Feds plan to let states impose co-payments on Medicaid patients above poverty level to encourage them to expand the program

By Molly Burchett and Al Cross
Kentucky Health News

If Kentucky expands its Medicaid program, it will probably be able to reduce the cost by requiring patients whose incomes are above the federal poverty level to help pay for their care. That could make it more feasible for the state to expand the program to people with incomes up to 138 percent of the poverty line.

A proposed federal policy will let states charge co-payments and
increased premiums for doctor visits and some prescription drugs and hospital
care. Robert Pear of The New York Times reports that the policy is designed to encourage states to expand Medicaid under the federal health-care reform law, with generous federal help. By shifting costs to patients, the state and federal governments would pay less.

That adds a new perspective to the cost consideration in Kentucky’s debate over expansion of Medicaid. It could influence the state’s decision, Republican state Sen. Julie Denton of Louisville said Friday during a legislative panel at the Kentucky Press Association convention.

Denton cautioned that the state needs to fix its problems with Medicaid managed care before it expands the program. Democratic Gov. Steve Beshear has said he wants to expand Medicaid if the state can afford it, and since there is
no deadline for deciding whether to participate in the expansion, the debate may carry over into 2014.

Some Republicans have said Kentucky can’t afford the expansion. If the state expands Medicaid eligibility to 138 percent of poverty from its current threshold of 70 percent, the federal government would pay all the cost of the expansion until 2017, when the state would begin helping out, with its share reaching 10 percent in 2020. The federal share of the state’s current program is 72 percent.

This proposed rule could have important implications not just for state finances, but for Medicaid patients. It means that a family of three with an annual income of $30,000 could be required to pay $1,500 in premiums and co-payments, Pear reports in the Times.

published in the Federal Register last week, the rule proposes to “update
and simplify Medicaid premium and cost sharing requirements, to promote the
most effective use of services and to assist states in identifying cost-sharing
flexibilities.” It proposes
“new options for states to establish higher cost sharing for nonpreferred
drugs and to propose higher cost sharing for non-emergency use” of emergency rooms.

Barbara K. Tomar, director of federal affairs at the American College of Emergency Physicians, told Pear that the administration had not adequately defined the “nonemergency services” for which the poor might have to pay. “In many cases, she said, patients legitimately believe they need emergency care, but the final diagnosis does not bear that out,” Pear writes.

The proposed rule has no limit on emergency department charges for “non-emergency use.” It says the hospital will have responsibility to assess the individual clinically and ensure access to other
sources of care before requiring payment, which could pose problems for hospitals.

public has until Feb. 13 to comment on the proposed rule, which can be
submitted at www.regulations.gov.

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One Reply to “Feds plan to let states impose co-payments on Medicaid patients above poverty level to encourage them to expand the program”

  1. David Adams

    The federal government's 100% payment of "all costs" only applies to those Medicaid recipients made newly eligible by the ACA expansion of the program. People currently eligible but not enrolled make up the lion's share of the costs we can't afford and those costs will be immediate. Many, if not most, of those people are currently covered by employer-sponsored coverage they will be forced out of as part of the many unintended consequences of this federal law.

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