Elicia J. Herz
Specialist in Health Care Financing
The Medicaid program, which served 72 million people in FY2012, finances the delivery of a wide variety of preventive, primary, and acute care services as well as long-term services and supports for certain low-income populations. Benefits are available to beneficiaries through two avenues. First, the traditional Medicaid program covers a wide variety of mandatory services (e.g., inpatient hospital services, lab/x-ray services, physician care, nursing facility care for persons aged 21 and over), and other services at state option (e.g., prescribed drugs, physiciandirected clinic services, physical therapy, prosthetic devices) to the majority of Medicaid beneficiaries across the United States. Within broad federal guidelines, states define the amount, duration, and scope of these benefits. Thus, even mandatory services are not identical from state to state.
The Deficit Reduction Act of 2005 (DRA; P.L. 109-171) created an alternative benefit structure for Medicaid. Under this authority, states may enroll certain Medicaid subpopulations into benchmark benefit plans that include four choices: (1) the standard Blue Cross/Blue Shield preferred provider plan under the Federal Employees Health Benefits Program, (2) a plan offered to state employees, (3) the largest commercial health maintenance organization in the state, and (4) other coverage appropriate for the targeted population, subject to approval by the Secretary of Health and Human Services (HHS).
Since the enactment of the Patient Protection and Affordable Care Act in 2010 (ACA; P.L. 111- 148, as amended), benchmark benefits have taken on a new importance in the Medicaid program. As per the ACA, a new mandatory group of non-elderly, non-pregnant adults with income up to 133% of the federal poverty level will be eligible for Medicaid beginning in 2014, or sooner at state option. (For more information about a Supreme Court ruling regarding this group, see CRS Report RL33202, Medicaid: A Primer.) These individuals will be required to enroll in benchmark plans rather than traditional Medicaid (with some exceptions for subgroups with special medical needs). However, to date, only a handful of states have experience administering these plans, nearly all of which have been tailored to specific subpopulations.
The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) estimated that coverage expansion provisions in the ACA would increase enrollment by about 7 million in FY2014, rising to 11 million by FY2022 in both the Medicaid and the State Children’s Health Insurance Programs (Congressional Budget Office, Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision, July 2012). Many of these new enrollees will get benchmark benefits. To assist Congress in evaluating the current scope of benefits available under Medicaid, this report outlines the major rules that govern and define both traditional Medicaid and benchmark benefits. It also compares the similarities and differences between these two benefit package designs.
Date of Report: April 23, 2013
Number of Pages: 16
Order Number: R42478
Price: $29.95
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