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the federal poverty level. 404 Since Minnesota’s SCHIP is a Medicaid expansion, the benefits arethe same as the Medicaid benefits listed above, and SCHIP funds are used to raise the eligibilitylevels for children above that of the Medicaid program. 405Private Insurance RegulationMinnesota has a 26.7 percent HMO penetration rate. Regarding small-group market reforms(applies to groups of 2-50), Minnesota does not apply community rating, limits pre-existingcondition exclusions (to 12 months exclusion and 6 months look-back time), and mandatesguaranteed issue and guaranteed renewability. Regarding individual insurance market reforms,Minnesota does not apply community rating, limits pre-existing condition exclusions, andmandates guaranteed issue and guaranteed renewability. Minnesota has a high-risk poolfunded by premiums, assessments on insurers, and state appropriations. 406 It currently hasabout 30,000 enrollees. 407 The state mandates that patients have access to an external reviewboard for filing complaints against their health plans, and mandates mental health parity ofbenefits. Minnesota has a state COBRA expansion program to 18 months for small firms. 408Incentives for Small GroupsIn 2001 the Minnesota legislature passed an initiative to form a reinsurance fund for businesseswith 10 for fewer employees that would cover 90 percent of claims from $30,000 to $100,000. 409As of October 2004 it was considered inactive. 410Medicaid and SCHIP InitiativesIn Minnesota, 63.9 percent of Medicaid beneficiaries are enrolled in managed care, ascompared to 60.2 for the U.S. as a whole. Minnesota has a family planning waiver that extendsfamily planning services to men and women up to 200 percent FPL. 411 Minnesota has usedSection 1931 to expand Medicaid coverage by increasing income disregards; the state maydisregard a family’s first $120 in monthly earnings and one-third of the remaining monthlyearnings before calculating if families’ incomes are below the eligibility level to qualify forMedicaid. 412 Minnesota has received one 1915(b) Freedom of Choice Waiver (for chemicaldependency treatment) and five 1915(c) Home and Community-Based Services Waivers. Thestate has received three 1115 waivers: the family planning waiver, a waiver for managed care(called Minnesota Prepaid Medical Assistance Project Plus), and a waiver for MinnesotaCare. 413MinnesotaCare is a managed care program administered by the Minnesota Department ofHuman Services that expands eligibility for parents and relative caretakers of Medicaid andSCHIP-eligible children, and other selected groups of people. It includes a Medicaid 1115Waiver to extend eligibility to parents and children under age 19 up to 275 percent FPL, and aSCHIP 1115 Waiver covering parents with incomes 100-200 percent FPL. 414 Childless adultscan qualify if their gross household incomes are less than 175 percent FPL and they meet otherguidelines, as can children and pregnant women up to 275 percent FPL without access to otherinsurance. 415There are three levels of benefits in MinnesotaCare. Pregnant women and children have themost benefits and do not pay copayments, and parents and childless adults with incomes lessthan 75 percent FPL can receive most services but have limits and copayments. Childlessadults with incomes 75-175 percent FPL receive fewer benefits, must pay copayments, andhave a $10,000 annual limit on inpatient services and a $5,000 annual limit on all otherservices. 416 MinnesotaCare is funded through federal funds, sliding-scale premiums andcopayments, a 2 percent provider tax, and a 1 percent premium tax on health maintenanceC-32