The Centers for Medicare & Medicaid Services is proposing new rules that would give states flexibility in designing their own Medicaid programs, with the hopes of aligning the federal-state programs with private market insurance.
The rules, announced late Thursday, would give states wider latitude for offering benefits and designing cost-sharing arrangements.
In making the announcement, CMS said it was implementing provisions of the Deficit Reduction Act of 2005 and the Tax Relief and Health Care Act of 2006.
CMS also released proposed regulations on DRA provisions that allow states to change current premiums and cost-sharing structures. The new provisions are similar to what is allowed under SCHIP and will not change existing cost-sharing rules for Medicaid beneficiaries with family income below the federal poverty level. Individuals with family incomes of 100 percent to 150 percent of the poverty level may see some cost sharing, while monthly premiums can be charged to individuals with incomes greater than 150 percent of the poverty level.
"These new rules recognize that states are in the best position to design plans that provide Medicaid beneficiaries with better healthcare for the same or even lower cost," said Health and Human Services Secretary Mike Leavitt.
Through alternative benefit packages called "benchmark plans," states will have the ability to offer Medicaid recipients healthcare plans that have the same value as plans that are being offered to other populations.
CMS said these benchmark plans are models that states can use in designing new programs and are similar to the flexibility that had been given to states under the State Children's Health Insurance Programs.
Benchmark coverage includes the standard Blue Cross/Blue Shield preferred provider option service benefit plan under the Federal Employees Health Benefit Plan; state employee coverage; coverage that is offered by the largest commercial HMO organization in the state; or coverage that the HHS secretary approves.
For individuals who can't afford 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, enabling employees to maintain private coverage.