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2005 Testimony

Testimony Before The Senate Appropriations Committee

SB 2185 - Buy-in of medical assistance

January 31, 2005

Chairman Holmberg, members of the committee, I am David Zentner, Director of Medical Services for the Department of Human Services. I appear before you to provide information and support this bill.

This proposed legislation would make permanent the Workers with Disabilities coverage within the North Dakota Medicaid program. It also clarifies certain provisions contained in the original bill.

During the previous session the Legislature authorized the Department to implement the Workers with Disabilities program. The program became operational in July 2005. Since that date a total of 284 individuals have been eligible under this coverage group. It allows individuals with a disability to buy into the Medicaid program by paying a premium based on the income of each individual. Eligibility is limited to those disabled with net family income at or below 225% of the federal poverty level. The bill was passed in order to encourage individuals with disabilities to seek work, or increase their work time without fear of losing Medicaid benefits.

Rather than incur a recipient liability, each eligible individual who is gainfully employed pays a premium based on 5% of his or her monthly gross income. Previously these individuals may have been eligible for the Medicaid program; but would have had a recipient liability that far exceeded the premium they are currently paying. The medically needy income level for a household of one is $500. The income level at 225% of poverty is $1,745 for a household of one.

The bill removes the sunset clause that is contained in Section 1 lines 6 and 7, and changes the name of the program from Medical Assistance Buy-In Program for Disabled to “Workers with Disabilities Coverage”.

Line 14 is changed to indicate that net income is used when determining eligibility for this coverage group. It is a federal requirement that net income be used for this coverage group.

Lines 17 through 19 are changed to clarify that this coverage group can have an additional $10,000 in assets. The current language requires that the additional assets must be earned while the individual is enrolled in the Medicaid program, and must be included in an approved plan to achieve self-support. This provision is difficult to administer, because of the requirements that the asset must come from earned income, and must include a plan. Many individuals have both earned and unearned income. We believe that simplifying the process will accomplish the goal of providing an incentive for individuals to save money for their future needs, without the oversight required in the present language.

Line 22 clarifies that the premium is based on gross countable income. The premium is currently based on 5% of gross income. This calculation allows considerable relief for those individuals that previously incurred a recipient liability, while not overburdening the clients with a high premium. Many individuals have been able to retain hundreds of dollars per month that had previously been used to pay for medical care.

On page 2, line 2, the bill removes the word “consecutive”. The Department is concerned that individuals could manipulate the system by not paying for two months, then paying for a month, and then begin the cycle over again. We believe that the premiums are reasonable, and that non-payment in any three months should result in termination from the coverage group.

The fiscal note totals about $1.3 million of which about $461,000 is general funds. This amount has been included in the Executive budget in House Bill 1012, the Department’s appropriation bill.

I would be happy to respond to any questions you may have.

 

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