Patients First Medicaid Reform Act


This legislation would put patients in charge of their care and provide them incentives to control their medical dollars.  Although not spelled out in the policy itself, as with all waivers and model legislation, it can be a narrowly targeted pilot program or a full-scale effort to reform the state’s entire Medicaid system, as in Rhode Island.

Patients First Medicaid Reform Act

Section 1. Title.  This Act may be cited as the “Patients First Medicaid Reform Act.”

Section 2. Definitions.

(A)  “Medicaid Savings Account,” or “MSA,” is an account funded by the {insert state Medicaid agency} which can be used for medical expenses and qualifying non-medical expenses as approved by the {insert state Medicaid agency}.

Section 3. Federal Waiver.  The {insert state Medicaid agency} shall seek a Medicaid waiver from the Centers for Medicare and Medicaid Services to receive {insert percentage}  of federal funding as a five-year block grant.

Section 4. Qualifying Policies.

(A.) To qualify, a health insurance policy must meet federal requirements for Health Savings Account (HSA) eligibility.

(B)  Policies must cover federally mandated Medicaid benefits.

(C)  Policies will be exempt from other state mandated benefits.

(D)  HSA-eligible policies available through the state or federal high-risk pool are eligible for those individuals who meet enrollment criteria.

Section 5. Establishment of Benefits.

(A)  The {insert state Medicaid agency} shall establish Medical Savings Accounts for Medicaid enrollees or their families with the {insert state treasurer} (Drafting Note: Accounts may also be established with the state employee retirement system, or with private vendors).

(B)  The amount deposited in an individual’s account shall be equal to the amount required to purchase a qualifying individual or family high-deductible policy and fund a portion of a related HSA.

(1)  This amount shall be adjusted for age and health status.

(2)  Funds shall be made available on a pro-rated basis each month.

(C)  Only high-deductible policies that meet federal requirements to be eligible for an HSA shall be eligible for purchase.

Section 6. Continuation of Benefits.

(A)  A current Medicaid recipient or guardian who becomes employed may continue to receive premium supports and MSA deposits as long as the recipient continues to qualify and keeps the same policy.  Subsidies will phase out with income until the recipient no longer qualifies for Medicaid.

(B)  The employer of a current Medicaid recipient or guardian who enrolls in an employer sponsored insurance policy shall receive premium support payments from the {insert state Medicaid agency}.  Payments will phase out with income until the recipient no longer qualifies for Medicaid.

(C)  A current recipient or guardian shall have the option to continue the same health insurance coverage, without subsidies.

(D)  {Insert percentage} of any unspent funds in an MSA account, including earnings, shall vest to a Medicaid recipient or guardian who no longer qualifies for Medicaid.

Section 7. Other Uses of Funds for Individuals.

(A)  A Medicaid recipient may apply in writing to the {insert state Medicaid agency} to use MSA funds in excess of any insurance out-of-pocket maximum for education, job training, child care, or other qualifying non-medical expenses.

(B)  The {insert state Medicaid agency} shall respond within seven days to each such request and have a final decision within 30 days.

Section 8. Transparency and Accountability.

(A)  All transactions involving the state shall be considered public information and posted in an online database after redaction of personal identifying information.

(B)  The {insert state Medicaid agency} shall provide an annual report on cost savings, use of preventive care services, enrollee transition from Medicaid, and other appropriate information.

Section 9. {Severability Clause.}

Section 10. {Repealer Clause.}

Section 11. {Effective Date.}


Approved by ALEC Board of Directors on September 19, 2010.