Medicaid Alternative Benefit Plans
& Essential Health Benefits
Barbara Coulter Edwards
Disabled and Elderly Health Programs Group
Center for Medicaid and CHIP Services
Centers for Medicare & Medicaid Services
April 20, 2012
Alternative Benefit Plans Today
 Deficit Reduction Act (DRA) of 2005 created new
section 1937 of the Social Security Act
 Increased flexibility for States to provide Medicaid
coverage through tailored “benchmark” or
“benchmark equivalent” benefit packages to
specific populations
 Mandatory enrollment limited to certain Medicaid
beneficiary groups
Alternative Benefit Plans Today
 Exempt from mandatory enrollment
Blind or disabled
Medically needy/frail
Pregnant women
Terminally ill individuals receiving hospice care
Individuals entitled to benefits under Medicare
Alternative Benefit Plans Today
 “Benchmark” coverage is a benefit plan that is either the
same as:
1. Federal employees health benefit coverage;
2. State employees health benefit coverage; or
3. Coverage offered by the health maintenance organization
(HMO) with the largest insured commercial non-Medicaid
enrolled population in the State.
4. Secretary-approved coverage – Any other health benefits
coverage that the Secretary determines, upon application by
a State, provides appropriate coverage for the population
proposed to be provided such coverage
Alternative Benefit Plans Today
 “Benchmark-Equivalent” Coverage
1. Benefit package has an aggregate actuarial value that is at least
equivalent to that of one of the Benchmark Benefit packages
2. Must include coverage for following services:
Inpatient and outpatient hospital
Physician’s surgical & medical
Lab and x-ray
Well baby/well child care (including immunizations)
Emergency services
Family planning services and supplies
Mental health services
Prescription drugs
Other appropriate preventative services as designated by the Secretary
Alternative Benefit Plans Today
 States may provide “benchmark” or “benchmarkequivalent” coverage by obtaining employer sponsored
health plans.
 The State must assure that the employer sponsored
plans meet the requirements of the
benchmark/benchmark-equivalent coverage, including
economy and efficiency.
 A State may provide coverage through a combination
of employer sponsored health plans and additional
benefits coverage provided by the State.
Alternative Benefit Plans Today
 States must assure enrollee access, through
benchmark or benchmark-equivalent coverage or
otherwise, to rural health clinic services and FQHC
 Payments must be made in accordance with the
Medicaid payment provisions for rural health clinics
and FQHC services.
Alternative Benefit Plans Today
States must provide public notice and reasonable
opportunity to comment before submitting
benchmark/benchmark-equivalent plans and/or
requesting changes to approved plans.
Alternative Benefit Plans Today
 11 States, the District of Columbia, Guam and Puerto Rico
have implemented Medicaid Alternative Benefit plans.
 Wisconsin implemented a plan equal to the commercial HMO plan with
the largest non-Medicaid enrollment in the States
 The following States and the District of Columbia implemented
Secretary approved benefit plans:
Connecticut (early option)
District of Columbia (early option)
Minnesota (early option)
Guam (early option)
New York
Puerto Rico (early option)
West Virginia
Alternative Benefit Plans Today
 Effective March 23, 2010
 Optional coverage of newly eligible prior to 2014 (may be
phased in). Benefits must consist of benchmark or
benchmark-equivalent coverage or full Medicaid State Plan
 Benchmark and benchmark-equivalent benefit coverage for
all enrollees must include family planning services and
supplies and comply with mental health parity
 Benchmark-equivalent coverage must include prescription
drugs and mental health services
Alternative Benefit Plans 2014
 Effective January 1, 2014
 New expansion population of adults required to receive
benefits through a Section 1937 Alternative Benefit
 MAGI eligible adults must receive benefits under
Section 1937 Alternative Benefit Plan
 Any benchmark/benchmark-equivalent plan must
provide at least the essential health benefits as defined
by the Secretary
Alternative Benefit Plans 2014
 Impact
 All States will operate at least one Alternative Benefit Plan
 Each State required to identify EHB plan
 Benchmark plans that can be referenced as EHB
benchmark plans
 State’s largest non-Medicaid HMO
 State’s employee health plan
 FEHPG Blue Cross/Blue Shield plan
 State could also select full Medicaid benefit plan as
coverage package
Alternative Benefit Plans 2014
 Impact
 Allowing multiple Alternative Benefit Plans, EHB reference
 Supplementation of benefits in benchmark may be
required to insure that all EHBs are offered in the State
 No default EHB benchmark plan in Medicaid,
 States required to submit an Alternative Benefit Plan State
Plan Amendment to implement this change
Future Considerations
 Adding the ability for States to offer long-term
services and supports in addition to 1905(a)
services within the Alternative Benefit Plans
 Allowing mandatory enrollment exemptions to
apply to people in the VIII group
 Implementing mental health parity within
Alternative Benefit Plans
 How to keep Alternative Benefit Plans/EHB
 SMD letter – 3/31/06 - Benchmark Benefit Plan Option
(now referred to as Medicaid Alternative Benefit plan)
 SHO letter – 4/9/10 - New Option for Coverage of
 Final rule – 4/30/10 - http://www.gpo.gov/fdsys/pkg/FR2010-04-30/pdf/2010-9734.pdf
 SHO letter – 7/2/11 - Family Planning State Option &
New Benefit Rules for Benchmark Benefit Plans

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