Healthcare finance executive Danny McClary is the CFO of Community Health Systems, where he has direct operational management for an $80 million provider. A proponent of healthcare reform, Danny McClary has a deep understanding of Medicaid and its associated cost sharing rules.
States can charge premiums and require cost sharing by Medicaid enrollees. These costs have to be paid out of pocket and can include deductibles, coinsurance, and copayments. However, these costs are limited to nominal amounts and cannot exceed state payments for that service.
For example, states can charge eligible populations limited copayments for institutional care or non-emergency use of emergency rooms. These copayments can be fixed at a percentage of the cost of the agency, say 10 percent, or at a dollar value, say $75 for institutional care. States can also add additional charges for drugs to promote the use of certain drugs. For example, a state may have a preferred and non-preferred drug list, with copayment charges applying to the latter. Patients are usually informed which drugs are preferred and which are not.
Not all Medicaid enrollees, however, are eligible to cost share. There are exempt groups such as children below age 18, people living in institutions who contribute all their income to the cost of care, and people getting hospice care. Further, certain services are exempt from cost sharing. These include emergency services, preventive children’s services, pregnancy-related services, and family planning services.
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