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Medical Assistance

2.1.1.2.3 Cost Sharing (Archive)

Cost sharing includes those costs a Medical Assistance (MA) enrollee pays towards their health care. MA cost sharing includes deductibles, medical visit and prescription copays. Some enrollees also have premiums, spenddowns, waiver obligations or parental fees.

Deductibles and Copays

Adults age 21 or older have:

  • A monthly deductible

  • Copays for non-preventative visits

  • Copays for nonemergency emergency room (ER) visits

  • Copays for prescription drugs

Excluded from Deductibles or Copay

  • Pregnant people,
  • American Indians,
  • Alaska Natives,
  • people under age 21,
  • people in hospice care,
  • people enrolled in MA for people with breast or cervical cancer,
  • Refugee MA enrollees,
  • people in long-term care facilities 

Monthly copays and deductibles are limited to 5 percent of family income.

See Summary of Coverage, Cost Sharing and Limits (DHS-3860) for more information.

Premiums

Premiums are a bill enrollees pay monthly for their health care. MA for Employed Persons with Disabilities (MA-EPD) enrollees have a monthly premium. See EPM section 2.3.5.1.2 MA-EPD Premiums policy for more information.

Spenddowns

A spenddown is a cost-sharing approach that allows MA eligibility for people whose income exceeds financial eligibility requirements. Federal rules refer to this population as "medically needy." MA enrollees can become income eligible for MA by “spending down” their excess income to the appropriate income limit. The excess income is reduced by deducting certain medical expenses.

There are two types of spenddowns.

Medical Spenddown

Medical Spenddowns are for enrollees that live in the community. Not all MA bases of eligibility offer MA with a medical spenddown. See EPM section 2.2.3.6 MA-FCA Medical Spenddown policy and section 2.3.3.4 MA-ABD Medical Spenddowns policy for more information.

Long-Term Care Spenddown

Some enrollees eligible for the payment of long-term care services may be obligated to contribute toward the cost of services. The amount of income that a person is obligated to contribute to the cost of LTC services is based on basis of eligibility and household composition.

Not all MA bases of eligibility require enrollees contribute toward the cost of long-term care facility services (nursing facility). See EPM section 2.4 MA for Long-Term Care Services chapter for more information.

Parental Fees

Parents may be liable for a fee to reimburse part of their children's costs if their income is not considered in determining MA eligibility for their disabled children. Parental fees apply to children under the age of 18 receiving MA through the TEFRA option, children receiving home and community based waiver services, children placed in a Regional Treatment Center, when MA pays the cost of care, and children in 24-hour out-of-home placement. See EPM section  2.3.6 MA under the TEFRA Option subchapter and section  2.4.2.3.1 MA-LTC Home and Community-Based Services Waivers for People with Disabilities  for more information.

County, tribal or state servicing agencies may assess parental fees when a child lives apart from both parents or when a child has a non-custodial parent.

Parents are not responsible for a parental fee in any of the following circumstances:

  • Parental rights have been terminated.

  • The child on MA is an emancipated minor.

  • The child receives state or Title IV-E adoption assistance.

The Minnesota Department of Human Services (DHS) collects parental fees. The child’s, county, tribal or state servicing agency must make a referral to the DHS parental fee unit. The county, tribal or state servicing agency sends the Important Notice and Parental Fee Worksheet (DHS-2977) to parents.

Parental Fee Amount

DHS uses the birth and adoptive parent's adjusted gross income (AGI) as reported on the previous year's federal tax return to compute parental fees.

Parents can estimate the amount of the parental fee using the worksheet and information on DHS-2977.

Once a parental fee has been assessed, parents will receive a determination order that indicates what the parental fee is for the fiscal year and the amount of monthly payments.

Parental fees are reassessed each fiscal year due to annual changes in the FPG or changes in AGI or family size. Parents must tell DHS when there is a change in household size, the child leaves the home, other health insurance coverage starts or stops, or there is change in monthly income in excess of 10%. The parents can send a letter to:

Department of Human Services

Financial Operations Division

PO Box 64171

St. Paul, MN 55164-0171

Undue Hardship

Parents may send a letter to DHS to request a change to the parental fee when they incur any of the following expenses, not reimbursed by any public or private sector:

  • Payments for medical expenses not covered by MA or health insurance, but that would be allowable as a federal tax deduction under the Internal Revenue Code.

  • Expenditures for adaptations to the parents’ vehicle that are necessary to accommodate the child’s medical needs and are a type that would be allowable as a federal tax deduction under the Internal Revenue Code.

  • Expenditures for physical adaptations to the child’s home that are necessary to accommodate the child’s physical, behavioral, or sensory needs and are a type that would be allowable as a federal tax deduction under the Internal Revenue Code.

  • Unexpected, sudden or unusual expenditures by the parents since the last renewal or within the past 12 months that are not reimbursed by any type of insurance or civil action and which are a type allowable as a casualty loss deduction under the Internal Revenue Code.

  • When a peculiar tax status creates a gross disparity between the amount of income allocated to them and the amount of the cash distributions made to them.

Non-Cooperation with Parental Fee Requirements

A child’s MA coverage is not closed when a parent does not cooperate with parental fee requirements. Action may be taken against the parent in either of the following circumstances:

  • Refusal to submit the necessary information to DHS in determining a fee can result in a bill for the full reimbursement cost of MA services.

  • Failure to pay the parental fee can result in the account being turned over to a collection agency, garnishment of wages, or taking the parent’s state tax refund

Waiver Obligations

A waiver obligation is the amount a person is obligated to contribute toward the cost of home and community based waiver services. People age 65 and older, receiving Elderly Waiver (EW) services, with income above the Special Income Standard Elderly Waiver (SIS-EW) maintenance needs allowance pay a waiver obligation. The waiver obligation is based on actual income and deductions in a given month. See EPM section 2.4.2.3.2 MA-LTC Home and Community-Based Services Waiver for People Age 65 or Older subsection for more information.

Legal Citations

Code of Federal Regulations, title 42, section 447.55

Minnesota Statutes, section 256B.057

Minnesota Statutes, section 256B.063

Minnesota Statutes, section 256B.0631

Published: December 1, 2022

Archived: May 24, 2024