Medicaid and Family Planning: Background and Implications of the ACA

Future Challenges

In the coming years, state choices about whether or not to expand full scope Medicaid eligibility under the ACA or whether to establish or maintain limited scope Medicaid family planning programs will shape how most low-income women gain access to family planning services.   Furthermore, the range of available benefits and contraceptive methods may vary for women who have Medicaid funded family planning services.  Those who qualify for the full scope Medicaid under the ACA expansion may have benefits that differ from those who qualify based on either traditional full scope Medicaid rules or through Medicaid family planning programs.  Services that are claimed as a “family planning service,” will continue to be exempt from cost sharing charges, and states may claim a 90% federal match for beneficiaries enrolled in traditional full-scope Medicaid or a Medicaid family planning program.  The federal government pays at least 90% of the cost for all services delivered to beneficiaries who qualify under the ACA Medicaid expansion.

The following sections highlight key challenges facing state and federal Medicaid officials, policy makers, and providers as they shape Medicaid-funded family planning services in the future.

Ensuring Contraceptive Choices for Women

Variations in Coverage across Medicaid eligible groups: Federal ACA rules and state level Medicaid policy decisions have created multiple coverage populations that are subject to different eligibility rules and benefit packages.  Federal statute requires states to cover “family planning services and supplies,” but does not specifically define these services.  States have a fair amount of flexibility in defining the specific family planning services and could offer different levels of benefits for different groups of women depending on the type of Medicaid program  they qualify for. As discussed earlier, the ACA defines a set of essential health benefits that must be offered to newly eligible individuals under the Medicaid ACA expansions, but there is no minimum requirement for the specific servcies that traditional full scope Medicaid must offer.   In particular, women who obtain ACA Medicaid coverage are entitled to no-cost coverage of the full range of FDA-approved contraceptives, while traditional Medicaid programs are not required to cover the full range.  Furthermore, women covered in ACA Medicaid plans receive no-cost coverage for other preventive services such as screening for cervical and breast cancers, which are considered “optional” under traditional Medicaid, although many states have chosen to cover these services.1 A standardized federal definition of family planning services could facilitate state policymaking in this arena, but in the absence of such guidance, some have proposed that the essential health benefits required in ACA Medicaid expansions could be a reasonable benchmark for standardization.  In addition to state Medicaid benefits rules, Medicaid managed care plans typically employ cost reduction or utilization management techniques that can further differentiate family planning benefits offered to Medicaid beneficiaries, particulary when it comes to contraceptives.  This could result in a range of benefits that are available to women enrolled in different plans or living in different parts of the same state.

Medical Management: Another key issue for family planning care is medical management under pharmacy benefits.  The FDA has identified 20 different contraceptive methods, and the contraceptive coverage rule specifies that plans must cover all methods, as prescribed.2 Women enrolled in these plans must be offered coverage of their method of choice without cost sharing, but coverage of these methods can be restricted by other means.  Contraceptive drugs and supplies in Medicaid and in most health plans are treated as a prescription drug benefit and are subject to the same formulary restrictions as other drugs. Contraceptives are often subject to formulary cost reduction strategies such as step therapy or “fail-first” trials.  These methods require patients to try a variety of methods or generic brands, and often to prove “failure” of a particular method in order to obtain coverage for a higher tier or more expensive therapy.  In the case of contraception, the contraceptive “failure” could mean an unintended pregnancy, and could result in higher costs for the Medicaid program in the long-run.   A California law addresses some of the potential ambiguity of medical management limitations by requiring that all private plans and Medicaid managed care plans cover all FDA-approved contraceptives without cost sharing.3

Religious Exemptions: As the health care system moves toward more integrated care, centered on primary care, sensitive services such as family planning may require careful attention. This is especially true for women who are enrolled in faith-based plans or providers that have religious objections to some or all methods of contraception.  Medicaid programs are faced with ensuring appropriate and timely referrals for women enrolled in faith-based health plans or provider networks that may limit women’s access to services by exercising a “conscience exemption.” Meaningful implementation of the federal freedom of choice provision in Medicaid managed care plans has become increasingly important as enrollment in faith based networks grows.  This means that assuring that women have access to services meet the full range of their health care needs, including sexual and reproductive care, while maintaining confidentiality and quality, which will continue to be important to the women who receive services funded by the Medicaid programs across the nation.

Provider Networks: Medicaid family planning programs will continue to be an important avenue for ensuring access to reproductive health services for low-income individuals during these transitional periods.  In states with Medicaid family planning programs, health centers are more likely to offer clients access to a wide range of contraceptive options than health centers in states without public family planning programs.4 Family planning health centers can play a critical role in ensuring continuity of care for low-income women of reproductive age who need reproductive health services over a long period of time.  States have established network adequacy rules that are designed to assure that provider networks include the full range of providers that Medicaid beneficiaries need to address their health needs.  Furthermore, the inclusion of existing family planning providers in both Medicaid managed care and other service delivery networks can be an effective strategy to maintain continuity of care and consistent contraceptive use in settings that offer high quality confidential services.  Women seeking care within networks or out of network through federal “freedom of choice” rules may want to continue seeing family planning providers to meet their contraceptive care needs.  Another important consideration for network adequacy however, is low provider payment, leaving providers to struggle with the costs of delivering services in many regions or providers who do not participate in the program due to low payments.

Payment Issues

Low Rates: On average, state Medicaid programs pay providers much lower reimbursement than private insurers and subsequently Medicaid provider reimbursement has not kept up with the cost of delivering services.5  Payment levels vary between states and access to providers has been particularly challenging in the states that pay the lowest rates.6  Payment levels also vary between programs, with some states paying higher reimbursement in family planning expansion programs compared to full scope Medicaid.  With millions more women joining the Medicaid program under the ACA’s expansion, there will be more demand for provider availability.  Addressing payment rates is an important factor in securing access to providers for women with Medicaid coverage.

Post Pregnancy Contraception: More than half of repeat pregnancies with short pregnancy intervals (less than 18 months) are unintended.  Close spacing of pregnancies puts women and their children at greater risk for complications such as low birth weight, preterm birth and preeclampsia.7  An estimated 14 to 35% of adolescent mothers become pregnant again within one year of delivery, despite intention to use contraception.8  Sterilization and long-acting reversible contraception (LARC) such as IUDs are the most effective methods for preventing pregnancy, and access to LARCs has been recommended by a number of professional associations for post-partum women. Historically, IUDs have been among the most expensive contraceptive methods, and access to post-pregnancy sterilization and LARC methods for some post-partum women has been complicated because payment for obstetric services is typically “bundled.” This means that the costs of the LARC and the insertion and related services may not be accounted for in that “bundled” payment, and consequently there is a disincentive for providers to offer this highly effective but costly method to post-partum women.  A number of states have initiated policies to facilitate reimbursement of LARCs to post-partum women but it is still difficult to administer in many states.9   Access to sterilization has been challenging for some women with Medicaid who are still in the hospital after a delivery because they may have not met the 30-day waiting period requirement, a policy designed to protect them from coercion.

Discounted Drug Pricing: Many family planning clinics and safety net providers that participate in Medicaid rely on Medicaid program discounts as well as the 340B Drug Pricing Program to get the best prices for contraceptive supplies for women.  The 340B program, established in 1992 to provide discounted prescription outpatient drugs for safety net providers, has grown over time, involving a larger and more diverse set of providers such as family planning clinics.10   Clinics that participate in the 340B program must follow an increasingly complex set of regulations from the Health Resources and Services Administration (HRSA), the agency that administers the 340 B program as well as CMS, which administers Medicaid.  Family planning providers have relied on 340B contraceptive discounts to maximize resources when caring for patients with diverse payer sources.   Currently, providers that use 340B pricing must do so for all prescriptions, but some representatives of family planning clinics are advocating for structural changes that would allow providers and Medicaid programs the flexibility to decide how and when to apply 340B discounts on an individual case basis.  They are claiming these changes would help states and providers maximize resources and keep up with the changing drug coverage and reimbursement landscape.

Assuring Continuity and Quality of Care

Transitions in Coverage: For millions of women who have been uninsured or who only have had access to periodic or limited benefits, the promise of continuous full-scope Medicaid enrollment is an important step toward stable health care.  Some proportion of these individuals will, however, experience gaps or difficult coverage transitions, potentially disrupting their continuity of care and established relationships with providers.  Research has found that approximately half of low-income individuals could experience fluctuations in income or family circumstance in a year, which could lead to vacillation in eligibility for Medicaid and state Marketplace plans.11  Because continuity of care and patient-centered decisions are key for successful family planning programs and for effective use of contraception, systems designed to assure smooth coverage transitions will be critical to assure that women don’t experience disruptions in contraceptive coverage, which could result in interruptions in contraception use or in the use of less reliable methods, and put women at higher risk for experiencing unintended pregnancies.

Counseling and Education: Medicaid programs have increasingly invested in patient education and self-management initiatives for chronic disease, often relying on non-clinician team members to deliver high quality education and counseling. Reimbursement policies that include support for patient self-management and informed decision-making are becoming an important cost reduction and quality improvement tool for health plans and in Medicaid programs.12 In this vein, patient-centered family planning is critical to successful contraception use.  Contraceptive counseling and education are important benefits that can be reimbursed under current family planning program rules in most states and are important elements of comprehensive family planning services.

Quality Standards: Medicaid programs and managed care health plans have been moving toward value-based reimbursement mechanisms that rely on measures of high quality care.   The development of quality measures and payment systems that include benchmarks that assess women’s health and family planning care are lagging. The new federal recommendations for quality family planning services outline specific performance measures and data collection methods to evaluate the provision of the quality of care and could be the foundation for the development of family planning quality of care measures.13  The application of evidence-based clinical and utilization measures specific to family planning would allow Medicaid programs, the largest payers of family planning in the nation, to improve the quality of women’s health services. Standardization of family planning services to meet quality benchmarks could increase the quality of care by assuring that the array of services available in every state meets the full range of women’s contraceptive and sexual health needs.

The Center for Medicaid and CHIP Services (CMCS) is collaborating with the CDC to develop contraception-related measures as part of its Maternal and Infant Health Initiative.14  One of the two current priorities for the initiative is to increase the use of highly effective contraception by 15% over a 3-year period.  To this end, the initiative has developed and validated two new contraceptive measures.  These measures are the percentage of female clients ages 15 to 44 at risk of unintended pregnancy that adopt or continue use of 1)  the most effective or moderately effective FDA-approved methods of contraception and  2) an FDA-approved, long-acting reversible method of contraception (LARC). Using data from the National Survey of Family Growth as a benchmark, the initiative offers support to states as they develop reporting capacity around these new measures.


As the ACA implementation progresses and matures, the role of Medicaid in financing family planning services for low-income women will only grow.  Medicaid expansion offers an opportunity to broaden access to sexual and reproductive health services for low-income women.    As states implement various provisions of the ACA, the role of Medicaid in women’s health and health care must be carefully considered. Gaps in coverage, inconsistent benefits, and difficulties accessing care can translate to disruptions in care that can lead to negative reproductive outcomes including unintended pregnancies. As delivery systems under Medicaid evolve and become more complex, it will be important to develop policies that support and include the wide range of reproductive and sexual health services that women need, from the providers that offer the highest quality confidential care. Medicaid family planning programs have demonstrated that they can improve health outcomes and reduce costs associated with unintended pregnancies.  The ACA provides an opportunity for the Medicaid program to sustain the progress and accomplishments that the program has already attained in family planning and to be on the vanguard of programs that advance women’s reproductive health in the future.

This brief was prepared by Usha Ranji of the Kaiser Family Foundation, Yali Bair of Ursa Consulting, and Alina Salganicoff of the Kaiser Family Foundation.



The ACA, Medicaid Expansion, and Family Planning Appendix 1: Women with Full Medicaid Benefits and Share that are Reproductive Age, by State

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