Saint Paul – Following requests by Governor Tim Pawlenty and his administration, the U.S. Department of Health and Human Services has granted the state a waiver that will ensure 18,000 parents remain eligible for MinnesotaCare health insurance. The agreement means that Minnesota will receive more than $100 million a year in federal funding through June 2011.

“Our administration has been negotiating with the federal government to ensure that funding was preserved for this program,” Governor Pawlenty said. “I appreciate the help of our state Congressional delegation to obtain this waiver.”

In August, the federal Centers for Medicare and Medicaid Services (CMS) changed its agreement with the state that would have resulted in a loss of over $135 million in federal MinnesotaCare funding for three years. Governor Pawlenty met with HHS Secretary Mike Leavitt in September and worked with Minnesota’s Congressional delegation to overturn that decision. The agreement reached with CMS avoids any loss of coverage and the related loss of federal funding.

With the waiver, which runs through June 30, 2011, health insurance for parents with incomes between 100 and 200 percent of poverty will be funded with federal Medicaid funds rather than with federal State Children’s Health Insurance Program (SCHIP) funds. In exchange, the state will access SCHIP funding for some MinnesotaCare children under age 19.

MinnesotaCare is a publicly subsidized program for Minnesotans who do not have access to affordable health care coverage. Approximately 118,000 people were enrolled in the program during state fiscal year 2007.

Under other terms of the agreement, the state secured approval for federal matching funds for five years worth of nursing home pay increases that are already in place and will receive a higher amount of funding for graduate medical education than CMS originally proposed.