Issues in Developing Programs for Uninsured Children: A Resource Book for States. Minnesotacareminnesotacare



MinnesotaCare began in 1993 as part of a package of legislation aimed at reducing the number of uninsured in the state of Minnesota. With the advent of the MinnesotaCare demonstration project, all MinnesotaCare enrollees were transitioned to mandatory managed care. Phase I of the demonstration extended Medicaid coverage to families with children under 275% FPL with no insurance coverage. Under the demonstration, children and pregnant women receive all benefits available to traditional Medicaid enrollees. In May 1997, a bill was approved to expand MinnesotaCare eligibility to adults without children with income from 135% FPL to 175% FPL. The legislation also reduced provider taxes and added nonpreventive dental coverage for adults in families below 175% FPL.


MinnesotaCare is available to families with children who have income of less than 275% FPL, and individuals who have incomes of less than 175% FPL. To become eligible for MinnesotaCare, one must have been uninsured for at least four months or have had no access to employer-subsidized coverage for 18 months or more. An asset test will be implemented when the amended demonstration waiver is approved by HCFA(now known as CMS). Under the asset test, families cannot have more than $30,000 in assets, and individuals cannot have more than $15,000 in assets to be eligible for the plan.


The program offers a comprehensive benefit package including inpatient hospital benefits. However, inpatient benefits are capped at $10,000 annually for adults without children and for parents with incomes greater than 175% FPL.


Enrollees have the opportunity to choose a health plan upon enrollment into the program. Provider reimbursement was originally structured on a fee-for-service basis but now is a capitated payment system.


MinnesotaCare was originally funded through a cigarette tax, a provider tax, and family contributions. The cigarette tax is no longer used for MinnesotaCare support; it was only applied from July 1992 through January 1994. In July 1995, the state 1115 demonstration waiver was implemented, and the federal match was added to the funding mix. In 1997 a reduction was made in the provider taxes due to a surplus in MinnesotaCare funds.