Current rules permit, but do not require, states to impose cost sharing on certain populations, within limits designed to protect Medicaid enrollees who have low incomes from high out-of-pocket costs. States have flexibility to impose cost sharing on certain populations. Cost-sharing is generally limited to nominal amounts but may be higher for those with incomes above 100% FPL. Certain populations and services are exempt from cost sharing requirements (Table 1). Total out-of-pocket costs for premiums and cost sharing for all individuals in a Medicaid household are capped at 5% of monthly or quarterly household income. States are required to establish a process for tracking incurred cost sharing that does not rely on enrollee documentation and stops cost sharing once a family meets the cap. States must allow providers to reduce or waive cost sharing for enrollees on a case-by-case basis. A state may allow providers to deny services to enrollees for nonpayment of cost sharing, if the enrollees have a household income above 100% FPL and are not a part of a population exempt from cost sharing except for certain services.
While cost sharing is generally limited to nominal amounts, states can charge higher cost sharing to individuals with income above 100% FPL. The nominal cost sharing amounts for individuals with income up to 100% FPL are specified in regulation and are set at $4 for most outpatient services and preferred drugs, $8 for non-preferred drugs and non-emergency use of the emergency department (ED), and $75 per inpatient stay. These maximum allowable amounts are increased annually by the percentage increase in the medical care component of the Consumer Price Index. For services other than prescription drugs and non-emergency ED use, cost sharing cannot exceed 10% of the cost of the service for individuals in families with incomes from 101-150% FPL and cannot exceed 20% of the cost of the service for individuals in families with incomes above 150% FPL.
States have additional flexibility for imposing cost sharing on non-preferred drugs and non-emergency ED (emergency department) use, including imposing cost sharing for populations otherwise exempt from cost sharing. For prescription drugs, states may impose different cost sharing amounts for preferred and non-preferred drugs and may impose nominal cost sharing for non-preferred drugs on populations otherwise exempt from cost sharing. Preferred drug cost sharing must be applied to non-preferred drugs if the prescribing doctor determines that the preferred drug would not be as effective or would have adverse effects for the individual.
For non-emergency ED use, states may require cost sharing if enrollees are screened by a medical professional to confirm that the care is non-emergency. Enrollees must be notified about the cost sharing charges and provided with the name and location of an available and accessible alternative non-emergency services provider. States may impose cost sharing for non-emergency ED use for individuals otherwise exempt from cost sharing but must limit cost sharing to the maximum amount allowed for individuals with income below 150% FPL. For individuals with income above 150%, there is not a maximum cost sharing amount states may impose. (See Table 1 for full cost sharing rules on prescription drugs and non-emergency ED use.)
Under current rules, states may not charge premiums for Medicaid enrollees with incomes less than 150% FPL. States may charge certain pregnant individuals with premiums of up to 10% of the amount by which their income exceeds 150% FPL. States may also obtain waivers to impose premiums in Medicaid that federal rules do not otherwise allow.
