Medicaid expansion mandates, options presented at joint hearing


A custom-designed state health care program currently under construction and expected to roll out Jan. 1, 2014, will include some “must-haves” in order to comply with the federal Patient Protection and Affordable Care Act.

Scott Leitz, assistant commissioner for health care at the Department of Human Services, walked the House and Senate health finance and policy committees through necessary changes under the new federal health care law, plus some of the options they might consider for expanded coverage. Leitz focused his presentation primarily on Medical Assistance, which is the state’s Medicaid program that covers about 768,000 low-income people, including more than 100,000 senior citizens.

Currently, pay stubs supplied by applicants are used to verify income. Beginning Jan. 1, 2014, Medicaid will rely on household information on IRS tax returns when determining eligibility and tax credits for premiums, called the Modified Adjusted Gross Income. Pregnant women and infants, children, parents and adults who earn up to 133 percent of the federal poverty level (about $15,000 for an individual) could be affected by the new method.

The state must be prepared to accept Medicaid applications online, by mail, over the telephone or in person and offer electronic data verification. Current electronic systems are antiquated and there are few programmers who can work on the systems, so Minnesota must invest in updated technology, Leitz said.

Medicaid eligibility will be reviewed once a year, instead of the current six-month policy.

The MinnesotaCare Federal Waiver will disappear. MinnesotaCare is a program that typically insures working individuals who can’t afford private health insurance but who don’t qualify for other public programs. It is administered by the Department of Human Services. Without a waiver, the estimated 127,000 MinnesotaCare enrollees will need to transfer into another insurance plan. Most enrollees are expected to shop for new insurance coverage through a competitive marketplace known as a health care exchange.

Beyond mandated coverage for certain categories of individuals, states also have options. They may choose to expand Medicaid benefits to those earning above the federal poverty level, which for an individual is about $11,000 per year. Minnesota has already adopted some of the early expansion options. One loophole that needs closing is a waiting period between coverage programs that currently leaves some people uninsured for a four-month period.

The customized choices legislators make could save the state more than $1 billion between 2011 and 2015, according to Leitz. That’s because the federal government is temporarily picking up more of the cost for the next two years.

Another option may be to adopt an additional Basic Health Plan which would allow recouping of 95 percent of the state costs for enrollees between 133 percent and 200 percent of the federal poverty level, but the federal government has yet to provide details on building a plan.

DFLers generally support the new federal health care law and polls show Minnesotans support the state designing its own health care reform, rather than leaving it to the federal government, according to Rep. Thomas Huntley (DFL-Duluth), the House Health and Human Services Finance Committee chairman.

“This is the federal law. We have to deal with it. I’m absolutely convinced that we can do a better job here in Minnesota obeying the federal law, but doing it our way,” Huntley said.

Some House Republicans expressed concern.

“What can we as a Legislature expect from the department and from the governor in terms of having Minnesota be a state that continues to lead and not follow in terms of health care reform,” asked Rep. Matt Dean (R-Dellwood).