 	256; repealing Minnesota Statutes 2004, sections
1.33 	256B.15, subdivisions 1c, 1d, 1e, 1f, 1g, 1h, 1i, 1j,
1.34 	1k; 256L.035; 514.991; 514.992; 514.993; 514.994;
1.35 	514.995.
1.36 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.37 	ARTICLE 1
1.38 	HEALTH CARE INITIATIVES

1.39 	Section 1. [62J.27] HEALTH CARE COST CONTAINMENT FEE.
1.40 		Subdivision 1.Imposition of fee. A health care cost
2.1 	containment fee is imposed on and collected from cigarette
2.2 	distributors to recover for the state health costs related to or
2.3 	caused by smoking and to reduce smoking, particularly by youths.
2.4 		Subd. 2.Definitions. The definitions under section
2.5 	297F.01 apply to this section.
2.6 		Subd. 3.Computation of fee. (a) The legislature shall
2.7 	biennially set the amount of the fee by law based on an estimate
2.8 	of the health costs to the state of cigarette smoking.  The fee
2.9 	for fiscal year 2006 and for each succeeding fiscal year is
2.10 	$133,000,000 until modified by law.
2.11 	(b) For each fiscal year, the commissioner shall determine
2.12 	each cigarette distributor's fee and notify the distributor by
2.13 	the first day of May preceding the beginning of the fiscal
2.14 	year.  A distributor's fee is determined by multiplying the
2.15 	total fee under paragraph (a) by a fraction, the numerator of
2.16 	which is the number of tax stamps purchased by the distributor
2.17 	under chapter 297F in the calendar year ending during the
2.18 	previous fiscal year and the denominator of which is the total
2.19 	number of tax stamps purchased under chapter 297F in that period
2.20 	by all distributors.
2.21 		Subd. 4.Successors in interest; new entrants. (a) A
2.22 	"distributor" includes any individual or entity that is the
2.23 	successor in interest to a distributor, including any entity
2.24 	that has substantially acquired the business assets of a
2.25 	distributor.  The successor in interest is liable for the fee
2.26 	under this section.  The commissioner shall calculate and impose
2.27 	the fee on a successor in interest on a basis that includes the
2.28 	purchases of tax stamps by its predecessor, as well as any
2.29 	purchases made by the successor entity or person itself, during
2.30 	the relevant period.
2.31 	(b) If a distributor did not purchase tax stamps for at
2.32 	least 500,000 cigarettes in each month of the calendar year
2.33 	ending during the previous fiscal year, the fee under this
2.34 	section must be applied at the rate under subdivision 6 for the
2.35 	fiscal year.  The commissioner shall notify the distributor that
2.36 	its fee will be calculated and imposed under this paragraph by
3.1 	the first day of May preceding the fiscal year and the
3.2 	distributor shall pay the fee with each of its monthly tax
3.3 	returns filed under section 297F.09 for the fiscal year.
3.4 		Subd. 5.Payment. A distributor must pay the fee in
3.5 	equal monthly installments in the same time and manner as
3.6 	provided for payment of tax under chapter 297F.  The
3.7 	commissioner shall bill distributors for the fee.  This may be
3.8 	done at the time the commissioner notifies the distributor of
3.9 	its annual liability for the fee or at another time or in a
3.10 	manner the commissioner determines to be adequate and
3.11 	appropriate.
3.12 		Subd. 6.Fee on use of unstamped cigarettes. (a) The
3.13 	commissioner shall estimate the average rate of the fee under
3.14 	this section on a per cigarette basis for each fiscal year to
3.15 	which the fee applies.  The commissioner shall publish this rate
3.16 	in the State Register by June 15 preceding the beginning of the
3.17 	fiscal year.
3.18 	(b) Any person, other than a distributor, that purchases or
3.19 	possesses cigarettes that have not been stamped or taxed under
3.20 	chapter 297F is liable for the fee under this section on the
3.21 	possession or use of those cigarettes at the rate published in
3.22 	the State Register for the fiscal year.
3.23 		Subd. 7.Administration. The audit, assessment,
3.24 	interest, appeal, refund, and collection provisions applicable
3.25 	to the taxes imposed under chapter 297F apply to the fee imposed
3.26 	under this section.
3.27 		Subd. 8.License revocation. (a) The commissioner may
3.28 	revoke or suspend the license of a distributor for failure to
3.29 	pay the fee or otherwise comply with the requirements under this
3.30 	section.  The provisions and procedures under section 297F.04
3.31 	apply to a suspension or revocation under this subdivision.
3.32 	(b) The commissioner may revoke a retailer's sales or use
3.33 	tax permit under section 297F.185 if:
3.34 	(1) the retailer, directly or indirectly, purchases for
3.35 	resale 20,000 cigarettes or more from a distributor that has not
3.36 	paid the fee under this section; and 
4.1 	(2) the commissioner has notified the person that the
4.2 	distributor has not paid the fee before the purchase was made or
4.3 	the commissioner has posted notice that the distributor is in
4.4 	violation of the fee law on the department's Web site at least
4.5 	15 days before the sale was made.
4.6 		Subd. 9.Deposit of revenues. The commissioner shall
4.7 	deposit the revenues from the fee under this section in the
4.8 	health care cost containment dedicated account.
4.9 		Subd. 10.Exemption; administrative procedure act. The
4.10 	commissioner's calculations of the fee amounts under this
4.11 	section are not subject to the provisions of the Administrative
4.12 	Procedure Act, chapter 14.
4.13 	
EFFECTIVE DATE. This section is effective July 1, 2005.
4.14 	The fee for fiscal year 2006 applies at five-sixths the amount
4.15 	under section 62J.27, subdivision 3, and payments are due in ten
4.16 	equal monthly installments beginning in September 2005.  The
4.17 	commissioner of revenue shall notify distributors of their
4.18 	liability for the fee and monthly payment schedule by no later
4.19 	than August 15, 2005.

4.20 	Sec. 2. Minnesota Statutes 2004, section 252.27,
4.21 	subdivision 2a, is amended to read:
4.22 		Subd. 2a.Contribution amount.  (a) The natural or
4.23 	adoptive parents of a minor child, including a child determined
4.24 	eligible for medical assistance without consideration of
4.25 	parental income, must contribute to the cost of services used by
4.26 	making monthly payments on a sliding scale based on income,
4.27 	unless the child is married or has been married, parental rights
4.28 	have been terminated, or the child's adoption is subsidized
4.29 	according to section 259.67 or through title IV-E of the Social
4.30 	Security Act.
4.31 	(b) For households with adjusted gross income equal to or
4.32 	greater than 100 percent of federal poverty guidelines, the
4.33 	parental contribution shall be computed by applying the
4.34 	following schedule of rates to the adjusted gross income of the
4.35 	natural or adoptive parents:
4.36 	(1) if the adjusted gross income is equal to or greater
5.1 	than 100 percent of federal poverty guidelines and less than 175
5.2 	percent of federal poverty guidelines, the parental contribution
5.3 	is $4 per month;
5.4 	(2) if the adjusted gross income is equal to or greater
5.5 	than 175 percent of federal poverty guidelines and less than or
5.6 	equal to 375 545 percent of federal poverty guidelines, the
5.7 	parental contribution shall be determined using a sliding fee
5.8 	scale established by the commissioner of human services which
5.9 	begins at one percent of adjusted gross income at 175 percent of
5.10 	federal poverty guidelines and increases to 7.5 percent of
5.11 	adjusted gross income for those with adjusted gross income up to
5.12 	375 545 percent of federal poverty guidelines;
5.13 	(3) if the adjusted gross income is greater than 375 545 
5.14 	percent of federal poverty guidelines and less than 675 percent
5.15 	of federal poverty guidelines, the parental contribution shall
5.16 	be 7.5 percent of adjusted gross income;
5.17 	(4) if the adjusted gross income is equal to or greater
5.18 	than 675 percent of federal poverty guidelines and less than 975
5.19 	percent of federal poverty guidelines, the parental contribution
5.20 	shall be determined using a sliding fee scale established by the
5.21 	commissioner of human services which begins at 7.5 percent of
5.22 	adjusted gross income at 675 percent of federal poverty
5.23 	guidelines and increases to ten percent of adjusted gross income
5.24 	for those with adjusted gross income up to 975 percent of
5.25 	federal poverty guidelines; and
5.26 	(5) if the adjusted gross income is equal to or greater
5.27 	than 975 percent of federal poverty guidelines, the parental
5.28 	contribution shall be 12.5 percent of adjusted gross income.
5.29 	If the child lives with the parent, the annual adjusted
5.30 	gross income is reduced by $2,400 prior to calculating the
5.31 	parental contribution.  If the child resides in an institution
5.32 	specified in section 256B.35, the parent is responsible for the
5.33 	personal needs allowance specified under that section in
5.34 	addition to the parental contribution determined under this
5.35 	section.  The parental contribution is reduced by any amount
5.36 	required to be paid directly to the child pursuant to a court
6.1 	order, but only if actually paid.
6.2 	(c) The household size to be used in determining the amount
6.3 	of contribution under paragraph (b) includes natural and
6.4 	adoptive parents and their dependents, including the child
6.5 	receiving services.  Adjustments in the contribution amount due
6.6 	to annual changes in the federal poverty guidelines shall be
6.7 	implemented on the first day of July following publication of
6.8 	the changes.
6.9 	(d) For purposes of paragraph (b), "income" means the
6.10 	adjusted gross income of the natural or adoptive parents
6.11 	determined according to the previous year's federal tax form,
6.12 	except, effective retroactive to July 1, 2003, taxable capital
6.13 	gains to the extent the funds have been used to purchase a home
6.14 	shall not be counted as income.
6.15 	(e) The contribution shall be explained in writing to the
6.16 	parents at the time eligibility for services is being
6.17 	determined.  The contribution shall be made on a monthly basis
6.18 	effective with the first month in which the child receives
6.19 	services.  Annually upon redetermination or at termination of
6.20 	eligibility, if the contribution exceeded the cost of services
6.21 	provided, the local agency or the state shall reimburse that
6.22 	excess amount to the parents, either by direct reimbursement if
6.23 	the parent is no longer required to pay a contribution, or by a
6.24 	reduction in or waiver of parental fees until the excess amount
6.25 	is exhausted.
6.26 	(f) The monthly contribution amount must be reviewed at
6.27 	least every 12 months; when there is a change in household size;
6.28 	and when there is a loss of or gain in income from one month to
6.29 	another in excess of ten percent.  The local agency shall mail a
6.30 	written notice 30 days in advance of the effective date of a
6.31 	change in the contribution amount.  A decrease in the
6.32 	contribution amount is effective in the month that the parent
6.33 	verifies a reduction in income or change in household size.
6.34 	(g) Parents of a minor child who do not live with each
6.35 	other shall each pay the contribution required under paragraph
6.36 	(a).  An amount equal to the annual court-ordered child support
7.1 	payment actually paid on behalf of the child receiving services
7.2 	shall be deducted from the adjusted gross income of the parent
7.3 	making the payment prior to calculating the parental
7.4 	contribution under paragraph (b).
7.5 	(h) The contribution under paragraph (b) shall be increased
7.6 	by an additional five percent if the local agency determines
7.7 	that insurance coverage is available but not obtained for the
7.8 	child.  For purposes of this section, "available" means the
7.9 	insurance is a benefit of employment for a family member at an
7.10 	annual cost of no more than five percent of the family's annual
7.11 	income.  For purposes of this section, "insurance" means health
7.12 	and accident insurance coverage, enrollment in a nonprofit
7.13 	health service plan, health maintenance organization,
7.14 	self-insured plan, or preferred provider organization.
7.15 	Parents who have more than one child receiving services
7.16 	shall not be required to pay more than the amount for the child
7.17 	with the highest expenditures.  There shall be no resource
7.18 	contribution from the parents.  The parent shall not be required
7.19 	to pay a contribution in excess of the cost of the services
7.20 	provided to the child, not counting payments made to school
7.21 	districts for education-related services.  Notice of an increase
7.22 	in fee payment must be given at least 30 days before the
7.23 	increased fee is due.
7.24 	(i) The contribution under paragraph (b) shall be reduced
7.25 	by $300 per fiscal year if, in the 12 months prior to July 1:
7.26 	(1) the parent applied for insurance for the child;
7.27 	(2) the insurer denied insurance;
7.28 	(3) the parents submitted a complaint or appeal, in writing
7.29 	to the insurer, submitted a complaint or appeal, in writing, to
7.30 	the commissioner of health or the commissioner of commerce, or
7.31 	litigated the complaint or appeal; and
7.32 	(4) as a result of the dispute, the insurer reversed its
7.33 	decision and granted insurance.
7.34 	For purposes of this section, "insurance" has the meaning
7.35 	given in paragraph (h).
7.36 	A parent who has requested a reduction in the contribution
8.1 	amount under this paragraph shall submit proof in the form and
8.2 	manner prescribed by the commissioner or county agency,
8.3 	including, but not limited to, the insurer's denial of
8.4 	insurance, the written letter or complaint of the parents, court
8.5 	documents, and the written response of the insurer approving
8.6 	insurance.  The determinations of the commissioner or county
8.7 	agency under this paragraph are not rules subject to chapter 14.

8.8 	Sec. 3. [256.9545] PRESCRIPTION DRUG DISCOUNT PROGRAM.
8.9 		Subdivision 1.Establishment; administration. The
8.10 	commissioner shall establish and administer the prescription
8.11 	drug discount program, effective January 1, 2006.
8.12 	Subd. 2.[COMMISSIONER'S AUTHORITY.] The commissioner
8.13 	shall administer a drug rebate program for drugs purchased
8.14 	according to the prescription drug discount program.  The
8.15 	commissioner shall require a rebate agreement from all
8.16 	manufacturers of covered drugs as defined in section 256B.0625,
8.17 	subdivision 13.  For each drug, the amount of the rebate shall
8.18 	be equal to the rebate as defined for purposes of the federal
8.19 	rebate program in United States Code, title 42, section
8.20 	1396r-8.  The rebate program shall utilize the terms and
8.21 	conditions used for the federal rebate program established
8.22 	according to section 1927 of title XIX of the federal Social
8.23 	Security Act.
8.24 		Subd. 3.Definitions. For the purpose of this section,
8.25 	the following terms have the meanings given them.
8.26 	(a) "Commissioner" means the commissioner of human services.
8.27 	(b) "Manufacturer" means a manufacturer as defined in
8.28 	section 151.44, paragraph (c).
8.29 	(c) "Covered prescription drug" means a prescription drug
8.30 	as defined in section 151.44, paragraph (d), that is covered
8.31 	under medical assistance as described in section 256B.0625,
8.32 	subdivision 13, and that is provided by a manufacturer that has
8.33 	a fully executed rebate agreement with the commissioner under
8.34 	this section and complies with that agreement.
8.35 	(d) "Health carrier" means an insurance company licensed
8.36 	under chapter 60A to offer, sell, or issue an individual or
9.1 	group policy of accident and sickness insurance as defined in
9.2 	section 62A.01; a nonprofit health service plan corporation
9.3 	operating under chapter 62C; a health maintenance organization
9.4 	operating under chapter 62D; a joint self-insurance employee
9.5 	health plan operating under chapter 62H; a community integrated
9.6 	systems network licensed under chapter 62N; a fraternal benefit
9.7 	society operating under chapter 64B; a city, county, school
9.8 	district, or other political subdivision providing self-insured
9.9 	health coverage under section 471.617 or sections 471.98 to
9.10 	471.982; and a self-funded health plan under the Employee
9.11 	Retirement Income Security Act of 1974, as amended.
9.12 	(e) "Participating pharmacy" means a pharmacy as defined in
9.13 	section 151.01, subdivision 2, that agrees to participate in the
9.14 	prescription drug discount program.
9.15 	(f) "Enrolled individual" means a person who is eligible
9.16 	for the program under subdivision 4 and has enrolled in the
9.17 	program according to subdivision 5.
9.18 		Subd. 4.Eligible persons. To be eligible for the
9.19 	program, an applicant must:
9.20 	(1) be a permanent resident of Minnesota as defined in
9.21 	section 256L.09, subdivision 4;
9.22 	(2) not be enrolled in Medicare, medical assistance,
9.23 	general assistance medical care, MinnesotaCare, or the
9.24 	prescription drug program under section 256.955;
9.25 	(3) not be enrolled in and have currently available
9.26 	prescription drug coverage under a health plan offered by a
9.27 	health carrier or employer or under a pharmacy benefit program
9.28 	offered by a pharmaceutical manufacturer; and 
9.29 	(4) not be enrolled in and have currently available
9.30 	prescription drug coverage under a Medicare supplement plan, as
9.31 	defined in sections 62A.31 to 62A.44, or policies, contracts, or
9.32 	certificates that supplement Medicare issued by health
9.33 	maintenance organizations or those policies, contracts, or
9.34 	certificates governed by section 1833 or 1876 of the federal
9.35 	Social Security Act, United States Code, title 42, section 1395,
9.36 	et seq., as amended.
10.1 		Subd. 5.Application procedure. (a) Applications and
10.2 	information on the program must be made available at county
10.3 	social services agencies, health care provider offices, and
10.4 	agencies and organizations serving senior citizens.  Individuals
10.5 	shall submit applications and any information specified by the
10.6 	commissioner as being necessary to verify eligibility directly
10.7 	to the commissioner.  The commissioner shall determine an
10.8 	applicant's eligibility for the program within 30 days from the
10.9 	date the application is received.  Upon notice of approval, the
10.10 	applicant must submit to the commissioner the enrollment fee
10.11 	specified in subdivision 10.  Eligibility begins the month after
10.12 	the enrollment fee is received by the commissioner.
10.13 	(b) An enrollee's eligibility must be renewed every 12
10.14 	months with the 12-month period beginning in the month after the
10.15 	application is approved.
10.16 	(c) The commissioner shall develop an application form that
10.17 	does not exceed one page in length and requires information
10.18 	necessary to determine eligibility for the program.
10.19 		Subd. 6.Participating pharmacy. According to a valid
10.20 	prescription, a participating pharmacy must sell a covered
10.21 	prescription drug to an enrolled individual at the pharmacy's
10.22 	usual and customary retail price, minus an amount that is equal
10.23 	to the rebate amount described in subdivision 8, plus the amount
10.24 	of any switch fee established by the commissioner under
10.25 	subdivision 10.  Each participating pharmacy shall provide the
10.26 	commissioner with all information necessary to administer the
10.27 	program, including, but not limited to, information on
10.28 	prescription drug sales to enrolled individuals and usual and
10.29 	customary retail prices.
10.30 		Subd. 7.Notification of rebate amount. The commissioner
10.31 	shall notify each drug manufacturer, each calendar quarter or
10.32 	according to a schedule to be established by the commissioner,
10.33 	of the amount of the rebate owed on the prescription drugs sold
10.34 	by participating pharmacies to enrolled individuals.
10.35 		Subd. 8.Provision of rebate. To the extent that a
10.36 	manufacturer's prescription drugs are prescribed to a resident
11.1 	of this state, the manufacturer must provide a rebate equal to
11.2 	the rebate provided under the medical assistance program for any
11.3 	prescription drug distributed by the manufacturer that is
11.4 	purchased by an enrolled individual at a participating
11.5 	pharmacy.  The manufacturer must provide full payment within 30
11.6 	days of receipt of the state invoice for the rebate, or
11.7 	according to a schedule to be established by the commissioner.
11.8 	The commissioner shall deposit all rebates received into the
11.9 	Minnesota prescription drug dedicated fund established under
11.10 	subdivision 11.  The manufacturer must provide the commissioner
11.11 	with any information necessary to verify the rebate determined
11.12 	per drug.
11.13 		Subd. 9.Payment to pharmacies. The commissioner shall
11.14 	distribute on a biweekly basis an amount that is equal to an
11.15 	amount collected under subdivision 8 to each participating
11.16 	pharmacy based on the prescription drugs sold by that pharmacy
11.17 	to enrolled individuals.
11.18 		Subd. 10.Enrollment fee; switch fee. (a) The
11.19 	commissioner shall establish an annual enrollment fee that
11.20 	covers the commissioner's expenses for enrollment, processing
11.21 	claims, and distributing rebates under this program.
11.22 	(b) The commissioner shall establish a reasonable switch
11.23 	fee that covers expenses incurred by pharmacies in formatting
11.24 	for electronic submission claims for prescription drugs sold to
11.25 	enrolled individuals.
11.26 		Subd. 11.Dedicated fund; creation; use of fund. (a) The
11.27 	Minnesota prescription drug dedicated fund is established as an
11.28 	account in the state treasury.  The commissioner of finance
11.29 	shall credit to the dedicated fund all rebates paid under
11.30 	subdivision 8, any federal funds received for the program, all
11.31 	enrollment fees paid by the enrollees, and any appropriations or
11.32 	allocations designated for the fund.  The commissioner of
11.33 	finance shall ensure that fund money is invested under section
11.34 	11A.25.  All money earned by the fund must be credited to the
11.35 	fund.  The fund shall earn a proportionate share of the total
11.36 	state annual investment income.
12.1 	(b) Money in the fund is appropriated to the commissioner
12.2 	to reimburse participating pharmacies for prescription drug
12.3 	discounts provided to enrolled individuals under this section;
12.4 	to reimburse the commissioner for costs related to enrollment,
12.5 	processing claims, and distributing rebates and for other
12.6 	reasonable administrative costs related to administration of the
12.7 	prescription drug discount program; and to repay the
12.8 	appropriation provided for this section.  The commissioner must
12.9 	administer the program so that the costs total no more than
12.10 	funds appropriated plus the drug rebate proceeds.

12.11 	Sec. 4. Minnesota Statutes 2004, section 256B.19,
12.12 	subdivision 1, is amended to read:
12.13 		Subdivision 1.Division of cost.  The state and county
12.14 	share of medical assistance costs not paid by federal funds
12.15 	shall be as follows:
12.16 	(1) beginning January 1, 1992, 50 percent state funds and
12.17 	50 percent county funds for the cost of placement of severely
12.18 	emotionally disturbed children in regional treatment centers;
12.19 	(2) beginning January 1, 2003, 80 percent state funds and
12.20 	20 percent county funds for the costs of nursing facility
12.21 	placements of persons with disabilities under the age of 65 that
12.22 	have exceeded 90 days.  This clause shall be subject to chapter
12.23 	256G and shall not apply to placements in facilities not
12.24 	certified to participate in medical assistance;
12.25 	(3) beginning July 1, 2004 2005, 80 percent state funds and
12.26 	20 5 percent county funds for the costs of placements that have
12.27 	exceeded 90 days in intermediate care facilities for persons
12.28 	with mental retardation or a related condition that have seven
12.29 	or more beds.  This provision includes pass-through payments
12.30 	made under section 256B.5015; and
12.31 	(4) beginning July 1, 2004, when state funds are used to
12.32 	pay for a nursing facility placement due to the facility's
12.33 	status as an institution for mental diseases (IMD), the county
12.34 	shall pay 20 percent of the nonfederal share of costs that have
12.35 	exceeded 90 days.  This clause is subject to chapter 256G.
12.36 	For counties that participate in a Medicaid demonstration
13.1 	project under sections 256B.69 and 256B.71, the division of the
13.2 	nonfederal share of medical assistance expenses for payments
13.3 	made to prepaid health plans or for payments made to health
13.4 	maintenance organizations in the form of prepaid capitation
13.5 	payments, this division of medical assistance expenses shall be
13.6 	95 percent by the state and five percent by the county of
13.7 	financial responsibility.
13.8 	In counties where prepaid health plans are under contract
13.9 	to the commissioner to provide services to medical assistance
13.10 	recipients, the cost of court ordered treatment ordered without
13.11 	consulting the prepaid health plan that does not include
13.12 	diagnostic evaluation, recommendation, and referral for
13.13 	treatment by the prepaid health plan is the responsibility of
13.14 	the county of financial responsibility.

13.15 	Sec. 5. Minnesota Statutes 2004, section 256B.431, is
13.16 	amended by adding a subdivision to read:
13.17 		Subd. 41.Nursing facility rate increases beginning july
13.18 	1, 2005, and july 1, 2006. For the rate years beginning July 1,
13.19 	2005, and July 1, 2006, the commissioner shall provide nursing
13.20 	facilities reimbursed under this section, section 256B.434, or
13.21 	256B.440 with an adjustment to the total operating payment rate
13.22 	of three percent.  At least two-thirds of each year's adjustment
13.23 	must be used for increased costs of employee salaries and
13.24 	benefits and associated costs for FICA, the Medicare tax,
13.25 	workers' compensation premiums, and federal and state
13.26 	unemployment insurance.  Each facility receiving an adjustment
13.27 	shall report to the commissioner, in the form and manner
13.28 	specified by the commissioner, on how the additional funding was
13.29 	used.

13.30 	Sec. 6. Minnesota Statutes 2004, section 256B.5012, is
13.31 	amended by adding a subdivision to read:
13.32 		Subd. 6.Icf/mr rate increases beginning january 1, 2006,
13.33 	and january 1, 2007. For the rate years beginning January 1,
13.34 	2006, and January 1, 2007, the commissioner shall provide
13.35 	facilities reimbursed under this section an adjustment to the
13.36 	total operating payment rate of three percent.  At least
14.1 	two-thirds of each year's adjustment must be used for increased
14.2 	costs of employee salaries and benefits and associated costs for
14.3 	FICA, the Medicare tax, workers' compensation premiums, and
14.4 	federal and state unemployment insurance.  Each facility
14.5 	receiving an adjustment shall report to the commissioner, in the
14.6 	form and manner specified by the commissioner, on how the
14.7 	additional funding was used.

14.8 	Sec. 7. Minnesota Statutes 2004, section 256B.765, is
14.9 	amended to read:
14.10 	256B.765 PROVIDER RATE INCREASES.
14.11 		Subdivision 1.Annual inflation adjustments. (a)
14.12 	Effective July 1, 2001, within the limits of appropriations
14.13 	specifically for this purpose, the commissioner shall provide an
14.14 	annual inflation adjustment for the providers listed
14.15 	in paragraph (c) subdivision 2.  The index for the inflation
14.16 	adjustment must be based on the change in the Employment Cost
14.17 	Index for Private Industry Workers - Total Compensation
14.18 	forecasted by Data Resources, Inc., as forecasted in the fourth
14.19 	quarter of the calendar year preceding the fiscal year.  The
14.20 	commissioner shall increase reimbursement or allocation rates by
14.21 	the percentage of this adjustment, and county boards shall
14.22 	adjust provider contracts as needed.
14.23 	(b) The commissioner of finance shall include an annual
14.24 	inflationary adjustment in reimbursement rates for the providers
14.25 	listed in paragraph (c) subdivision 2 using the inflation factor
14.26 	specified in paragraph (a) as a budget change request in each
14.27 	biennial detailed expenditure budget submitted to the
14.28 	legislature under section 16A.11.
14.29 	(c) Subd. 2.[ELIGIBLE PROVIDERS.] The annual adjustment
14.30 	under subdivision 1,paragraph (a),shall be provided for home
14.31 	and community-based waiver services for persons with mental
14.32 	retardation or related conditions under section 256B.501; home
14.33 	and community-based waiver services for the elderly under
14.34 	section 256B.0915; waivered services under community
14.35 	alternatives for disabled individuals under section 256B.49;
14.36 	community alternative care waivered services under section
15.1 	256B.49; traumatic brain injury waivered services under section
15.2 	256B.49; nursing services and home health services under section
15.3 	256B.0625, subdivision 6a; personal care services and nursing
15.4 	supervision of personal care services under section 256B.0625,
15.5 	subdivision 19a; private duty nursing services under section
15.6 	256B.0625, subdivision 7; day training and habilitation services
15.7 	for adults with mental retardation or related conditions under
15.8 	sections 252.40 to 252.46; physical therapy services under
15.9 	sections 256B.0625, subdivision 8, and 256D.03, subdivision 4;
15.10 	occupational therapy services under sections 256B.0625,
15.11 	subdivision 8a, and 256D.03, subdivision 4; speech-language
15.12 	therapy services under section 256D.03, subdivision 4, and
15.13 	Minnesota Rules, part 9505.0390; respiratory therapy services
15.14 	under section 256D.03, subdivision 4, and Minnesota Rules, part
15.15 	9505.0295; alternative care services under section 256B.0913;
15.16 	adult residential program grants under Minnesota Rules, parts
15.17 	9535.2000 to 9535.3000; adult and family community support
15.18 	grants under Minnesota Rules, parts 9535.1700 to 9535.1760;
15.19 	semi-independent living services under section 252.275 including
15.20 	SILS funding under county social services grants formerly funded
15.21 	under chapter 256I; and community support services for deaf and
15.22 	hard-of-hearing adults with mental illness who use or wish to
15.23 	use sign language as their primary means of communication.
15.24 		Subd. 3.Rate increase for biennium beginning july 1,
15.25 	2005. For the fiscal years beginning July 1, 2005, and July 1,
15.26 	2006, the commissioner shall increase reimbursement rates for
15.27 	the providers listed in subdivision 2 by three percent.  At
15.28 	least two-thirds of each year's adjustment must be used for
15.29 	increased costs of employee salaries and benefits and associated
15.30 	costs for FICA, the Medicare tax, workers' compensation
15.31 	premiums, and federal and state unemployment insurance.  Each
15.32 	provider receiving an adjustment shall report to the
15.33 	commissioner, in the form and manner specified by the
15.34 	commissioner, on how the additional funding was used.

15.35 	Sec. 8. Minnesota Statutes 2004, section 256L.03,
15.36 	subdivision 1, is amended to read:
16.1 		Subdivision 1.Covered health services. For individuals
16.2 	under section 256L.04, subdivision 7, with income no greater
16.3 	than 75 percent of the federal poverty guidelines or for
16.4 	families with children under section 256L.04, subdivision 1, all
16.5 	subdivisions of this section apply."Covered health services"
16.6 	means the health services reimbursed under chapter 256B, with
16.7 	the exception of inpatient hospital services, special education
16.8 	services, private duty nursing services, adult dental care
16.9 	services other than services covered under section 256B.0625,
16.10 	subdivision 9, paragraph (b), orthodontic services, nonemergency
16.11 	medical transportation services, personal care assistant and
16.12 	case management services, nursing home or intermediate care
16.13 	facilities services, inpatient mental health services, and
16.14 	chemical dependency services.  Outpatient mental health services
16.15 	covered under the MinnesotaCare program are limited to
16.16 	diagnostic assessments, psychological testing, explanation of
16.17 	findings, medication management by a physician, day treatment,
16.18 	partial hospitalization, and individual, family, and group
16.19 	psychotherapy.
16.20 	No public funds shall be used for coverage of abortion
16.21 	under MinnesotaCare except where the life of the female would be
16.22 	endangered or substantial and irreversible impairment of a major
16.23 	bodily function would result if the fetus were carried to term;
16.24 	or where the pregnancy is the result of rape or incest.
16.25 	Covered health services shall be expanded as provided in
16.26 	this section.

16.27 	Sec. 9. Minnesota Statutes 2004, section 256L.12,
16.28 	subdivision 6, is amended to read:
16.29 		Subd. 6.Co-payments and benefit limits.  Enrollees are
16.30 	responsible for all co-payments in sections section 256L.03,
16.31 	subdivision 5, and 256L.035,and shall pay co-payments to the
16.32 	managed care plan or to its participating providers.  The
16.33 	enrollee is also responsible for payment of inpatient hospital
16.34 	charges which exceed the MinnesotaCare benefit limit.

16.35 	Sec. 10. Minnesota Statutes 2004, section 256L.15,
16.36 	subdivision 2, as amended by Laws 2005, chapter 10, article 1,
17.1 	section 57, is amended to read:
17.2 		Subd. 2.Sliding fee scale to determine percentage of
17.3 	gross individual or family income. (a) The commissioner shall
17.4 	establish a sliding fee scale to determine the percentage of
17.5 	gross individual or family income that households at different
17.6 	income levels must pay to obtain coverage through the
17.7 	MinnesotaCare program.  The sliding fee scale must be based on
17.8 	the enrollee's gross individual or family income.  The sliding
17.9 	fee scale must contain separate tables based on enrollment of
17.10 	one, two, or three or more persons.  The sliding fee scale
17.11 	begins with a premium of 1.5 2.5 percent of gross individual or
17.12 	family income for individuals or families with incomes below the
17.13 	limits for the medical assistance program for families and
17.14 	children in effect on January 1, 1999, and proceeds through the
17.15 	following evenly spaced steps: 1.8 2.8, 2.3 3.3, 3.1 
17.16 	4.1, 3.8,4.8, 5.8,5.9 6.9, 7.4 8.4, and 8.8 9.8 
17.17 	percent.  These percentages are matched to evenly spaced income
17.18 	steps ranging from the medical assistance income limit for
17.19 	families and children in effect on January 1, 1999, to 275
17.20 	percent of the federal poverty guidelines for the applicable
17.21 	family size, up to a family size of five.  The sliding fee scale
17.22 	for a family of five must be used for families of more than
17.23 	five.  Effective October 1, 2003, the commissioner shall
17.24 	increase each percentage by 0.5 percentage points for enrollees
17.25 	with income greater than 100 percent but not exceeding 200
17.26 	percent of the federal poverty guidelines and shall increase
17.27 	each percentage by 1.0 percentage points for families and
17.28 	children with incomes greater than 200 percent of the federal
17.29 	poverty guidelines.  The sliding fee scale and percentages are
17.30 	not subject to the provisions of chapter 14.  If a family or
17.31 	individual reports increased income after enrollment, premiums
17.32 	shall not be adjusted until eligibility renewal.
17.33 	(b) Children in families whose gross income is above 275
17.34 	percent of the federal poverty guidelines shall pay the maximum
17.35 	premium.  The maximum premium is defined as a base charge for
17.36 	one, two, or three or more enrollees so that if all
18.1 	MinnesotaCare cases paid the maximum premium, the total revenue
18.2 	would equal the total cost of MinnesotaCare medical coverage and
18.3 	administration.  In this calculation, administrative costs shall
18.4 	be assumed to equal ten percent of the total.  The costs of
18.5 	medical coverage for pregnant women and children under age two
18.6 	and the enrollees in these groups shall be excluded from the
18.7 	total.  The maximum premium for two enrollees shall be twice the
18.8 	maximum premium for one, and the maximum premium for three or
18.9 	more enrollees shall be three times the maximum premium for one.

18.10 	Sec. 11. Minnesota Statutes 2004, section 295.52,
18.11 	subdivision 1, is amended to read:
18.12 		Subdivision 1.Hospital tax.  A tax is imposed on each
18.13 	hospital equal to two 1.5 percent of its gross revenues.
18.14 	
EFFECTIVE DATE. This section is effective January 1, 2006.

18.15 	Sec. 12. Minnesota Statutes 2004, section 295.52,
18.16 	subdivision 1a, is amended to read:
18.17 		Subd. 1a.Surgical center tax.  A tax is imposed on each
18.18 	surgical center equal to two 1.5 percent of its gross revenues.
18.19 	
EFFECTIVE DATE. This section is effective January 1, 2006.

18.20 	Sec. 13. Minnesota Statutes 2004, section 295.52,
18.21 	subdivision 2, is amended to read:
18.22 		Subd. 2.Provider tax.  A tax is imposed on each health
18.23 	care provider equal to two 1.5 percent of its gross revenues.
18.24 	
EFFECTIVE DATE. This section is effective January 1, 2006.

18.25 	Sec. 14. Minnesota Statutes 2004, section 295.52,
18.26 	subdivision 3, is amended to read:
18.27 		Subd. 3.Wholesale drug distributor tax.  A tax is
18.28 	imposed on each wholesale drug distributor equal to two 1.5 
18.29 	percent of its gross revenues.
18.30 	
EFFECTIVE DATE. This section is effective January 1, 2006.

18.31 	Sec. 15. Minnesota Statutes 2004, section 325D.32,
18.32 	subdivision 9, is amended to read:
18.33 		Subd. 9.Basic cost of cigarettes.  "Basic cost of
18.34 	cigarettes" means the gross invoice cost of cigarettes to the
18.35 	wholesaler or retailer plus (1) the full face value of any
18.36 	stamps which may be required by any cigarette tax act of this
19.1 	state, unless included by the manufacturer in the list price and
19.2 	(2) the greater of the amount of the published fee under section
19.3 	62J.27, subdivision 6, or the actual per cigarette fee paid by
19.4 	the wholesaler for the fiscal year.
19.5 	
EFFECTIVE DATE. This section is effective September 1,
19.6 	2005.

19.7 	Sec. 16. HEALTH CARE COST CONTAINMENT DEDICATED ACCOUNT.
 19.8 	Revenues collected from the health care cost containment
19.9 	fee in Minnesota Statutes, section 62J.27 shall be placed in a
19.10 	dedicated account to be used for the health care initiatives in
19.11 	this act.

19.12 	Sec. 17. INSTRUCTION TO THE COMMISSIONER OF HUMAN
19.13 	SERVICES.
 19.14 	(a) The commissioner of human services shall reduce
19.15 	professional contracting expenditures by $10,000,000 to achieve
19.16 	a $10,000,000 reduction in general fund expenditures.
19.17 	(b) The commissioner of human services shall reduce general
19.18 	fund expenditures and health care access fund expenditures on
19.19 	managed care delivery of health care services by $40,000,000
19.20 	during the 2006-2007 biennium utilizing greater efficiencies and
19.21 	leveraged buying power.

19.22 	Sec. 18. FUNDS TRANSFER.
 19.23 	On July 1, 2006, the commissioner of finance shall transfer
19.24 	$20,000,000 from the health care access fund to the general
19.25 	fund.  On July 1, 2008, the commissioner of finance shall
19.26 	transfer, without interest, $20,000,000 from the general fund to
19.27 	the health care access fund.

19.28 	Sec. 19. APPROPRIATION; PRESCRIPTION DRUG DISCOUNT
19.29 	PROGRAM.
 19.30 	$....... is appropriated from the general fund to the
19.31 	Minnesota prescription drug dedicated fund for fiscal year 2006.

19.32 	Sec. 20. APPROPRIATION FOR MA SPENDDOWN.
 19.33 	$9,000,000 is appropriated from the general fund to the
19.34 	commissioner of human services for the 2006-2007 biennium to be
19.35 	used to increase the MA spenddown for aged, blind, and disabled
19.36 	persons under Minnesota Statutes, section 256B.056, subdivision
20.1 	5c, paragraph (b).  The commissioner shall increase the
20.2 	spenddown as high as possible within this appropriation.

20.3 	Sec. 21. REPEALER.
 20.4 	Minnesota Statutes 2004, section 256L.035, is repealed.

20.5 	ARTICLE 2
20.6 	OPTION TO PURCHASE STATE HEALTH COVERAGE

20.7 	Section 1. Minnesota Statutes 2004, section 43A.27,
20.8 	subdivision 2, is amended to read:
20.9 		Subd. 2.Elective eligibility.  The following persons, if
20.10 	not otherwise covered by section 43A.24, may elect coverage for
20.11 	themselves or their dependents at their own expense:
20.12 	(a) a state employee, including persons on layoff from a
20.13 	civil service position as provided in collective bargaining
20.14 	agreements or a plan established pursuant to section 43A.18;
20.15 	(b) an employee of the Board of Regents of the University
20.16 	of Minnesota, including persons on layoff, as provided in
20.17 	collective bargaining agreements or by the Board of Regents;
20.18 	(c) an officer or employee of the State Agricultural
20.19 	Society, State Horticultural Society, Sibley House Association,
20.20 	Minnesota Humanities Commission, Minnesota Area Industry Labor
20.21 	Management Councils, Minnesota International Center, Minnesota
20.22 	Academy of Science, Science Museum of Minnesota, Minnesota
20.23 	Safety Council, state Office of Disabled American Veterans,
20.24 	state Office of the American Legion and its auxiliary, state
20.25 	Office of Veterans of Foreign Wars and its auxiliary, or state
20.26 	Office of the Military Order of the Purple Heart;
20.27 	(d) a civilian employee of the adjutant general who is paid
20.28 	from federal funds and who is not eligible for benefits from any
20.29 	federal civilian employee group life insurance or health
20.30 	benefits program; and 
20.31 	(e) an officer or employee of the State Capitol Credit
20.32 	Union or the Highway Credit Union; and 
20.33 	(f) a resident of the state of Minnesota who meets the
20.34 	residency requirements provided by Code of Federal Regulations,
20.35 	title 42, section 435.403, and who has not been medically
20.36 	treated within three years of application for one or more of the
21.1 	presumptive conditions sufficient for enrollment in the
21.2 	Minnesota Comprehensive Health Association, as listed in the
21.3 	operating rule adopted by the association under the authority of
21.4 	Minnesota Rules, parts 2740.2700, subpart 4, and 2740.3600,
21.5 	subpart 2, item B, except that persons electing coverage under
21.6 	this clause are eligible only for hospital, medical, and dental
21.7 	benefits.
21.8 	
EFFECTIVE DATE. This section is effective January 1, 2006.

21.9 	Sec. 2. Minnesota Statutes 2004, section 43A.27, is
21.10 	amended by adding a subdivision to read:
21.11 		Subd. 7.Small employer. (a) A small employer may elect
21.12 	to purchase hospital, medical, and dental coverage for its
21.13 	employees and dependents if:
21.14 	(1) the employer and employee elect to enroll at their own
21.15 	expense, in the manner and under the conditions of eligibility
21.16 	the commissioner prescribes and otherwise approves;
21.17 	(2) the small employer has at least 75 percent of its
21.18 	eligible employees who have not waived coverage participating
21.19 	and contributes at least 50 percent towards the cost of coverage
21.20 	of each eligible employee; and 
21.21 	(3) the small employer is located in Minnesota.
21.22 	(b) For purposes of this subdivision, "small employer" has
21.23 	the meaning given in section 62L.02, subdivision 26.
21.24 	
EFFECTIVE DATE. This section is effective January 1, 2006.

21.25 	Sec. 3. [43A.275] COORDINATION WITH PRIVATE INSURANCE
21.26 	POLICIES.
21.27 		Subdivision 1.State administered coverage
21.28 	secondary. Plans of hospital, medical, and dental coverage
21.29 	provided to persons eligible under section 43A.27, subdivision
21.30 	2, clause (f); or 7, are secondary to any available private
21.31 	sector health coverage.
21.32 		Subd. 2.Subrogation. (a) Upon providing hospital,
21.33 	medical, or dental benefits to any person eligible under section
21.34 	43A.27, subdivision 2, clause (f); or 7, who has private
21.35 	hospital, medical, or dental coverage, or receives or has a
21.36 	right to receive hospital, medical, or dental care from any type
22.1 	of organization or entity, or has a cause of action arising out
22.2 	of an occurrence that necessitated the provision of hospital,
22.3 	medical, or dental benefits, the state agency or the state
22.4 	agency's agent shall be subrogated, to the extent of the cost of
22.5 	hospital, medical, or dental care provided, to any rights the
22.6 	person may have under the terms of the coverage, or against the
22.7 	organization or entity providing or liable to provide hospital,
22.8 	medical, or dental care, or under the cause of action.
22.9 	(b) The right of subrogation created in this subdivision
22.10 	includes all portions of the cause of action, notwithstanding
22.11 	any settlement allocation or apportionment that purports to
22.12 	dispose of portions of the cause of action not subject to
22.13 	subrogation.
22.14 	
EFFECTIVE DATE. This section is effective January 1, 2006.

22.15 	Sec. 4. Minnesota Statutes 2004, section 256L.02, is
22.16 	amended by adding a subdivision to read:
22.17 		Subd. 5.Minnesotacare coverage as secondary.
 22.18 	MinnesotaCare coverage for persons eligible under section
22.19 	256L.04, subdivisions 14, 15, and 16, is secondary to any
22.20 	available private sector health coverage.
22.21 	
EFFECTIVE DATE. This section is effective January 1, 2006.

22.22 	Sec. 5. Minnesota Statutes 2004, section 256L.04,
22.23 	subdivision 1, is amended to read:
22.24 		Subdivision 1.Families with children.  (a) Families with
22.25 	children with family income equal to or less than 275 percent of
22.26 	the federal poverty guidelines for the applicable family size
22.27 	shall be eligible for MinnesotaCare according to this section.
22.28 	All other provisions of sections 256L.01 to 256L.18, including
22.29 	the insurance-related barriers to enrollment under section
22.30 	256L.07, shall apply unless otherwise specified.
22.31 	(b) Parents who enroll in the MinnesotaCare program must
22.32 	also enroll their children, if the children are eligible.
22.33 	Children may be enrolled separately without enrollment by
22.34 	parents.  However, if one parent in the household enrolls, both
22.35 	parents must enroll, unless other insurance is available.  If
22.36 	one child from a family is enrolled, all children must be
23.1 	enrolled, unless other insurance is available.  If one spouse in
23.2 	a household enrolls, the other spouse in the household must also
23.3 	enroll, unless other insurance is available.  Families cannot
23.4 	choose to enroll only certain uninsured members.
23.5 	(c) Beginning October 1, 2003, the dependent sibling
23.6 	definition no longer applies to the MinnesotaCare program.
23.7 	These persons are no longer counted in the parental household
23.8 	and may apply as a separate household.
23.9 	(d) Beginning July 1, 2003, or upon federal approval,
23.10 	whichever is later, parents are not eligible for MinnesotaCare
23.11 	if their gross income exceeds $50,000. Parents eligible under
23.12 	subdivision 14 are not subject to this paragraph.
23.13 	
EFFECTIVE DATE. This section is effective January 1, 2006.

23.14 	Sec. 6. Minnesota Statutes 2004, section 256L.04,
23.15 	subdivision 7a, is amended to read:
23.16 		Subd. 7a.Ineligibility.  Applicants whose income is
23.17 	greater than the limits established under this section may not
23.18 	enroll in the MinnesotaCare program, except as provided in
23.19 	subdivisions 14, 15, and 16.
23.20 	
EFFECTIVE DATE. This section is effective January 1, 2006.

23.21 	Sec. 7. Minnesota Statutes 2004, section 256L.04, is
23.22 	amended by adding a subdivision to read:
23.23 		Subd. 14.Other families with children. Families with
23.24 	children with family incomes greater than 275 percent of the
23.25 	federal poverty guidelines for the applicable family size, or
23.26 	who are not otherwise eligible under subdivision 1, are eligible
23.27 	for MinnesotaCare coverage under, and subject to all other
23.28 	requirements of, section 256L.03 as if they were eligible under
23.29 	subdivision 1, if they pay the full-cost premium.  A family
23.30 	member who has been medically treated within three years of
23.31 	application for one or more of the presumptive conditions
23.32 	sufficient for enrollment in the Minnesota Comprehensive Health
23.33 	Association, as listed in the operating rule adopted by the
23.34 	association under the authority of Minnesota Rules, parts
23.35 	2740.2700, subpart 4, and 2740.3600, subpart 2, item B, is not
23.36 	eligible under this subdivision.
24.1 	
EFFECTIVE DATE. This section is effective January 1, 2006.

24.2 	Sec. 8. Minnesota Statutes 2004, section 256L.04, is
24.3 	amended by adding a subdivision to read:
24.4 		Subd. 15.Other single adults and households with no
24.5 	children. (a) Single adults and households with no children
24.6 	with household incomes greater than 175 percent of the federal
24.7 	poverty guidelines for the applicable household size, or who are
24.8 	not otherwise eligible under subdivision 7, are eligible for
24.9 	MinnesotaCare coverage under, and subject to all other
24.10 	requirements of, section 256L.03 as if they were eligible under
24.11 	subdivision 7, if they pay the full-cost premium.
24.12 	(b) Single adults and households with no children with
24.13 	household incomes greater than 75 percent of the federal poverty
24.14 	guidelines for the applicable household size who are eligible
24.15 	for limited benefit coverage under section 256L.035 may elect
24.16 	coverage under paragraph (a), but must pay the full-cost premium.
24.17 	(c) An individual who has been medically treated within
24.18 	three years of application for one or more of the presumptive
24.19 	conditions sufficient for enrollment in the Minnesota
24.20 	Comprehensive Health Association, as listed in the operating
24.21 	rule adopted by the association under the authority of Minnesota
24.22 	Rules, parts 2740.2700, subpart 4, and 2740.3600, subpart 2,
24.23 	item B, is not eligible under this subdivision.
24.24 	
EFFECTIVE DATE. This section is effective January 1, 2006.

24.25 	Sec. 9. Minnesota Statutes 2004, section 256L.04, is
24.26 	amended by adding a subdivision to read:
24.27 		Subd. 16.Employees and dependents of small
24.28 	employers. (a) Employees and dependents of small employers are
24.29 	eligible for MinnesotaCare coverage under, and subject to all
24.30 	other requirements of, section 256L.03 as if they were eligible
24.31 	under subdivisions 1 or 7, whichever is applicable, if:
24.32 	(1) the small employer and employee pay the full-cost
24.33 	premium;
24.34 	(2) the small employer has at least 75 percent of its
24.35 	eligible employees who have not waived coverage participating
24.36 	and contributes at least 50 percent towards the cost of coverage
25.1 	of each eligible employee; and 
25.2 	(3) the small employer is located in Minnesota.
25.3 	(b) For purposes of this subdivision, "small employer" has
25.4 	the meaning given in section 62L.02, subdivision 26.
25.5 	
EFFECTIVE DATE. This section is effective January 1, 2006.

25.6 	Sec. 10. Minnesota Statutes 2004, section 256L.05,
25.7 	subdivision 1, is amended to read:
25.8 		Subdivision 1.Application and information
25.9 	availability. (a) Applications and other information must be
25.10 	made available to provider offices, local human services
25.11 	agencies, school districts, public and private elementary
25.12 	schools in which 25 percent or more of the students receive free
25.13 	or reduced price lunches, community health offices, and Women,
25.14 	Infants and Children (WIC) program sites.  These sites may
25.15 	accept applications and forward the forms to the commissioner.
25.16 	Otherwise, applicants may apply directly to the commissioner.
25.17 	Beginning January 1, 2000, MinnesotaCare enrollment sites will
25.18 	be expanded to include local county human services agencies
25.19 	which choose to participate.
25.20 	(b) The commissioner shall make applications and other
25.21 	information available to small employers and organizations
25.22 	representing small employers, and shall work with these entities
25.23 	to publicize the availability of small employer coverage under
25.24 	section 256L.04, subdivision 16.
25.25 	
EFFECTIVE DATE. This section is effective January 1, 2006.

25.26 	Sec. 11. Minnesota Statutes 2004, section 256L.05,
25.27 	subdivision 3a, is amended to read:
25.28 		Subd. 3a.Renewal of eligibility.  (a) Beginning January
25.29 	1, 1999, an enrollee's eligibility must be renewed every 12
25.30 	months.  The 12-month period begins in the month after the month
25.31 	the application is approved.
25.32 	(b) Beginning October 1, 2004, an enrollee's eligibility
25.33 	must be renewed every six months, except that enrollees eligible
25.34 	under section 256L.04, subdivisions 14, 15, and 16, must renew
25.35 	eligibility every 12 months.  The first six-month period of
25.36 	eligibility begins in the month after the month the application
26.1 	is approved.  Each new period of eligibility must take into
26.2 	account any changes in circumstances that impact eligibility and
26.3 	premium amount.  An enrollee must provide all the information
26.4 	needed to redetermine eligibility by the first day of the month
26.5 	that ends the eligibility period.  The premium for the new
26.6 	period of eligibility must be received as provided in section
26.7 	256L.06 in order for eligibility to continue.
26.8 	
EFFECTIVE DATE. This section is effective January 1, 2006.

26.9 	Sec. 12. Minnesota Statutes 2004, section 256L.07, as
26.10 	amended by Laws 2005, chapter 59, section 1, is amended to read:
26.11 	256L.07 [ELIGIBILITY FOR MINNESOTACARE.]
26.12 		Subdivision 1.General requirements. (a) Children
26.13 	enrolled in the original children's health plan as of September
26.14 	30, 1992, children who enrolled in the MinnesotaCare program
26.15 	after September 30, 1992, pursuant to Laws 1992, chapter 549,
26.16 	article 4, section 17, and children who have family gross
26.17 	incomes that are equal to or less than 150 percent of the
26.18 	federal poverty guidelines are eligible without meeting the
26.19 	requirements of subdivision 2 and the four-month requirement in
26.20 	subdivision 3, as long as they maintain continuous coverage in
26.21 	the MinnesotaCare program or medical assistance.  Children who
26.22 	apply for MinnesotaCare on or after the implementation date of
26.23 	the employer-subsidized health coverage program as described in
26.24 	Laws 1998, chapter 407, article 5, section 45, who have family
26.25 	gross incomes that are equal to or less than 150 percent of the
26.26 	federal poverty guidelines, must meet the requirements of
26.27 	subdivision 2 to be eligible for MinnesotaCare.
26.28 	(b) Families enrolled in MinnesotaCare under section
26.29 	256L.04, subdivision 1, whose income increases above 275 percent
26.30 	of the federal poverty guidelines, are no longer eligible for
26.31 	the program and shall be disenrolled by the commissioner.
26.32 	Individuals enrolled in MinnesotaCare under section 256L.04,
26.33 	subdivision 7, whose income increases above 175 percent of the
26.34 	federal poverty guidelines are no longer eligible for the
26.35 	program and shall be disenrolled by the commissioner.  For
26.36 	persons disenrolled under this subdivision, MinnesotaCare
27.1 	coverage terminates the last day of the calendar month following
27.2 	the month in which the commissioner determines that the income
27.3 	of a family or individual exceeds program income limits.
27.4 	(c)(1) Notwithstanding paragraph (b), families enrolled in
27.5 	MinnesotaCare under section 256L.04, subdivision 1, may remain
27.6 	enrolled in MinnesotaCare if ten percent of their annual income
27.7 	is less than the annual premium for a policy with a $500
27.8 	deductible available through the Minnesota Comprehensive Health
27.9 	Association.  Families who are no longer eligible for
27.10 	MinnesotaCare under this subdivision shall be given an 18-month
27.11 	notice period from the date that ineligibility is determined
27.12 	before disenrollment.  This clause expires February 1, 2004.
27.13 	(2) Effective February 1, 2004, notwithstanding paragraph
27.14 	(b), children may remain enrolled in MinnesotaCare if ten
27.15 	percent of their annual family income is less than the annual
27.16 	premium for a policy with a $500 deductible available through
27.17 	the Minnesota Comprehensive Health Association.  Children who
27.18 	are no longer eligible for MinnesotaCare under this clause shall
27.19 	be given a 12-month notice period from the date that
27.20 	ineligibility is determined before disenrollment.  The premium
27.21 	for children remaining eligible under this clause shall be the
27.22 	maximum premium determined under section 256L.15, subdivision 2,
27.23 	paragraph (b).
27.24 	(d) Effective July 1, 2003, notwithstanding paragraphs (b)
27.25 	and (c), parents eligible under section 256L.04, subdivision 1,
27.26 	are no longer eligible for MinnesotaCare if gross household
27.27 	income exceeds $50,000.
27.28 		Subd. 2.Must not have access to employer-subsidized
27.29 	coverage. (a) To be eligible, a family or individual must not
27.30 	have access to subsidized health coverage through an employer
27.31 	and must not have had access to employer-subsidized coverage
27.32 	through a current employer for 18 months prior to application or
27.33 	reapplication.  A family or individual whose employer-subsidized
27.34 	coverage is lost due to an employer terminating health care
27.35 	coverage as an employee benefit during the previous 18 months is
27.36 	not eligible.
28.1 	(b) This subdivision does not apply to a family or
28.2 	individual who was enrolled in MinnesotaCare within six months
28.3 	or less of reapplication and who no longer has
28.4 	employer-subsidized coverage due to the employer terminating
28.5 	health care coverage as an employee benefit. This subdivision
28.6 	does not apply to persons eligible under section 256L.04,
28.7 	subdivisions 14, 15, and 16.
28.8 	(c) For purposes of this requirement, subsidized health
28.9 	coverage means health coverage for which the employer pays at
28.10 	least 50 percent of the cost of coverage for the employee or
28.11 	dependent, or a higher percentage as specified by the
28.12 	commissioner.  Children are eligible for employer-subsidized
28.13 	coverage through either parent, including the noncustodial
28.14 	parent.  The commissioner must treat employer contributions to
28.15 	Internal Revenue Code Section 125 plans and any other employer
28.16 	benefits intended to pay health care costs as qualified employer
28.17 	subsidies toward the cost of health coverage for employees for
28.18 	purposes of this subdivision.
28.19 		Subd. 3.Other health coverage. (a) Families and
28.20 	individuals enrolled in the MinnesotaCare program must have no
28.21 	health coverage while enrolled or for at least four months prior
28.22 	to application and renewal.  Children enrolled in the original
28.23 	children's health plan and children in families with income
28.24 	equal to or less than 150 percent of the federal poverty
28.25 	guidelines, who have other health insurance, are eligible if the
28.26 	coverage:
28.27 	(1) lacks two or more of the following:
28.28 	(i) basic hospital insurance;
28.29 	(ii) medical-surgical insurance;
28.30 	(iii) prescription drug coverage;
28.31 	(iv) dental coverage; or
28.32 	(v) vision coverage;
28.33 	(2) requires a deductible of $100 or more per person per
28.34 	year; or
28.35 	(3) lacks coverage because the child has exceeded the
28.36 	maximum coverage for a particular diagnosis or the policy
29.1 	excludes a particular diagnosis.
29.2 	The commissioner may change this eligibility criterion for
29.3 	sliding scale premiums in order to remain within the limits of
29.4 	available appropriations.  The requirement of no health coverage
29.5 	does not apply to newborns.
29.6 	(b) Medical assistance, general assistance medical care,
29.7 	and the Civilian Health and Medical Program of the Uniformed
29.8 	Service, CHAMPUS, or other coverage provided under United States
29.9 	Code, title 10, subtitle A, part II, chapter 55, are not
29.10 	considered insurance or health coverage for purposes of the
29.11 	four-month requirement described in this subdivision.
29.12 	(c) For purposes of this subdivision, Medicare Part A or B
29.13 	coverage under title XVIII of the Social Security Act, United
29.14 	States Code, title 42, sections 1395c to 1395w-4, is considered
29.15 	health coverage.  An applicant or enrollee may not refuse
29.16 	Medicare coverage to establish eligibility for MinnesotaCare.
29.17 	(d) Applicants who were recipients of medical assistance or
29.18 	general assistance medical care within one month of application
29.19 	must meet the provisions of this subdivision and subdivision 2.
29.20 	(e) Effective October 1, 2003, applicants who were
29.21 	recipients of medical assistance and had cost-effective health
29.22 	insurance which was paid for by medical assistance are exempt
29.23 	from the four-month requirement under this section.
29.24 	(f) This subdivision does not apply to persons eligible
29.25 	under section 256L.04, subdivisions 14, 15, and 16.
29.26 		Subd. 4.Families with children in need of chemical
29.27 	dependency treatment. Premiums for families with children when
29.28 	a parent has been determined to be in need of chemical
29.29 	dependency treatment pursuant to an assessment conducted by the
29.30 	county under section 626.556, subdivision 10, or a case plan
29.31 	under section 260C.201, subdivision 6, or 260C.212, who are
29.32 	eligible for MinnesotaCare under section 256L.04, subdivision 1,
29.33 	may be paid by the county of residence of the person in need of
29.34 	treatment for one year from the date the family is determined to
29.35 	be eligible or if the family is currently enrolled in
29.36 	MinnesotaCare from the date the person is determined to be in
30.1 	need of chemical dependency treatment.  Upon renewal, the family
30.2 	is responsible for any premiums owed under section 256L.15.  If
30.3 	the family is not currently enrolled in MinnesotaCare, the local
30.4 	county human services agency shall determine whether the family
30.5 	appears to meet the eligibility requirements and shall assist
30.6 	the family in applying for the MinnesotaCare program.
30.7 		Subd. 5.Voluntary disenrollment for members of
30.8 	military. Notwithstanding section 256L.05, subdivision 3b,
30.9 	MinnesotaCare enrollees who are members of the military and
30.10 	their families, who choose to voluntarily disenroll from the
30.11 	program when one or more family members are called to active
30.12 	duty, may reenroll during or following that member's tour of
30.13 	active duty.  Those individuals and families shall be considered
30.14 	to have good cause for voluntary termination under section
30.15 	256L.06, subdivision 3, paragraph (d).  Income and asset
30.16 	increases reported at the time of reenrollment shall be
30.17 	disregarded.  All provisions of sections 256L.01 to 256L.18
30.18 	shall apply to individuals and families enrolled under this
30.19 	subdivision upon six-month renewal.
30.20 	
EFFECTIVE DATE. This section is effective January 1, 2006.

30.21 	Sec. 13. Minnesota Statutes 2004, section 256L.09, is
30.22 	amended by adding a subdivision to read:
30.23 		Subd. 8.Exemption from residency requirement for
30.24 	employees of small employers. Persons eligible under section
30.25 	256L.04, subdivision 16, are exempt from this section.
30.26 	
EFFECTIVE DATE. This section is effective January 1, 2006.

30.27 	Sec. 14. Minnesota Statutes 2004, section 256L.15,
30.28 	subdivision 3, is amended to read:
30.29 		Subd. 3.Exceptions to sliding scale.  An annual premium
30.30 	of $48 is required for all children in families eligible under
30.31 	section 256L.04, subdivision 1,with income at or less than 150
30.32 	percent of federal poverty guidelines.
30.33 	
EFFECTIVE DATE. This section is effective January 1, 2006.

30.34 	Sec. 15. Minnesota Statutes 2004, section 256L.15, is
30.35 	amended by adding a subdivision to read:
30.36 		Subd. 4.Payment of full-cost premium; administrative
31.1 	costs. (a) Enrollees eligible under section 256L.04,
31.2 	subdivisions 14, 15, and 16, shall pay the full-cost premium.
31.3 	The full-cost premium for families and children is defined as
31.4 	the projected medical payments for all enrollees eligible under
31.5 	section 256L.04, subdivisions 1 and 14, and all enrollees who
31.6 	are families and children eligible under section 256L.04,
31.7 	subdivision 16, divided by the projected monthly average
31.8 	households enrolled for these groups.  The full-cost premium for
31.9 	single adults and households without children is defined as the
31.10 	projected medical payments for all enrollees eligible under
31.11 	section 256L.04, subdivision 7, receiving covered services under
31.12 	section 256L.03; all enrollees eligible under section 256L.04,
31.13 	subdivision 15; and all enrollees who are single adults or
31.14 	households without children eligible under section 256L.04,
31.15 	subdivision 16, divided by the projected monthly average
31.16 	households enrolled for these groups.
31.17 	(b) The commissioner may increase the full-cost premium
31.18 	calculated under paragraph (a) to cover any administrative costs
31.19 	incurred by the Department of Human Services in expanding
31.20 	MinnesotaCare eligibility to include persons eligible under
31.21 	section 256L.04, subdivisions 14, 15, and 16.
31.22 	
EFFECTIVE DATE. This section is effective January 1, 2006.

31.23 	Sec. 16. Minnesota Statutes 2004, section 256L.17,
31.24 	subdivision 5, is amended to read:
31.25 		Subd. 5.Exemption.  This section does not apply to
31.26 	pregnant women.  For purposes of this subdivision, a woman is
31.27 	considered pregnant for 60 days postpartum. This section does
31.28 	not apply to persons eligible under section 256L.04,
31.29 	subdivisions 14, 15, and 16.
31.30 	
EFFECTIVE DATE. This section is effective January 1, 2006.

31.31 	ARTICLE 3
31.32 	MEDICAL ASSISTANCE AND ALTERNATIVE CARE

31.33 	Section 1. Minnesota Statutes 2004, section 256B.15,
31.34 	subdivision 1, is amended to read:
31.35 		Subdivision 1.policy, applicability, purpose, and
31.36 	construction;definition. (a) It is the policy of this state
32.1 	that individuals or couples, either or both of whom participate
32.2 	in the medical assistance program, use their own assets to pay
32.3 	their share of the total cost of their care during or after
32.4 	their enrollment in the program according to applicable federal
32.5 	law and the laws of this state.  The following provisions apply:
32.6 	(1) subdivisions 1c to 1k shall not apply to claims arising
32.7 	under this section which are presented under section 525.313;
32.8 	(2) the provisions of subdivisions 1c to 1k expanding the
32.9 	interests included in an estate for purposes of recovery under
32.10 	this section give effect to the provisions of United States
32.11 	Code, title 42, section 1396p, governing recoveries, but do not
32.12 	give rise to any express or implied liens in favor of any other
32.13 	parties not named in these provisions;
32.14 	(3) the continuation of a recipient's life estate or joint
32.15 	tenancy interest in real property after the recipient's death
32.16 	for the purpose of recovering medical assistance under this
32.17 	section modifies common law principles holding that these
32.18 	interests terminate on the death of the holder;
32.19 	(4) all laws, rules, and regulations governing or involved
32.20 	with a recovery of medical assistance shall be liberally
32.21 	construed to accomplish their intended purposes;
32.22 	(5) a deceased recipient's life estate and joint tenancy
32.23 	interests continued under this section shall be owned by the
32.24 	remaindermen or surviving joint tenants as their interests may
32.25 	appear on the date of the recipient's death.  They shall not be
32.26 	merged into the remainder interest or the interests of the
32.27 	surviving joint tenants by reason of ownership.  They shall be
32.28 	subject to the provisions of this section.  Any conveyance,
32.29 	transfer, sale, assignment, or encumbrance by a remainderman, a
32.30 	surviving joint tenant, or their heirs, successors, and assigns
32.31 	shall be deemed to include all of their interest in the deceased
32.32 	recipient's life estate or joint tenancy interest continued
32.33 	under this section; and 
32.34 	(6) the provisions of subdivisions 1c to 1k continuing a
32.35 	recipient's joint tenancy interests in real property after the
32.36 	recipient's death do not apply to a homestead owned of record,
33.1 	on the date the recipient dies, by the recipient and the
33.2 	recipient's spouse as joint tenants with a right of
33.3 	survivorship.  Homestead means the real property occupied by the
33.4 	surviving joint tenant spouse as their sole residence on the
33.5 	date the recipient dies and classified and taxed to the
33.6 	recipient and surviving joint tenant spouse as homestead
33.7 	property for property tax purposes in the calendar year in which
33.8 	the recipient dies.  For purposes of this exemption, real
33.9 	property the recipient and their surviving joint tenant spouse
33.10 	purchase solely with the proceeds from the sale of their prior
33.11 	homestead, own of record as joint tenants, and qualify as
33.12 	homestead property under section 273.124 in the calendar year in
33.13 	which the recipient dies and prior to the recipient's death
33.14 	shall be deemed to be real property classified and taxed to the
33.15 	recipient and their surviving joint tenant spouse as homestead
33.16 	property in the calendar year in which the recipient dies.  The
33.17 	surviving spouse, or any person with personal knowledge of the
33.18 	facts, may provide an affidavit describing the homestead
33.19 	property affected by this clause and stating facts showing
33.20 	compliance with this clause.  The affidavit shall be prima facie
33.21 	evidence of the facts it states.
33.22 	(b) For purposes of this section, "medical assistance"
33.23 	includes the medical assistance program under this chapter and
33.24 	the general assistance medical care program under chapter 256D
33.25 	and but does not include the alternative care program for
33.26 	nonmedical assistance recipients under section 256B.0913.
33.27 	
EFFECTIVE DATE. This section is effective retroactive
33.28 	from July 1, 2003.

33.29 	Sec. 2. Minnesota Statutes 2004, section 256B.15,
33.30 	subdivision 1a, is amended to read:
33.31 		Subd. 1a.Estates subject to claims.  If a person
33.32 	receives any medical assistance hereunder, on the person's
33.33 	death, if single, or on the death of the survivor of a married
33.34 	couple, either or both of whom received medical assistance, or
33.35 	as otherwise provided for in this section,the total amount paid
33.36 	for medical assistance rendered for the person and spouse shall
34.1 	be filed as a claim against the estate of the person or the
34.2 	estate of the surviving spouse in the court having jurisdiction
34.3 	to probate the estate or to issue a decree of descent according
34.4 	to sections 525.31 to 525.313.
34.5 	A claim shall be filed if medical assistance was rendered
34.6 	for either or both persons under one of the following
34.7 	circumstances:
34.8 	(a) the person was over 55 years of age, and received
34.9 	services under this chapter, excluding alternative care;
34.10 	(b) the person resided in a medical institution for six
34.11 	months or longer, received services under this chapter,
34.12 	excluding alternative care, and, at the time of
34.13 	institutionalization or application for medical assistance,
34.14 	whichever is later, the person could not have reasonably been
34.15 	expected to be discharged and returned home, as certified in
34.16 	writing by the person's treating physician.  For purposes of
34.17 	this section only, a "medical institution" means a skilled
34.18 	nursing facility, intermediate care facility, intermediate care
34.19 	facility for persons with mental retardation, nursing facility,
34.20 	or inpatient hospital; or
34.21 	(c) the person received general assistance medical care
34.22 	services under chapter 256D.
34.23 	The claim shall be considered an expense of the last
34.24 	illness of the decedent for the purpose of section 524.3-805.
34.25 	Any statute of limitations that purports to limit any county
34.26 	agency or the state agency, or both, to recover for medical
34.27 	assistance granted hereunder shall not apply to any claim made
34.28 	hereunder for reimbursement for any medical assistance granted
34.29 	hereunder.  Notice of the claim shall be given to all heirs and
34.30 	devisees of the decedent whose identity can be ascertained with
34.31 	reasonable diligence.  The notice must include procedures and
34.32 	instructions for making an application for a hardship waiver
34.33 	under subdivision 5; time frames for submitting an application
34.34 	and determination; and information regarding appeal rights and
34.35 	procedures.  Counties are entitled to one-half of the nonfederal
34.36 	share of medical assistance collections from estates that are
35.1 	directly attributable to county effort. Counties are entitled
35.2 	to ten percent of the collections for alternative care directly
35.3 	attributable to county effort.
35.4 	
EFFECTIVE DATE. This section is effective retroactive
35.5 	from July 1, 2003.

35.6 	Sec. 3. Minnesota Statutes 2004, section 256B.15,
35.7 	subdivision 2, is amended to read:
35.8 		Subd. 2.Limitations on claims.  The claim shall include
35.9 	only the total amount of medical assistance rendered after age
35.10 	55 or during a period of institutionalization described in
35.11 	subdivision 1a, clause (b), and the total amount of general
35.12 	assistance medical care rendered, and shall not include
35.13 	interest.  Claims that have been allowed but not paid shall bear
35.14 	interest according to section 524.3-806, paragraph (d).  A claim
35.15 	against the estate of a surviving spouse who did not receive
35.16 	medical assistance, for medical assistance rendered for the
35.17 	predeceased spouse, is limited to the value of the assets of the
35.18 	estate that were marital property or jointly owned property at
35.19 	any time during the marriage. Claims for alternative care shall
35.20 	be net of all premiums paid under section 256B.0913, subdivision
35.21 	12, on or after July 1, 2003, and shall be limited to services
35.22 	provided on or after July 1, 2003.
35.23 	
EFFECTIVE DATE. This section is effective retroactive
35.24 	from July 1, 2003.

35.25 	Sec. 4. Minnesota Statutes 2004, section 256B.15,
35.26 	subdivision 3, is amended to read:
35.27 		Subd. 3.surviving spouse,minor, blind, or disabled
35.28 	children.  If a decedent is survived by a spouse, or who was
35.29 	single or who was the surviving spouse of a married couple and 
35.30 	is survived by a child who is under age 21 or blind or
35.31 	permanently and totally disabled according to the supplemental
35.32 	security income program criteria, a no claim shall be filed
35.33 	against the estate according to this section.
35.34 	
EFFECTIVE DATE. This section is effective retroactive
35.35 	from July 1, 2003.

35.36 	Sec. 5. Minnesota Statutes 2004, section 256B.15,
36.1 	subdivision 4, is amended to read:
36.2 		Subd. 4.Other survivors.  If the decedent who was single
36.3 	or the surviving spouse of a married couple is survived by one
36.4 	of the following persons, a claim exists against the estate in
36.5 	an amount not to exceed the value of the nonhomestead property
36.6 	included in the estate and the personal representative shall
36.7 	make, execute, and deliver to the county agency a lien against
36.8 	the homestead property in the estate for any unpaid balance of
36.9 	the claim to the claimant as provided under this section:
36.10 	(a) a sibling who resided in the decedent medical
36.11 	assistance recipient's home at least one year before the
36.12 	decedent's institutionalization and continuously since the date
36.13 	of institutionalization; or
36.14 	(b) a son or daughter or a grandchild who resided in the
36.15 	decedent medical assistance recipient's home for at least two
36.16 	years immediately before the parent's or grandparent's
36.17 	institutionalization and continuously since the date of
36.18 	institutionalization, and who establishes by a preponderance of
36.19 	the evidence having provided care to the parent or grandparent
36.20 	who received medical assistance, that the care was provided
36.21 	before institutionalization, and that the care permitted the
36.22 	parent or grandparent to reside at home rather than in an
36.23 	institution.
36.24 	
EFFECTIVE DATE. This section is effective retroactive
36.25 	from July 1, 2003.

36.26 	Sec. 6. Minnesota Statutes 2004, section 514.981,
36.27 	subdivision 6, is amended to read:
36.28 		Subd. 6.Time limits; claim limits; liens on life estates
36.29 	and joint tenancies.  (a) A medical assistance lien is a lien on
36.30 	the real property it describes for a period of ten years from
36.31 	the date it attaches according to section 514.981, subdivision
36.32 	2, paragraph (a), except as otherwise provided for in sections
36.33 	514.980 to 514.985.  The agency may renew a medical assistance
36.34 	lien for an additional ten years from the date it would
36.35 	otherwise expire by recording or filing a certificate of renewal
36.36 	before the lien expires.  The certificate shall be recorded or
37.1 	filed in the office of the county recorder or registrar of
37.2 	titles for the county in which the lien is recorded or filed.
37.3 	The certificate must refer to the recording or filing data for
37.4 	the medical assistance lien it renews.  The certificate need not
37.5 	be attested, certified, or acknowledged as a condition for
37.6 	recording or filing.  The registrar of titles or the recorder
37.7 	shall file, record, index, and return the certificate of renewal
37.8 	in the same manner as provided for medical assistance liens in
37.9 	section 514.982, subdivision 2.
37.10 	(b) A medical assistance lien is not enforceable against
37.11 	the real property of an estate to the extent there is a
37.12 	determination by a court of competent jurisdiction, or by an
37.13 	officer of the court designated for that purpose, that there are
37.14 	insufficient assets in the estate to satisfy the agency's
37.15 	medical assistance lien in whole or in part because of the
37.16 	homestead exemption under section 256B.15, subdivision 4, the
37.17 	rights of the surviving spouse or minor children under section
37.18 	524.2-403, paragraphs (a) and (b), or claims with a priority
37.19 	under section 524.3-805, paragraph (a), clauses (1) to (4).  For
37.20 	purposes of this section, the rights of the decedent's adult
37.21 	children to exempt property under section 524.2-403, paragraph
37.22 	(b), shall not be considered costs of administration under
37.23 	section 524.3-805, paragraph (a), clause (1).
37.24 	(c) Notwithstanding any law or rule to the contrary, the
37.25 	provisions in clauses (1) to (7) apply if a life estate subject
37.26 	to a medical assistance lien ends according to its terms, or if
37.27 	a medical assistance recipient who owns a life estate or any
37.28 	interest in real property as a joint tenant that is subject to a
37.29 	medical assistance lien dies.
37.30 	(1) The medical assistance recipient's life estate or joint
37.31 	tenancy interest in the real property shall not end upon the
37.32 	recipient's death but shall merge into the remainder interest or
37.33 	other interest in real property the medical assistance recipient
37.34 	owned in joint tenancy with others.  The medical assistance lien
37.35 	shall attach to and run with the remainder or other interest in
37.36 	the real property to the extent of the medical assistance
38.1 	recipient's interest in the property at the time of the
38.2 	recipient's death as determined under this section.
38.3 	(2) If the medical assistance recipient's interest was a
38.4 	life estate in real property, the lien shall be a lien against
38.5 	the portion of the remainder equal to the percentage factor for
38.6 	the life estate of a person the medical assistance recipient's
38.7 	age on the date the life estate ended according to its terms or
38.8 	the date of the medical assistance recipient's death as listed
38.9 	in the Life Estate Mortality Table in the health care program's
38.10 	manual.
38.11 	(3) If the medical assistance recipient owned the interest
38.12 	in real property in joint tenancy with others, the lien shall be
38.13 	a lien against the portion of that interest equal to the
38.14 	fractional interest the medical assistance recipient would have
38.15 	owned in the jointly owned interest had the medical assistance
38.16 	recipient and the other owners held title to that interest as
38.17 	tenants in common on the date the medical assistance recipient
38.18 	died.
38.19 	(4) The medical assistance lien shall remain a lien against
38.20 	the remainder or other jointly owned interest for the length of
38.21 	time and be renewable as provided in paragraph (a).
38.22 	(5) Subdivision 5, paragraph (a), clause (4), paragraph
38.23 	(b), clauses (1) and (2); and subdivision 6, paragraph (b), do
38.24 	not apply to medical assistance liens which attach to interests
38.25 	in real property as provided under this subdivision.
38.26 	(6) The continuation of a medical assistance recipient's
38.27 	life estate or joint tenancy interest in real property after the
38.28 	medical assistance recipient's death for the purpose of
38.29 	recovering medical assistance provided for in sections 514.980
38.30 	to 514.985 modifies common law principles holding that these
38.31 	interests terminate on the death of the holder.
38.32 	(7) Notwithstanding any law or rule to the contrary, no
38.33 	release, satisfaction, discharge, or affidavit under section
38.34 	256B.15 shall extinguish or terminate the life estate or joint
38.35 	tenancy interest of a medical assistance recipient subject to a
38.36 	lien under sections 514.980 to 514.985 on the date the recipient
39.1 	dies.
39.2 	(8) The provisions of clauses (1) to (7) do not apply to a
39.3 	homestead owned of record, on the date the recipient dies, by
39.4 	the recipient and the recipient's spouse as joint tenants with a
39.5 	right of survivorship.  Homestead means the real property
39.6 	occupied by the surviving joint tenant spouse as their sole
39.7 	residence on the date the recipient dies and classified and
39.8 	taxed to the recipient and surviving joint tenant spouse as
39.9 	homestead property for property tax purposes in the calendar
39.10 	year in which the recipient dies.  For purposes of this
39.11 	exemption, real property the recipient and their surviving joint
39.12 	tenant spouse purchase solely with the proceeds from the sale of
39.13 	their prior homestead, own of record as joint tenants, and
39.14 	qualify as homestead property under section 273.124 in the
39.15 	calendar year in which the recipient dies and prior to the
39.16 	recipient's death shall be deemed to be real property classified
39.17 	and taxed to the recipient and their surviving joint tenant
39.18 	spouse as homestead property in the calendar year in which the
39.19 	recipient dies.  The surviving spouse, or any person with
39.20 	personal knowledge of the facts, may provide an affidavit
39.21 	describing the homestead property affected by this clause and
39.22 	stating facts showing compliance with this clause.  The
39.23 	affidavit shall be prima facie evidence of the facts it states.
39.24 	
EFFECTIVE DATE. This section is effective retroactive
39.25 	from July 1, 2003, and applies to medical assistance liens
39.26 	recorded or filed on or after that date.

39.27 	Sec. 7. Minnesota Statutes 2004, section 524.3-805, is
39.28 	amended to read:
39.29 	524.3-805 CLASSIFICATION OF CLAIMS.
39.30 	(a) If the applicable assets of the estate are insufficient
39.31 	to pay all claims in full, the personal representative shall
39.32 	make payment in the following order:
39.33 	(1) costs and expenses of administration;
39.34 	(2) reasonable funeral expenses;
39.35 	(3) debts and taxes with preference under federal law;
39.36 	(4) reasonable and necessary medical, hospital, or nursing
40.1 	home expenses of the last illness of the decedent, including
40.2 	compensation of persons attending the decedent, a claim filed
40.3 	under section 256B.15 for recovery of expenditures for
40.4 	alternative care for nonmedical assistance recipients under
40.5 	section 256B.0913,and including a claim filed pursuant to
40.6 	section 256B.15;
40.7 	(5) reasonable and necessary medical, hospital, and nursing
40.8 	home expenses for the care of the decedent during the year
40.9 	immediately preceding death;
40.10 	(6) debts with preference under other laws of this state,
40.11 	and state taxes;
40.12 	(7) all other claims.
40.13 	(b) No preference shall be given in the payment of any
40.14 	claim over any other claim of the same class, and a claim due
40.15 	and payable shall not be entitled to a preference over claims
40.16 	not due, except that if claims for expenses of the last illness
40.17 	involve only claims filed under section 256B.15 for recovery of
40.18 	expenditures for alternative care for nonmedical assistance
40.19 	recipients under section 256B.0913, section 246.53 for costs of
40.20 	state hospital care and claims filed under section 256B.15,
40.21 	claims filed to recover expenditures for alternative care for
40.22 	nonmedical assistance recipients under section 256B.0913 shall
40.23 	have preference over claims filed under both sections 246.53 and
40.24 	other claims filed under section 256B.15, and .Claims filed
40.25 	under section 246.53 have preference over claims filed under
40.26 	section 256B.15for recovery of amounts other than those for
40.27 	expenditures for alternative care for nonmedical assistance
40.28 	recipients under section 256B.0913.

40.29 	EFFECTIVE DATE. This section is effective retroactive
40.30 	from July 1, 2003.

40.31 	Sec. 8. APPROPRIATION.
 40.32 	$....... is appropriated from the general fund to the
40.33 	commissioner of human services for the fiscal year beginning
40.34 	July 1, 2005, for the purposes of sections 1 to 7 and 9.

40.35 	Sec. 9. REPEALER.
 40.36 	(a) Minnesota Statutes 2004, section 256B.15, subdivisions
41.1 	1c, 1d, 1e, 1f, 1g, 1h, 1i, 1j, and 1k, are repealed
41.2 	retroactively from July 1, 2003.
41.3 	(b) Minnesota Statutes 2004, sections 514.991; 514.992;
41.4 	514.993; 514.994; and 514.995, are repealed retroactively from
41.5 	July 1, 2003.