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Date: April 27, 1995
FOR IMMEDIATE RELEASE 
Contact:  HCFA Press Office (202) 690-6145

Minnesota Health Care Demonstrations Approved

HHS Secretary Donna E. Shalala today announced approval for two health care demonstration projects in Minnesota. The demonstrations are part of the state's efforts to reform its health care systems by consolidating programs and expanding coverage through Medicaid managed care.

In one project, Medicaid eligibility will be extended to cover children up to age 19 whose family incomes are below 275 percent of the federal poverty level. It will operate in 14 counties.

The other project, operating in eight counties, will integrate coverage of acute and long-term care for the elderly.

"Minnesota has a long history of leadership in creating social programs that work better for all the state's people," Secretary Shalala said. "This administration supports state innovation making our public programs work well and serving those who need our help."

Since January 1993, HHS has approved eight statewide health care reform demonstration projects, and 25 other health care demonstrations that were not statewide. The administration has also approved welfare reform demonstrations in 27 states.

The demonstrations approved today are part of the plan to create a MinnesotaCare Health Plan by July 1, 1997, as mandated in 1992 by state health care reform legislation. The new plan would integrate the state's low-income and uninsured health programs and expand the managed care delivery system.

The first project will extend Minnesota's existing Medicaid demonstration program, the Prepaid Medical Assistance Program (PMAP), which currently operates in eight counties, into six additional counties and enroll children in managed care.

The project contains disincentives (or "insurance barriers") aimed at encouraging employers and individuals to continue private insurance coverage for children who will now be eligible for the new program. The new PMAP Medicaid coverage is intended for low-income children without private insurance, who are currently covered under a separate Minnesota program. Some 68,000 children are expected to receive coverage over the life of the waiver.

The demonstration will also extend coverage to include dental services and children's mental health services in managed care.

The demonstration represents a first phase in streamlining publicly funded health care programs in the state. HCFA will work with Minnesota to develop the second phase of its demonstration proposal.

In addition, Minnesota's "Long Term Care Options Project," a five-year demonstration beginning next Jan. 1, will provide integrated services to approximately 4,000 elderly in the seven-county Minneapolis/St. Paul metro area and in St. Louis County.

Minnesota will offer a comprehensive benefit package to elderly beneficiaries who are eligible for both Medicaid and Medicare in the project's area. The benefit package will include coverage for both long-term care and acute care services in a single package combining Medicare benefits with the current benefits under the PMAP program. Services will be delivered through pre-paid managed care entities that contract with the state.

Bruce C. Vladeck, administrator of the Health Care Financing Administration, said that "through the expansion of PMAP and the Long-Term Care Options Project, Minnesota is moving toward its goal of providing integrated health care coverage to its most vulnerable citizens."

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