March 18, 2008

Centers for Medicare and Medicaid Services

Department of Health and Human Services

Attention: CMS-2232-P and CMS-2244-P

P.O. Box 8016

Baltimore, MD 21244-8016

**Re: Medicaid Premiums and Cost Sharing Proposed Rule, 73 Fed. Reg.
9727 (February 22, 2008); and State Flexibility for Medicaid Benefit
Packages Proposed Rule, 73 Fed. Reg. 9714 (February 22, 2008)**

The undersigned organizations are pleased to submit these comments on
CMS's Proposed Rules for the Medicaid Premiums and Cost Sharing changes
and the State Flexibility for Medicaid Benefits Packages changes as
passed in the Deficit Reduction Act of 2006.

The Deficit Reduction Act of 2006 (DRA) made some of the most
substantial and harmful changes to the Medicaid program since its
inception. Among these changes are two provisions concerning cost
sharing and premiums and benefit packages that will have a direct and
detrimental impact on people enrolled in Medicaid. The undersigned
organizations are concerned about the negative impact that the DRA
changes and these implementing regulations will have on both children
and adults who are eligible for and receiving Medicaid.

**[Concerns about the Rules]{.underline}**

**Cost Sharing and Premiums**

**447.54 Increasing allowable cost sharing will cause Medicaid
beneficiaries to**

> **delay or forgo necessary health care.**

In its analysis of the cost sharing provisions of the DRA, the
Congressional Budget Office (CBO) projected that some 13 million
people---a third of them children---could face new or increased cost
sharing over the first ten years the provision is in effect. Eighty
percent of the savings expected to result from the new cost sharing
would be due to decreased use of services. Extensive research has shown
that even moderate levels of cost sharing---of the amounts permitted by
this provision---cause Medicaid beneficiaries to delay or forgo needed
care.

In addition to these concerns, we object to the language in the
regulation that will require annual adjustments to cost sharing limits
(based on the increase in medical CPI) to be rounded to the nearest 10
cents, as well as the proposed manner of conducting the adjustments. The
10 cent rounding standard is too high; a 5 cent standard is used in
Medicare and should also be used in Medicaid. The regulations propose to
base each year's adjustment on the previous year's *rounded* limit,
rather than the previous year's limit pre-rounding. This method inflates
the cost sharing limits faster and higher than we believe was originally
intended in the DRA. Instead, each year's actual limit (pre-rounding)
should be used as the base to which the adjustment is made, *then* the
resulting amount should be rounded.

**447.64 Allowing states to charge premiums or enrollment fees will
prevent**

> **otherwise eligible individuals from accessing Medicaid benefits.**

According to CBO estimates, fully 20 percent of the savings expected to
result from premiums and enrollment fees would accrue from people who
lose Medicaid coverage because they are unable to pay the new premiums.
More than half of those who are expected to lose coverage are children.
Experience from states that have obtained waivers in order to require
premiums for Medicaid coverage shows that these changes almost always
lead to enrollment declines. Medicaid is the safety net for these
individuals, and paying premiums should not be a condition of coverage;
most people who lose coverage will become uninsured.

**447.71 The limit on out of pocket spending---5 percent of monthly or
quarterly income---is too high and will be unaffordable for many
beneficiaries.**

As mentioned above, even the smallest amounts of cost sharing can pose a
significant barrier to low-income individuals. The Medicaid population
by definition has significant health care needs, and if they cannot
afford the cost-sharing and premiums required to maintain Medicaid
coverage, they will delay care. This may save money over the short term,
but people who go without needed care will eventually present in the
emergency room with complicated, costly conditions that could have been
prevented with earlier medical attention.

Further, most states require families in SCHIP to track their own out of
pocket spending to prove they have met the 5 percent of income limit.
Presumably states would also use this "shoebox" method with any Medicaid
cost sharing changes. At a minimum, states should be required to track
out of pocket spending for families, who will already be under enough
burden having to come up with the additional money for cost-sharing and
premiums.

**447.80 Allowing providers to turn away Medicaid beneficiaries who are
unable to pay the required cost sharing is an unnecessary barrier to
care.**

Even in states that do not raise cost sharing amounts, they could choose
to make existing cost sharing requirements enforceable. Individuals may
be denied medically necessary care to which they are entitled because of
an inability to pay the required cost sharing. The serious problems
associated with delaying or forgoing care have already been highlighted
above. Enforceability would exacerbate the barriers increased
cost-sharing and premiums already present for low-income populations.

**State Flexibility for Medicaid Benefit Packages**

**440.330 The benchmark coverage plans are inadequate and present an
array of serious problems for Medicaid beneficiaries.**

Allowing states to "tailor" benefit packages means that individuals may
not have access to the services they need. States' experimentation with
tailoring benefit packages using waivers has led to packages that lack
vital services such as hospital care, specialist care, mental health
coverage, and substance abuse treatment. Benefit packages designed
outside the important consumer protections in traditional Medicaid may
fail to meet beneficiaries' needs, and will not save money over the long
run if these individuals experience significant unmet needs that
escalate into problems that require treatment in emergency rooms.

**440.335 Benchmark-equivalent plans allow the Secretary to approve
plans with little or no standards.**

Although the first four standards for benchmark plans---the Federal
Employees Health Benefit Plan, the state's state employee health benefit
plan, the HMO with the largest non-Medicaid enrollment in the state, or
the actuarial equivalent of one of these three plans---may fall short of
beneficiaries' needs, the final option for Secretary-approved coverage
means that coverage of any kind, that includes or exclude any benefits
the state chooses, could qualify. This failure to recognize any minimum
set of required benefits in Medicaid could limit access to critical
health care services. Extensive research and recent experience have
shown that Medicaid benefit cuts result in significant delays and loss
of access to necessary health care.

**440.345 Assuring children's access to EPSDT services is an essential
component of Medicaid and must be preserved. The wrap-around structure
allowed may be needlessly complicated and cause children to miss needed
care.**

Allowing children, who are entitled to EPSDT benefits, to enroll in
benchmark benefit packages is inappropriate. Although these children
would theoretically receive a wrap-around for additional services needed
to fulfill the EPSDT requirements, this is needlessly complicated and
creates a more complex, disjointed system of delivery for children.
Changes like these that make accessing Medicaid benefits more
complicated, instead of easier, only save money because children get
fewer benefits than they would in a streamlined system. Children should
not be permitted to enroll in benchmark benefit packages.

**440.390 Non-emergency Medical Transportation (NEMT) is an essential
service for many Medicaid beneficiaries, particularly those living in
rural areas. There is nothing in the DRA that suggests Congressional
intent to remove this from the list of required services.**

Although not a statutory benefits category, NEMT has always been a
required service in Medicaid, because it is essential in assuring many
beneficiaries access to medically necessary health services. This is
particularly true for beneficiaries who live in rural areas where
providers are few and far between. There is nothing in the DRA that
specifically suggests that NEMT should no longer be a required service,
and we believe the interpretation in the proposed regulations oversteps
the intent of Congress in enacting the benchmark benefit provisions.
Permitting benefit packages that exclude NEMT will erect yet another
barrier between Medicaid beneficiaries and the health care services they
need.

**Signed,**

AFL-CIO

AFSCME

American Federation of State, County & Municipal Employees

Association for Community Affiliated Plans

Child Welfare League of America

Children's Defense Fund

Children\'s Dental Health Project

Colorado Center on Law and Policy

Colorado Children's Campaign

Colorado Cross Disability Coalition

Community Transportation Association of America

Connecticut Association for Human Services

Easter Seals

Families USA

Jewish Community Relations Council of St. Louis

Jewish Council for Public Affairs

Mental Health America

National Education Association

National Health Law Program

National Hemophilia Foundation

National Senior Citizens Law Center

New Mexico Center on Law and Poverty

New York AIDS Coalition

RESULTS

Service Employees International Union

United Jewish Communities

Utah Health Policy Project

Voices for America\'s Children