Healthcare Business News

Rules would let states hike Medicaid cost-sharing

By Rich Daly
Posted: January 14, 2013 - 1:45 pm ET

The CMS issued proposed operational rules Monday (PDF) for health insurance exchanges and Medicaid programs, which included an increase in allowable beneficiary cost-sharing in the latter.

Notably, the rule would change Medicaid premiums and cost-sharing requirements to allow states to establish higher cost-sharing for nonpreferred drugs, and to impose higher cost-sharing for nonemergency use of emergency departments.

Specifically, the rule would allow states to change their Medicaid programs without a waiver to require an $8 cost share for non-emergency ED use for Medicaid enrollees with incomes of 100% to 150% of the federal poverty level. States would have no limit on the cost-sharing they could impose on emergency department use for non-emergencies by Medicaid enrollees with incomes over 150% of the federal poverty level.

The expanded Medicaid cost-sharing was intended to “promote more effective use of services,” Cindy Mann, director of the Center for Medicaid at CMS, said in a call with reporters.

“Today, we are proposing a rule to provide Americans with access to affordable, high quality health coverage and give states more flexibility to implement the law in a way that works for them,” HHS Secretary Kathleen Sebelius said in a news release.

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The proposed rule would modify existing “benchmark” regulations for Medicaid programs to implement the expanded Medicaid eligibility required by the Patient Protection and Affordable Care Act. The law required all Medicaid programs to accept—beginning in 2014—any beneficiary with incomes of up 133% of the federal poverty level, with a flexibility of up to 138% of the federal poverty level.

The rule laid out the process for appealing eligibility determinations in Medicaid and for the health insurance exchanges that will begin accepting enrollees in October and begin offering coverage in January.

States that operate their own federally approved exchanges could implement their own appeals processes, according to the proposed rule, although applicants would retain the right to appeal those decisions to a federal process.

The rule also would implement “streamlining” of Medicaid eligibility categories for 2014. These changes include aligning citizenship documentation processes across Medicaid, CHIP and exchange.

The rule also details the process for health insurance exchanges to verify whether an applicant has access to employer-provided insurance that meets federal affordability and minimum value standards. Applicants' whose employers provide qualifying coverage are ineligible for federal insurance subsidies in an exchange. The rule offered state-run exchanges the option of relying on HHS to make this determination.

The rule also proposed certification standards for “application counselors,” who will assist applicants in obtaining coverage through either an exchange or other federally funded healthcare programs.

The CMS will accept comments on the proposed rule through Feb. 13.

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