Medicaid Cost-Sharing Under the Deficit Reduction Act of 2005 (DRA)

Publication Date: January 2007

Publisher: Library of Congress. Congressional Research Service

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Research Area: Health

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Abstract:

Under traditional Medicaid, states may require certain beneficiaries to share in the cost of Medicaid services, although there are limits on the amounts that states can impose, the beneficiary groups that can be required to pay, and the services for which cost-sharing can be charged. Prior to DRA, changes to these rules required a waiver. DRA provides states with new options for benefit packages and cost-sharing that may be implemented through Medicaid state plan amendments (SPAs) rather than waiver authority. These rules vary by beneficiary income level and for some types of service. The recently enacted P.L. 109-432 (Tax Relief and Health Care Act of 2006) modified the DRA cost-sharing rules. This report describes the new cost-sharing options and recent state actions to implement these provisions, and will be updated as additional activity warrants.