Update: New Medicaid Essential Health Benefits Proposed Rule and What It Means for People Living with HIV and Hepatitis

By Amy Killelea February 11, 2013

In January, the Department of Health and Human Services (HHS) published a much-awaited proposed rule spelling out the “Essential Health Benefits” (EHB) requirements for newly eligible Medicaid beneficiaries (those ineligible for Medicaid under current Medicaid rules who will be eligible under the Affordable Care Act (ACA) in 2014 if states opt to expand). Comments may be submitted through the federal regulations website and are due February 21, 2013. The rule addressed a number of areas, the following of which will have a significant impact on people living with HIV and viral hepatitis:

Benefits for Newly Eligible Medicaid Beneficiaries

The proposed rule requires states to provide newly eligible Medicaid beneficiaries an “Alternative Benefits Package” (ABP) that includes the same ten categories of EHB as required in the private insurance market. This allows states to offer a Medicaid benefits package for the expansion population that could be very similar to the plan states chose as their benchmark plan for the private insurance market or could be very similar to the state’s traditional Medicaid benefits package. NASTAD is concerned with the lack of comprehensive federal definitions of the EHB categories as well as the lack of adequate consumer protections for people living with chronic conditions and will raise these concerns in comments on the Medicaid rule. Further definition of each category is necessary so that states are able to determine that the ABP truly meets the EHB requirements.

  • The Medicaid rule states that current Medicaid law with regard to prescription drug coverage will continue to apply for the ABP chosen for newly eligible beneficiaries. This means that the scope of the formulary must include all outpatient prescription drugs of manufacturers that enter into a rebate agreement with the state Medicaid program. However, states will retain the flexibility to impose limits on access, such as measures that prefer generic over brand-name drugs and restrictive monthly limits on the number of drugs beneficiaries may receive. NASTAD will continue to push back against Medicaid prescription drug limits and urge HHS to adopt standards that ensure people living with HIV and viral hepatitis have access to the range of medications they need to stay healthy.
  • States are required to give Medicaid beneficiaries defined as “medically frail” the option to enroll in a traditional Medicaid benefits package instead of the new ABP for newly eligible beneficiaries. The proposed definition of medically frail should encompass people living with HIV, viral hepatitis, or other chronic conditions, and NASTAD will request explicit inclusion of people living with HIV and viral hepatitis in this definition. This is to ensure that in states where the ABP for the Medicaid expansion population may not be as robust as traditional Medicaid, people living with HIV and viral hepatitis have the choice to enroll in traditional Medicaid instead of the ABP.

New Cost Sharing Rules for Medicaid

  • The proposed rule introduces new cost sharing rules for Medicaid (these rules would apply to both newly eligible and traditional Medicaid beneficiaries). The most significant proposed changes concern prescription drugs and non-emergency care sought in an emergency room. For prescription drugs, the rule proposes to increase the amount of cost sharing states may charge to people with income below 150 percent of the federal poverty level (FPL). For non-preferred drugs, states may impose cost sharing of $8 per prescription. This is an increase from current law. The proposed rule also increases the amount that states may charge for non-emergency use of the emergency room to $8 for those with income under 150 percent FPL. This increase is particularly troubling because of lack of a clear definition of what “non-emergency use” means. NASTAD will oppose any increases in cost sharing for low-income populations for whom even nominal cost sharing may act as a barrier to care.

To learn more about health reform and its impact of on health departments, please contact Amy Killelea or visit of our Health Reform Resources page at NASTAD.org.

We want to hear from you! What do you think about the new Medicaid essential health benefits proposed rule? Let us know by leaving a comment below and submitting comments to the Department of Health and Human Services here.