Premiums, Copayments, & other Cost Sharing
States have the option to charge premiums and to establish out of pocket spending (cost sharing) requirements for Medicaid enrollees. Out of pocket costs may include copayments, coinsurance, deductibles, and other similar charges. Maximum out of pocket costs are limited, but states can impose higher charges for targeted groups of somewhat higher income people. Certain vulnerable groups, such as children and pregnant women, are exempt from most out of pocket costs and copayments and coinsurance cannot be charged for certain services.
States can charge limited premiums and enrollment fees on the following groups of Medicaid enrollees:
- Pregnant women and infants with family income at or above 150% FPL ($22,065 for a family of 2 in 2011)
- Qualified disabled and working individuals with income above 150% FPL ($16, 334 for an individual in 2011)
- Disabled working individuals eligible under the Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA)
- Disabled children eligible under the Family Opportunity Act (FOA)
- Medically needy individuals
States have the option to impose higher, alternative premiums on other groups of enrollees, if their family incomes exceed 150% of the federal poverty level. Certain groups, such as institutionalized individuals and most children, are excluded from higher cost sharing.
Medicaid rules give states the ability to use out of pocket charges to promote the most cost-effective use of prescription drugs. To encourage the use of lower-cost drugs, states may establish different copayments for generic versus brand-name drugs or for drugs included on a preferred drug list. For people with incomes above 150% FPL, copayments for non-preferred drugs may be as high as 20 percent of the cost of the drug. For people with income at or below 150% FPL, copayments are limited to nominal amounts. States must specify which drugs are considered either “preferred” or “non-preferred.” States also have the option to establish different copayments for mail order drugs and for drugs sold in a pharmacy. See more information in Prescription Drugs.
Non-emergency Use of the Emergency Department
States have the option to impose higher copayments when people visit a hospital emergency department for non-emergency services. This copayment is limited to non-emergency services, as emergency services are exempted from all out of pocket charges. For people with incomes above 150% FPL, such copayments may be established up to the state’s cost for the service, but certain conditions must be met.
The hospital emergency department must meet the following requirements before the non-emergency medical services are provided:
- The hospital has determined, after an appropriate medical screening, that the individual does not need emergency medical services.
- An alternative non-emergency services provider is actually available and accessible in a timely manner to provide the services needed by the individual with the imposition of no or a lesser copayment.
- The hospital has provided the individual with (a) notice that a copayment may be required before the service is provided; (b) the name and location of an alternative non-emergency services provider (as described above); and (c) a referral to coordinate scheduling of the individual’s treatment by this provider.