CMS Proposes Rule Changes That Would Give States 'Unprecedented Flexibility' In Designing Medicaid Programs

Main Category: Medicare / Medicaid / SCHIP
Article Date: 23 Feb 2008 - 0:00 PDT

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CMS on Thursday announced two proposed rule changes that the agency said would grant states "unprecedented flexibility" in designing Medicaid programs and would require increased cost-sharing for beneficiaries, CQ HealthBeat reports. The proposed rules, which would implement provisions of a 2006 budget reconciliation bill (PL 109-171) and a 2006 package to extend tax provisions (PL 109-432), are part of new efforts to implement the Bush administration's "goals of aligning Medicaid more closely with private market insurance and giving states more control over their Medicaid benefits packages," according to CMS.

The rule changes would allow states to offer alternative benefit packages called "benchmark" plans, which would provide Medicaid beneficiaries with health coverage that has the same value as plans offered to other individuals in the same state. Benchmarks would include the standard PPO plan offered to federal government employees, state employee coverage offered by the largest HMO or coverage approved by HHS. States would have the choice of offering additional benefits such as dental coverage. States also would be able to contribute to a beneficiary's employer-sponsored health plan premiums so that the individual could remain insured through the private sector.

The proposed rule changes also would allow states to revise existing premium and cost-sharing plans to make them more similar to those allowed under SCHIP, according to CQ HealthBeat. The rule change would not affect beneficiaries with incomes below 100% of the federal poverty level, but cost sharing could increase for beneficiaries with incomes between 100% and 150% of the poverty level, and beneficiaries with incomes greater than 150% of the poverty level could be required to contribute copayments. Under the proposed change, all cost sharing would be limited to no more than 5% of a family's income.

HHS Secretary Mike Leavitt said, "The proposed rules will result in patients having more choices and greater control over their health care decisions." The proposed changes are expected to be published on Friday in the Federal Register and will have a 30-day public comment period (Carey, CQ HealthBeat, 2/21).

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