December 19, 2005
Details on the State Option for a Reduced Alternative Benefit Package
Note: This page provides background information to NAMI E-News, 12/19/2005.
The final legislation maintains portions of a provision in the House passed
version of S 1932 that will allow states to offer a reduced alternative Medicaid
benefit package that can exclude certain mandatory and optional services that
states have previously been required to provide to all eligible populations
(both mandatory and optional eligibility populations).
This alternative package option for states would leave most screening and early
intervention services for children in poverty at extreme risk. Currently, Medicaid
EPSDT services ensure that low-income children receive the comprehensive mental
illness and physical illness treatment services they need. EPSDT (Early Periodic
Screening Diagnosis and Treatment) is an early intervention focused program
that targets at-risk children
The final version of the bill will allow states to replace EPSDT for 28 million
Medicaid children with potentially far fewer benefits under the State Childrens
Health Insurance Program (SCHIP). Congress enacted SCHIP as an add-on to EPSDT,
not as a substitute. SCHIP benefits standards in the legislation are much weaker
than EPSDT coverage. States are permitted to determine services to be covered,
so long as the State's plan meets or is actuarially equivalent to a benchmark
plan or a plan approved by HHS. Some benchmark plans could result in significantly
reduced coverage if adopted.
The final agreement will erode the Medicaid safety net by creating an incentive
for states to provide less than comprehensive coverage as provided through EPSDT.
Children's services will now be vulnerable to State fiscal pressures. Children
with mental illness are particularly vulnerable in this process. For example,
in 2003, Texas severely limited mental health coverage for SCHIP children (recently
rescinded by the legislature). New Hampshire limits inpatient mental health
services to 15 days per year. Colorado limits outpatient mental health services
to 20 annual visits. Families with children who need more coverage will not
be able to pay for it.
The alternative package would have to meet certain standards and be at least
equivalent to other health plans in the market place such as the largest HMO
in the state or the plan offered to state employees. Further, states would NOT
be allowed to offer this alternative scaled back plan to specific categories
of Medicaid beneficiaries including:
- Individuals deemed "blind or disabled" (regardless of whether
the state follows the federal SSI definition or not),
- Children in mandatory categories (including children on SSI),
- Pregnant women,
- Individuals dually eligible for Medicare and Medicaid,
- Terminally ill in hospice care,
- Most institutionalized individuals (i.e. recipients in nursing homes, ICF-MRs,
long-term psychiatric hospitals),
- Individuals who qualify for long-term care (as defined by the state), and
- Individuals deemed “medically frail” or “special needs.”
Back to NAMI E-News, 12/19/2005
