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New Medicaid Rules Allow States to Set Premiums and Higher Co-Payments

December 3rd, 2008

A new federal rule gives states sweeping authority to charge premiums and higher co-payments for doctors’ services, hospital care and prescription drugs provided to low-income people under Medicaid. The rule is expected to save money for the federal government and the states.

But public health experts and even some federal officials predicted that many low-income people would delay or forgo care because of the higher charges. Under the rule, states can deny care or coverage to Medicaid beneficiaries who do not pay their premiums or their share of the cost for a particular item or service.

Many Medicaid recipients have chronic illnesses, use numerous prescription drugs and frequently visit doctors, so the burden of even modest co-payments can become substantial.  David P. Sloane, senior vice president of AARP, said, “Denying necessary care to people who are unable to pay is unconscionable,” as well as fiscally unwise.

The Congressional Budget Office has estimated that 13 million low-income people, about a fifth of Medicaid recipients, will face new or higher co-payments. Most of the savings result from “decreased use of services,” it said.  Under the rule, states can use co-payments to promote the use of preferred brand-name drugs and to discourage the use of hospital emergency rooms for routine care. 

 Click HERE for the for the full New York Times Article.