Medical Assistance

2.1.1.2.3 Cost Sharing

Cost sharing includes those costs a Medical Assistance (MA) enrollee pays towards their health care. MA enrollees do not have deductibles, copays or co-insurance. However, some MA enrollees have premiums, spenddowns, waiver obligations or parental fees.

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 an approach that allows MA eligibility for certain people whose income exceeds the MA income limit, but who have medical expenses that are equal to the amount of their excess income. 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

Effective July 1, 2023 parents are no longer assessed a parental fee for children enrolled in MA under the TEFRA option or for children receiving home and community-based services (HCBS) waivers. Parents are still responsible for parental fees assessed for children under the TEFRA option and for children receiving HCBS waivers before June 30, 2023.

Parental fees may still be assessed for children who have a developmental disability, or a physical disability or emotional disturbance in 24-hour care outside the home. This includes a:

medical facility such as a nursing home or an intermediate care facility for a person with a developmental disability,
state-operated psychiatric hospital for children, or
psychiatric residential treatment facility

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. .

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 using the County Parental Fee Referral form (DHS-2982) to assess a parental fee for children placed in in 24-hour care outside the home. 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 435.225

Minnesota Statutes, section 252.27 (as amended by 2023 MN Laws, chapter 61, article 3, section 1)

Minnesota Statutes, section 256B.14

Minnesota Statutes, section 256B.057

Minnesota Statutes, section 256B.063

Minnesota Statutes, section 256B.0631