(a) An applicant for or recipient of assistance under this chapter is considered to have assigned to the state, through the department and the child support services agency, all rights to accrued and continuing medical support that the applicant and other persons for whom assistance is sought may have from all sources. The assignment takes effect upon a determination that the applicant is eligible for assistance under this chapter. Except with respect to the amount of any unpaid medical support obligation accrued under the assignment, the assignment under this section terminates when the applicant ceases to receive assistance under this chapter.

(b) Through the child support services agency or on its own behalf, the department may garnish the wages, salary, or other employment income of a person who

(1) is required by a medical support order, cash medical support order, or both, under AS 25.27.060(c) to provide insurance or cash coverage of the costs of medical care to a child who is eligible for medical assistance under this chapter;

(2) has received payment from a third party for the costs of the services; and

(3) has not used the payments to reimburse, as appropriate, the other parent or custodian of the child, the provider of the services, or the department.

(c) Garnishment under (b) of this section is limited to the amount necessary to reimburse the department for expenditures for the child under this chapter. Claims for current support or support arrearages take priority over claims under this section.