Medicaid and CHIP Eligibility, Enrollment, Renewal, and Cost Sharing Policies as of January 2017: Findings from a 50-State Survey
Premiums and Cost Sharing
States have options to charge premiums and cost sharing in Medicaid up to maximum allowable charges under federal rules that vary by income and group (Box 1).1 These rules establish parameters for premiums and cost sharing given that Medicaid and CHIP enrollees have limited ability to pay out-of-pocket costs due to their modest incomes and a large body of research that shows that premiums and cost sharing can impede access to coverage and care for low-income families.2
|Box 1: Medicaid and CHIP Premium and Cost Sharing Rules|
|Premiums in Medicaid. States may charge premiums for Medicaid enrollees with incomes above 150%, including children and adults. Medicaid enrollees with incomes below 150% FPL may not be charged premiums.
Cost Sharing in Medicaid. States may charge cost sharing in Medicaid, but allowable charges vary by income (see Table 1). Cost sharing cannot be charged for emergency, family planning, pregnancy-related services in Medicaid, preventive services for children, or for preventive services defined as essential health benefits in Alternative Benefit Plans in Medicaid. In addition, children enrolled through mandatory eligibility categories generally cannot be charged cost-sharing. The federal minimum eligibility standard for children is 133% FPL, although some states have higher minimum standards for children.
Limit on Out-of-Pocket Costs. Overall, premium and cost sharing amounts for family members enrolled in Medicaid may not exceed 5% of household income. This 5% cap is applied on a monthly or quarterly basis.
Premiums and Cost Sharing in CHIP. States have somewhat greater flexibility to charge premiums and cost sharing for children covered by CHIP, although there remain limits on the amounts that can be charged, including an overall cap of 5% of household income.
|Table 1: Maximum Allowable Cost Sharing Amounts in Medicaid by Income|
|<100% FPL||100% – 150% FPL||>150% FPL|
|Outpatient Services||$4||10% of state cost||20% of state cost|
|Non-Emergency use of ER||$8||$8||No limit (subject to overall 5% of household income limit)|
|Non-Preferred||$8||$8||20% of state cost|
|Inpatient Services||$75 per stay||10% of state cost||20% of state cost|
|Notes: Some groups and services are exempt from cost sharing, including children enrolled in Medicaid through mandatory eligibility pathways, emergency services, family planning services, pregnancy related services, and preventive services for children. Maximum allowable amounts are as of FY2014. Beginning October 1, 2015, maximum allowable amounts increase annually by the percentage increase in the medical care component of the Consumer Price Index for All Urban Consumers (CPI-U).|
Premiums and Cost Sharing for Children
As of January 2017, 30 states charge premiums or enrollment fees for children in Medicaid or CHIP. Overall, 26 states charge monthly or quarterly premiums (4 in Medicaid and 22 in CHIP), and 4 states charge annual enrollment fees for CHIP (Figure 18). A larger number of CHIP programs have premiums and enrollment fees compared to Medicaid because the program covers children with relatively higher incomes and has different premium rules. In 22 of the 30 states charging premiums or enrollment fees, these charges begin for children in families with incomes at 150% FPL or higher, including 8 states that begin premiums at or above 200% FPL. Premium amounts vary across states, and most states scale the amounts by income. As part of the ACA protections for children’s coverage that extend through 2019, states may only increase premiums for cost-of-living adjustments or if the state had a routine premium adjustment approved prior to the enactment of the ACA. During 2016, there were no changes to premiums and enrollment fees for children outside of a routine adjustment.
State policies for non-payment of premiums vary. Among the 26 states charging monthly or quarterly premiums in Medicaid or CHIP, 21 provide a 60-day or longer grace period before cancelling coverage for non-payment. This count includes the 4 states that charge premiums in Medicaid, which must provide a minimum 60-day grace period and cannot require enrollees to repay outstanding premiums as a condition of re-enrollment. It also includes 17 states that charge premiums in separate CHIP programs. In contrast to Medicaid, CHIP programs must provide a minimum 30-day grace period and may impose up to a 90-day “lock-out period,” during which a child is not allowed to re-enroll. Among the 22 states charging monthly or quarterly premiums in CHIP, 4 limit the grace period to the minimum 30 days and 15 have a lock-out period for children disenrolled due to non-payment. Arizona reduced its lock-out period from three to two months when it reopened CHIP enrollment in 2016. Overall, 17 of the 26 states that charge monthly or quarterly premiums in Medicaid or CHIP require families to reapply for coverage before re-enrolling, subject to some exceptions. Consistent with Medicaid rules, the four states that charge premiums in Medicaid provide retroactive coverage. In addition, eight of the states that charge premiums in separate CHIP programs allow for retroactive reinstatement of coverage if outstanding premiums are paid.
As of January 2017, 3 states charge cost sharing for children in Medicaid, while 24 of the 36 states with separate CHIP programs do so (Figure 19). Consistent with federal rules, cost sharing does not apply to children below 133% FPL in all of these states, except Tennessee, which has a waiver to begin cost sharing at 100% FPL. In 16 states, cost sharing begins between 133% and 150% FPL, while 7 states begin cost sharing at 150% FPL or higher. Cost sharing charges vary by service. For example, for a child with family income at 201% FPL, 20 states charge cost sharing for a physician visit, 12 charge for an emergency room visit, 18 charge for non-emergency use of the emergency room, 15 charge for an inpatient hospital visit, and 19 charge for prescription drugs, although, in some cases, charges only apply to brand name or non-preferred brand name drugs.
Premiums and Cost Sharing for Parents and Other Adults
Because eligibility levels for parents and other adults are much lower than for children, in most states, these groups are not charged premiums. However, six states (Arizona, Arkansas, Indiana, Iowa, Michigan, and Montana) have received waivers to charge premiums or monthly contributions for adults that are not otherwise allowed under law. Arizona received this waiver approval during 2016. In addition, during 2016, Arkansas received approval to amend its existing waiver, which included changing from monthly income-based contributions to health savings accounts in lieu of point-of-service cost sharing to monthly premiums for individuals with incomes above 100% FPL.
Among adults, 39 states charge parents cost sharing in Medicaid and 23 of the 32 states that have expanded Medicaid charge cost sharing for expansion adults. These counts reflect the elimination of copayments for parents and other adults in Oregon during 2016. Wisconsin, which is the only non-expansion state to cover other adults, also charges cost sharing but is not included the count for expansion adults. In most of the states that charge cost sharing for parents and/or expansion adults, cost sharing is required of all enrollees regardless of income. However, cost sharing amounts for adults are generally nominal, reflecting their low incomes. Cost sharing charges vary by service (Figure 20). Cost sharing for parents and expansion adults remained largely stable during 2016, aside from changes in a few states. Specifically, Oregon eliminated cost sharing for parents and expansion adults, Arizona and Montana increased cost sharing amounts for some services, and Iowa decreased the income at which cost sharing begins for expansion adults.