Many Medicaid Patients Could Face Higher Fees

By Robert Pear for the New York Times

Millions of low-income people could be required to pay more for health care under a proposed federal policy that would give states more freedom to impose co-payments and other charges on Medicaid patients.

Hoping to persuade states to expand Medicaid, the Obama administration said state Medicaid officials could charge higher co-payments and premiums for doctors’ services, prescription drugs and certain types of hospital care, including the “nonemergency use” of emergency rooms. State officials have long asked for more leeway to impose such charges.

The 2010 health care law extended Medicaid to many childless adults and others who were previously ineligible. The Supreme Court said the expansion of Medicaid was an option for states, not a requirement as Congress had intended. The administration has been trying to persuade states to take the option, emphasizing that they can reconfigure Medicaid to hold down their costs and “promote the most effective use of services.”

In the proposed rule published Tuesday in the Federal Register, the administration said it was simplifying a complex, confusing array of standards that limit states’ ability to charge Medicaid beneficiaries. Under the proposal, a family of three with annual income of $30,000 could be required to pay $1,500 in premiums and co-payments.

As if to emphasize the latitude given to states, the administration used this heading for part of the new rule: “Higher Cost Sharing Permitted for Individuals With Incomes Above 100 Percent of the Federal Poverty Level” (that is, $19,090 for a family of three).

Barbara K. Tomar, director of federal affairs at the American College of Emergency Physicians, said the administration had not adequately defined the “nonemergency services” for which low-income people could be required to pay. In many cases, she said, patients legitimately believe they need emergency care, but the final diagnosis does not bear that out.

“This is just a way to reduce payments to physicians and hospitals” from the government, Ms. Tomar said.

With patients paying more, the federal government and states would pay less than they otherwise would. Medicaid covers 60 million people, and at least 11 million more are expected to qualify under the 2010 law. The federal government pays more than half of Medicaid costs and will pay a much larger share for those who become eligible under the law.

In the proposed rule, the administration said it had discovered several potential problems in its efforts to carry out the law.

First, it said, it has not found a reliable, comprehensive and up-to-date source of information about whether people have employer-sponsored health insurance. The government needs such information to decide whether low- and middle-income people can obtain federal subsidies for private insurance.

The subsidies can be used to buy coverage in competitive marketplaces known as insurance exchanges. Under the law, people can start enrolling in October for coverage that starts in January 2014, when most Americans will be required to have health insurance. People who have access to affordable coverage from employers will generally be ineligible for subsidies.

In applying for subsidies, people must report any employer-sponsored insurance they have. But the administration said it could be difficult to verify this information because the main sources of data reflect only “whether an individual is employed and with which employer, and not whether the employer provides health insurance.”

Since passage of the health care law, the administration has often said that people seeking insurance would use a single streamlined application for Medicaid and the subsidies for private coverage. Moreover, the state Medicaid agency and the exchange are supposed to share data and issue a “combined eligibility notice” for all types of assistance.

But the administration said this requirement would be delayed to Jan. 1, 2015, because more time was needed to establish electronic links between Medicaid and the exchanges.

Leonardo D. Cuello, who represents Medicaid beneficiaries as a lawyer at the National Health Law Program, expressed concern.

“Under the proposed rule,” Mr. Cuello said, “many people will be funneled into health insurance exchanges even though they have special needs that are better met in Medicaid. And if you asked the right questions, you would find out that they are eligible for Medicaid.”

The federal government will have the primary responsibility for running exchanges in more than half the states. About 20 states are expected to expand Medicaid; governors in other states are opposed or uncommitted.

The proposed rule allows hospitals to decide, “on the basis of preliminary information,” whether a person is eligible for Medicaid. States must provide immediate temporary coverage to people who appear eligible.

Kenneth E. Raske, president of the Greater New York Hospital Association, said this could be a boon to low-income people. “Currently,” he said, “only children and pregnant women are presumed eligible for inpatient admissions under Medicaid in New York.”

The public has until Feb. 13 to comment on the proposed rule. Comments can be submitted at


  1. Margie Rece on January 29, 2013 at 10:35 am

    Presently being the recipient of Medicare only, no co-insurance, and very grateful to receive back what I already paid in of my own money, I am very suspicious of any plan that involves paying more and or getting less coverage. It is more difficult to change to new and untested plans than to keep what you have when it is working well.
    I want to see Medicare for ALL, everybody in, nobody out.
    Margie Rece

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