WASHINGTON – The Centers for Medicare & Medicaid Services last week issued a final regulation that gives states “unprecedented flexibility” in designing their own Medicaid programs, the agency said, allowing them to model benefits on other existing plans.
The rule implements provisions of the Deficit Reduction Act of 2005 and is the latest in a series of regulations that aim to align Medicaid more closely with private insurance and give states more control over their Medicaid benefits packages, the agency said in a news release.
Many of the regulations, however, are under a congressional moratorium, the agency warned.
Nevertheless, CMS Acting Administrator Kerry Weems focused on the benefits of the new rule, which he said “recognizes that states are in the best position to design plans that provide Medicaid beneficiaries better health care for the same or even lower cost.”
“With this flexibility, beneficiaries will have more choices and greater control over their health care decisions,” he added.
The new regulation allows states to reshape their Medicaid coverage to match “benchmark plans” offered in the public and private sectors, in a similar way to what was already allowed under the State Children’s Health Insurance Program (SCHIP).
Allowed “benchmark” plans include:
CMS noted that the benchmark options would allow states to target benefits to meet the specific needs of individuals, and in some cases would be more generous than the existing state Medicaid plan. The rule also will make it easier to provide integrated coverage for acute care and community-based long-term care for the disabled, CMS said.
For individuals who cannot afford the premiums associated with health insurance offered through their employer, states have the option of paying part of the employee premium to make it more affordable – as the RIte Share program does in Rhode Island – so the employee can maintain private coverage. These proposed rules also give states the flexibility to provide wrap-around and additional benefits, such as dental coverage, CMS said.
“Until passage of the Deficit Reduction Act of 2005, states had few options, other than through waivers, to update the health benefit packages offered through their Medicaid programs to meet the needs of the people they serve,” Weems said. “These changes allow states to use modern methods of providing health insurance coverage and encourage families to participate in their own health care decisions.”
CMS also published a final rule that gives states the flexibility to change current premiums and cost-sharing requirements. Individuals with family income below 100 percent of the federal poverty level can be charged only “nominal” cost-sharing and premiums, but higher out-of-pocket charges are allowed for people with higher incomes. As in SCHIP, all cost sharing must be limited to no more than 5 percent of the family’s income. The 2008 federal poverty line for a family of four is $21,200.
Both final rules are available on the Federal Register Web site at www.archives.gov/federal-register/.
