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HHS FY 2017 Budget in Brief - CMS - Medicaid


Centers for Medicare & Medicaid Services (CMS): Medicaid

Centers for Medicare & Medicaid Services

The Centers for Medicare & Medicaid Services ensures availability of effective, up-to-date health care coverage and promotes quality care for beneficiaries.

CMS Medicaid Budget Overview

(Dollars in millions)

Current Law 2015 2016 2017 2017
+/- 2016
Benefits /1 333,019 348,362 357,618 +9,256
State Administration 16,743 18,868 18,973 +105
Total Net Outlays, Current Law /2 349,762 376,229 376,590 +9,361
Proposed Law 2015 2016 2017 2017
+/- 2016
Legislative Proposals /3 9,100 +9,100
Total Net Outlays, Proposed Law 349,762 376,229 385,690 +18,461
Investment Impact 2015 2016 2017 2017
+/- 2016
Impacts of Program Integrity Investments /4 -121 -121
Total Net Outlays, Proposed Policy 349,762 367,229 385,569 +18,340

Table Footnotes

1/ Includes outlays from the Vaccines for Children Program, administered by the Centers for Disease Control and Prevention.

2/ Includes $4 million in Medicaid outlays in FY 2017 due to a proposed change in mandatory program for a Department of State proposal.

3/ Excludes program integrity investments other than those for Medicaid Fraud Control Units.

4/ Includes the net impact of non-PAYGO savings from the HHS and Social Security Administration program integrity investments on the Medicaid baseline.

Note: Numbers may not add due to rounding.

Medicaid is the primary source of medical assistance for millions of low-income and disabled Americans, providing health coverage to many of those who would otherwise be unable to obtain health insurance. In FY 2015, more than 1 in 5 individuals were enrolled in Medicaid for at least 1 month during the year, and in FY 2017, more than 70 million people on average will receive health care coverage through Medicaid.

How Medicaid Works

Although the federal government establishes general guidelines for the program, states design, implement, and administer their own Medicaid programs. The federal government matches state expenditures on medical assistance based on the federal medical assistance percentage, which can be no lower than 50 percent. In FY 2017, the federal share of current law Medicaid outlays are expected to be approximately $376.6 billion.

Medicaid Enrollment
(person-years in millions)

  2015 2016 2017 2017
+/- 2016
Age 65 and Over 5.6 5.7 5.9 +0.2
Blind and Disabled 10.3 10.4 10.4 +0.1
Children 27.5 27.4 27.5 +0.1
Adults 24.0 25.0 26.3 +1.3
Territories 1.5 1.4 1.4
Total 68.8 69.9 71.6 +1.7

Source: CMS Office of Actuary estimates.
Note: Numbers may not add due to rounding.

States are required to cover individuals who meet certain minimum categorical and financial eligibility standards. Medicaid beneficiaries include children, pregnant women, adults in families with dependent children, the aged, blind, and/or disabled, and individuals who meet certain minimum income eligibility criteria that vary by category. States also have the flexibility to extend coverage to higher income groups, including medically needy individuals through waivers and amended state plans. Medically needy individuals are those individuals who do not meet the income standards of the categorical eligibility groups, but incur large medical expenses such that when subtracted from their income, they fall within the financial eligibility standards.

Under Medicaid, states must cover certain medical services and are provided the flexibility to offer additional benefits to beneficiaries. Medicaid has a major responsibility for providing long-term care services because Medicare and private health insurance often furnish only limited coverage of these benefits.

Recent Program Developments

Affordable Care Act

The Affordable Care Act’s Medicaid expansion, which began on January 1, 2014, allows states to expand Medicaid eligibility to individuals under age 65 with family incomes up to 133 percent of the federal poverty level (or $32,319 for a family of four in calendar year 2016). As of January 2016, 30 states and the District of Columbia have elected to expand Medicaid (Louisiana will make the 31st state).

FY 2014 – Percentage of Medicaid Beneficiaries vs. Federal Medical Assistance Expenditures by Eligibility Group

Status of Medicaid Expansion Decisions Jan 15 2016

The federal government will pay 100 percent of state expenditures related to coverage for newly eligible individuals through calendar year 2016. The federal matching rate will then drop gradually to 90 percent in calendar year 2020, where it will remain. In addition, the Affordable Care Act also strengthens Medicaid program integrity efforts, improves services to Medicaid beneficiaries, and supports home and community-based settings rather than institutions.

Ensure Access to Enhanced Federal Match Rate for Medicaid Expansion States

Medicaid expansion has been proven to expand insurance coverage, reduce the uncompensated care burden on state health care providers and bring additional federal resources into state economies. As of January 2016, 30 states and the District of Columbia have elected to expand Medicaid, and more states are actively discussing expansion (Louisiana will make the 31st state). Through November 2015, an additional 14.1 million individuals have gained Medicaid or CHIP coverage, many of whom would not have been eligible absent Medicaid expansion.

The Budget includes a proposal with an estimated cost of $2.6 billion over 10 years which provides all states, regardless of when they choose to expand Medicaid, the same federal share as states that expanded right away by providing 3 years of full Federal funding for newly eligible adults.

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)

MACRA permanently authorized the Qualified Individual and Transitional Medical Assistance programs and extended Express Lane Eligibility authority through September 2017. The law also delayed Medicaid Disproportionate Share Hospital reductions until FY 2018 and applied an additional reduction in FY 2025.

2017 Legislative Proposals

The FY 2017 Budget includes a package of Medicaid legislative proposals with a net impact to the federal government of $22.2 billion over 10 years by investing in delivery system reform efforts and improving access to high‑quality and cost-effective coverage and services for Medicaid beneficiaries.[1] The Budget also strengthens Medicaid drug coverage and reimbursement and bolsters Medicaid program integrity efforts. Finally, the Budget includes proposals that impact those who are dually eligible for both Medicare and Medicaid.

Support Delivery System Reform

Reestablish the Medicaid Primary Care Payment Increase through Calendar Year 2017 and Include Additional Providers

Effective for dates of service provided on January 1, 2013, through December 31, 2014, states were required to reimburse qualified providers at the rate that would be paid for the primary care service under Medicare. The federal government covered 100 percent of the difference between the Medicaid and Medicare payment rate. This increased payment rate expired at the end of calendar year 2014. This proposal reestablishes the enhanced rate through December 31, 2017, expands eligibility to obstetricians, gynecologists, and non-physician practitioners, including physician assistants and nurse practitioners, and excludes emergency room codes to better target primary care. [$9.5 billion in costs over 10 years]

Add Certain Behavioral Health Providers to the Electronic Health Record Incentive Programs

This proposal expands the Medicare and Medicaid Electronic Health Record Incentive Programs to include psychiatric hospitals, community mental health centers, residential and outpatient mental health and substance use disorder treatment clinics, and psychologists. This expansion will facilitate the integration of behavioral health and medical care and promote the sharing of clinical data needed to provide better patient-centered care. This proposal is described in greater detail in the Medicare chapter. [$4.4 billion in Medicaid costs over 10 years]

Pilot Comprehensive Long-Term Care State Plan Option

This eight-year pilot program would create a comprehensive long-term care state plan option for up to five states. Participating states would be authorized to provide home and community-based care at the nursing facility level of care, creating equal access to home and community-based care and nursing facility care. The Secretary would have the discretion to make these pilots permanent at the end of the eight years. This proposal works to end the institutional bias in long-term care and simplify state administration. [$4.1 billion in costs over 10 years]

Expand Eligibility Under the Community First Choice Option

This proposal provides states with the option to make medical assistance available to individuals who would be eligible under the state plan if they were in a nursing facility. Under the current statutory language, any state interested in the Community First Choice Option must create or maintain a section 1915(c) waiver with at least one waiver service to make the Community First Choice benefit available to the special income group. The 1915(c) waivers are an option available to states to allow long-term care services in home and community-based settings under Medicaid. This process is administratively burdensome for states. This proposal provides equal access to services under the state plan option and provides states with additional tools to manage their long-term care home and community-based service delivery systems. [$3.9 billion in costs over 10 years]

Provide Home and Community-Based Waiver Services to Children Eligible for Psychiatric Residential Treatment Facilities

This proposal provides states with additional tools to manage children’s mental health care service delivery systems by expanding the non-institutional options available to these Medicaid beneficiaries. By adding psychiatric residential treatment facilities to the list of qualified inpatient facilities, this proposal provides access to home and community-based waiver services for children and youth in Medicaid who are currently institutionalized and/or meet the institutional level of care. Without this change to provisions in the Social Security Act, children and youth who meet this institutional level of care do not have the choice to receive home and community-based waiver services and can only receive care in an institutional setting where residents are eligible for Medicaid. This proposal builds upon findings from the five‑year Community Alternatives to Psychiatric Residential Treatment Facilities Demonstration Grant Program authorized in the Deficit Reduction Act of 2005 that showed improved overall outcomes in mental health and social support for participants with average cost savings of $36,500–$40,000 per year per participant. [$1.6 billion in costs over 10 years]

Allow States to Develop Age-Specific Health Home Programs

The Affordable Care Act includes a provision that allows states to create Health Homes for Medicaid enrollees with chronic conditions. Under a Health Home program, states can develop a comprehensive system of care coordination for the purpose of integrating and coordinating all primary, acute, behavioral health, and long‑term services and supports to treat the whole person. States receive an increased federal match for Health Home services for the first eight quarters of their program. This proposal allows states to target their Health Home programs by age. Currently, states are required to cover Health Home services for all categorically needy individuals with the specified chronic condition(s), regardless of age. Many states have voiced support for allowing age‑specific targeting of their Health Home model to better serve the needs of youth with chronic conditions. [$1.1 billion in costs over 10 years]

Expand Eligibility for the 1915(i) Home and Community-Based Services State Plan Option

This proposal increases states’ flexibility in expanding access to home and community-based services under section 1915(i) of the Social Security Act. Currently, certain non-categorically eligible individuals who meet the needs-based criteria can only qualify for home and community-based services through the 1915(i) state plan option if they are also eligible for home and community-based services through a waiver program. This proposal removes this requirement, which will reduce the administrative burden on states and increase access to home and community-based services for the elderly and individuals with disabilities. [$374 million in costs over 10 years]

Allow Full Medicaid Benefits for Individuals in a Home and Community-Based Services State Plan Option

This proposal provides states with the option to offer full Medicaid eligibility to medically needy individuals who access home and community-based services through the state plan option under section 1915(i) of the Social Security Act. Currently, when a state elects to not apply the community income and resource rules for the medically needy, these individuals can only receive 1915(i) services and no other Medicaid services. This option will provide states with more opportunities to support the comprehensive health care needs of individuals with disabilities and the elderly. [$9 million in costs over 10 years]

Improve Access to Coverage and Services

Create State Option to Provide 12-Month Continuous Medicaid Eligibility for Adults

Currently, individuals enrolled in Medicaid are required to report changes in income, assets, or other life circumstances that may affect eligibility between regularly scheduled redeterminations. This proposal creates a state plan option to allow 12 months of continuous eligibility for individuals who would otherwise be at risk of moving between insurance coverage, often referred to as churning, which disrupts existing provider relationships and increases the odds of becoming uninsured. States already have a state plan option for continuous eligibility for children in Medicaid and CHIP and that authority would be broadened to include all adults or, at state option, only adults determined eligible for Medicaid on the basis of Modified Adjusted Gross Income. [$11.1 billion in net federal costs, including $34.9 billion in Medicaid costs over 10 years]

Require Full Coverage of Preventive Health and Tobacco Cessation Services for Adults in Traditional Medicaid

The Budget will require coverage of preventive health services as defined in section 2713 of the Public Health Service Act without cost sharing for all adults enrolled in the Medicaid program and also expand section 4107 of the Affordable Care Act, which provides tobacco cessation services (including counseling) to pregnant women, to all Medicaid eligible populations. Such services are already required for most other populations without cost sharing, including individuals in private health plans, the Medicaid expansion population, and various other Medicaid beneficiaries. [$789 million in costs over 10 years]

Permanently Extend Express Lane Eligibility for Children

The Children’s Health Insurance Program Reauthorization Act authorized Express Lane Eligibility under which state Medicaid or CHIP agencies can use another public program’s eligibility findings to streamline eligibility and enrollment into Medicaid or CHIP. MACRA extended the authorization to use Express Lane Eligibility through September 30, 2017. As of January 1, 2016, 14 states and 1 territory used this authority to partner with programs like the Supplemental Nutrition Assistance Program or Temporary Assistance for Needy Families to identify, enroll, and retain children who are eligible for Medicaid or CHIP. The Budget supports a permanent extension of this tool to aid states in furthering their efforts to enroll Medicaid and CHIP eligible children. [$870 million in costs over 10 years]

Require Coverage of Early and Periodic Screening, Diagnostic and Treatment Benefit for Children in Inpatient Psychiatric Treatment Facilities

While Medicaid coverage is available for children and young adults under age 21 receiving inpatient psychiatric services, these individuals are excluded from coverage of comprehensive preventive and medically necessary items and services to which Medicaid enrolled children are otherwise entitled. This proposal would lift the federal Medicaid exclusion of comprehensive children’s coverage to reduce the financial burden on states and Medicaid families and encourage the provision of critical mental health services to children in Medicaid. [$505 million in costs over 10 years]

Provide Full Medicaid Coverage to Pregnant and Postpartum Beneficiaries

A statutory restriction in the Social Security Act currently allows states to limit coverage for certain eligibility groups in Medicaid to “pregnancy-related services,” rather than providing full state plan benefits. CMS has issued regulations and guidance informing states that they are expected to provide comprehensive coverage to all pregnant beneficiaries, however, limitations on coverage for pregnant women persist in seven states. This proposal ensures that all pregnant and post-partum Medicaid beneficiaries have access to full Medicaid benefits. [$375 million in costs over 10 years]

Extend 100 Percent Federal Match to All Indian Health Programs

Strengthen Medicaid in Puerto Rico and the U.S. Territories

Federal Medicaid expenditures to the U.S. Territories are currently capped at low levels, despite much lower incomes and higher poverty rates than the mainland. While the Affordable Care Act provided $7.3 billion in additional Medicaid funding to the Territories (including $6.4 billion for Puerto Rico), Puerto Rico is projected to exhaust its enhanced funding by the end of FY 2017. Inaction would lead to drastic Medicaid cuts that will exacerbate the fiscal crisis in the Commonwealth.

As part of the Administration’s roadmap to financial stability for Puerto Rico, this proposal lifts the federal cap on Medicaid funding to the Territories, expands eligibility to 100 percent of the Federal Poverty Level in territories currently below this level, raises the federal Medicaid share from 55 to 60 percent immediately, and provides financial incentives to modernize the Medicaid programs in Puerto Rico and the Territories. Under this proposal, once Puerto Rico and the Territories have ensured robust financial oversight and full mandatory benefits, including long-term care, they will become eligible for the same share of federal financial support permitted for states (83 percent).

Currently, the Medicaid statute provides that a 100 percent federal match rate applies to all services provided to American Indians and Alaskan Natives for Medicaid services “received through an Indian Health Service (IHS) facility, whether operated by [IHS] or by an Indian tribe or tribal organization,” which notably excludes urban Indian health programs. This proposal ensures that Medicaid services provided to American Indians and Alaskan Natives within the whole scope of the IHS/Tribal/Urban service delivery network are eligible for full federal financing. [$80 million in costs over 10 years]

Expand State Flexibility to Provide Benchmark Benefit Packages

States currently have the option to provide certain populations with alternative benefit packages called benchmark or benchmark-equivalent plans. This proposal provides states the flexibility to allow benchmark-equivalent benefit coverage for non‑elderly, non-disabled adults with income that exceeds 133 percent of the federal poverty level. [No budget impact]

Streamline Certain Medicaid Appeals Processes

Current law restricts states’ ability to streamline and coordinate certain Medicaid appeals processes. This proposal increases flexibility for states in arranging their fair hearings functions and allows individuals to have a more coordinated and streamlined Medicaid fair hearings process by eliminating the requirement to provide a fair hearing at the Medicaid state agency for certain types of appeals when a state has opted to delegate Medicaid fair hearings to a Marketplace appeals entity or the Secretary. [No budget impact]

Improve Quality and Cost-Effectiveness

Extend Funding for the Medicaid Adult Health Quality Measures Program

This is a Medicaid proposal with costs to the Program Management account. See the Program Management chapter for more information.

Require Remittances for Medical Loss Ratios for Medicaid and CHIP Managed Care

This proposal gives CMS explicit authority to apply a medical loss ratio of 85 percent to Medicaid and CHIP managed care plans that includes a requirement that states collect a remittance of any amounts spent in excess of the medical loss ratio and returns the federal share to the federal government. This proposal aligns Medicaid with Medicare Advantage and private insurance requirements and builds on the policies in the proposed rule on Medicaid managed care published in June 2015. [$23.5 billion in savings over 10 years]

Rebase Future Medicaid Disproportionate Share Hospital Allotments

As the number of uninsured individuals decreases due to the coverage expansions under the Affordable Care Act, uncompensated care costs for hospitals will also decrease, reducing the level of Disproportionate Share Hospital funding needed. Current law extends and revises the aggregate Disproportionate Share Hospital funding reductions through FY 2025, but in FY 2026, allotments revert to levels that had been in effect prior to the Affordable Care Act. This proposal determines future allotments based on states’ actual prior year allotments as reduced by the Affordable Care Act and subsequent legislation. [$6.6 billion in savings over 10 years]

Strengthen Medicaid Drug Coverage and Reimbursement

Create a Federal-State Medicaid Negotiating Pool for High-Cost Drugs

This proposal allows CMS and participating states to work together to curb spending on high-cost drugs. Currently, states may negotiate supplemental rebates, but CMS does not have the authority to facilitate negotiation with drug manufacturers on high-cost drugs. As a result, the federal government and states lose billions of dollars in supplemental rebates each year. This proposal will allow CMS and participating state Medicaid programs to partner with a private sector contractor to negotiate supplemental rebates from drug manufacturers. [$5.8 billion in savings over 10 years]

Lower Medicaid Drug Costs and Strengthen the Medicaid Drug Rebate Program

The Budget includes a series of targeted policies to both lower drug costs and improve drug coverage in Medicaid. First, the Budget clarifies the definition of brand drugs to prevent inappropriately low rebates. It excludes authorized generic drugs from calculations used to determine brand-name rebates. Additionally, the Budget corrects a technical error to the Affordable Care Act rebate for new drug formulations and exempts abuse deterrent formulations from the definition of “line extension” to incentivize continued development of abuse deterrent formulations. The Budget also limits to 12 quarters the timeframe for which manufacturers can dispute drug rebate amounts and clarifies the inclusion of certain prenatal vitamins and fluorides in the rebate program. The Budget also exempts emergency drug supply programs from the Medicaid rebate calculations. Finally, the Budget improves Medicaid drug pricing by calculating Medicaid Federal Upper Limits based only on generic drug prices. [$5.6 billion in savings over 10 years]

Strengthen the Integrity of the Medicaid Program

Promote Program Integrity for Medicaid Drug Coverage

The Budget enhances program integrity for the Medicaid prescription drug program in five ways. First, it eliminates incentives to improperly report information by requiring manufacturers to make drug rebates equal to the amount states pay for drugs in cases where a manufacturer either improperly reported to CMS non‑drug products as covered outpatient drugs or improperly identified reported drugs as being effective when the Food and Drug Administration (FDA) has identified the drugs as less than effective through its Drug Efficacy Study. Second, it enhances existing enforcement and compliance with drug rebate requirements by allowing more regular audits and surveys of drug manufacturers where cost effective. Third, it requires drugs to be electronically listed with FDA in order for them to be eligible for Medicaid coverage, thereby aligning Medicaid drug coverage requirements with Medicare drug coverage requirements. Fourth, it increases penalties for fraudulent noncompliance on rebate agreements—particularly where drug manufacturers knowingly report false information under their drug rebate agreements. Finally, these proposals provide CMS the authority to collect wholesale acquisition costs for all Medicaid-covered drugs to ensure accurate reporting of average manufacturer prices. [No budget impact]

Cut Fraud, Waste, Abuse, and Improper Payments in Medicaid

The Budget includes a number of Medicaid program integrity proposals that strengthen the Department’s and states’ ability to fight fraud, waste, and abuse in the Medicaid program and to reduce improper payments. The Program Integrity chapter describes these proposals, and their impact is accounted for either in this chapter or in the State Grants and Demonstrations chapter. [$790 million in savings over 10 years]

Legislative Proposals for Medicare-Medicaid Enrollees

The Budget includes four proposals to improve the quality and efficiency of care for Medicare-Medicaid, dually-eligible beneficiaries.

Improve Alignment of Medicare Savings Program and Part D Low-Income Subsidy Income and Asset Definitions

Many of the same beneficiaries qualify for Medicare Savings Programs and Part D Low-Income Subsidies, but under current law have to go through separate and partially duplicative income and asset tests before they can receive benefits. This proposal adjusts the definitions of countable income and assets used to determine eligibility for Medicare Savings Programs to bring them into greater alignment with those used to determine eligibility for Part D Low‑Income Subsidies. This will increase access to these valuable support programs for vulnerable beneficiaries and simplify eligibility determinations for a number of states. [$394 million in Medicaid costs over 10 years]

Ensure Retroactive Part D Coverage of Newly Eligible Low-Income Beneficiaries

This proposal permanently authorizes a current demonstration that allows CMS to contract with a single plan to provide Part D coverage to low-income beneficiaries while their eligibility is processed. This plan serves as the single point of contact for beneficiaries seeking reimbursement for retroactive claims. Under current law, these beneficiaries are assigned at random to a qualifying Part D plan, which is reimbursed based on the standard Part D prospective payment, regardless of their utilization of Part D services during this period. Under the demonstration, the plan is paid using an alternative methodology whereby payments are closer to actual costs incurred by beneficiaries during this period. An on-going current demonstration, which was recently extended through 2019, has shown the proposed approach to be less disruptive to beneficiaries. [$100 million in Medicare costs over 10 years]

Allow for Federal/State Coordinated Review of Dual Eligible Special Need Plan Marketing Materials

This proposal introduces flexibility to rules around the review of marketing materials provided by Dual Special Needs Plans to beneficiaries. Under existing statute, all marketing materials provided by these plans to beneficiaries must be reviewed by CMS staff for accuracy, content, and other stated requirements. Because these plans also market to Medicaid beneficiaries, many of the same marketing materials must also go through a separate review from a state Medicaid agency for compliance with a different set of rules and regulations. Providing CMS with the ability to perform coordinated reviews of these marketing materials for compatibility with a unified set of standards will potentially improve the quality of the products available to beneficiaries, while also reducing the burden on CMS and the states. [No budget impact]

Integrate the Appeals Process for Medicare-Medicaid Enrollees

Medicare and Medicaid have different appeals processes governed by different provisions of the Social Security Act, resulting in different requirements related to timeframes and limits, amounts in controversy, and levels of appeals. At times, these requirements may conflict and can result in confusion for beneficiaries and inefficiencies and administrative burdens for states and providers. This proposal provides authority for the Secretary to implement a streamlined appeals process to more efficiently integrate Medicare and Medicaid program rules and requirements, while maintaining the important beneficiary protections included in both programs. [No budget impact]

Multi-Agency Proposals

Expand the Certified Community Behavioral Health Clinic Demonstration

This proposal would expand the Certified Community Behavioral Health Clinic Demonstration established by section 223 of the Protecting Access to Medicare Act of 2014 to an additional 6 states. The Demonstration is designed to increase reimbursement for high‑quality, community‑based, ambulatory mental health and substance use disorder services. This proposal is part of the broader set of new mental health investments described in the Budget in Brief overview. [$110 million in costs over 10 years]

Establish Hold Harmless for Federal Poverty Guidelines

To protect access to programs, including Medicaid, for low income families and individuals, this proposal would treat the Consumer Price Index for All Urban Consumers adjustment for the poverty guidelines consistent with the treatment of the annual cost of living adjustments for Social Security Benefits. The poverty guidelines would only be adjusted when there is an increase in the Index, not a decrease. [No budget impact]

FY 2017 Medicaid Legislative Proposals

Dollars in Millions 2017 2017
-2021
2017
-2026
Support Delivery System Reform      
Reestablish the Medicaid Primary Care Payment Increase Through CY 2017 and Include Additional Providers 7,610 9,510 9,510
Add Certain Behavioral Health Providers to the Electronic Health Record Incentive Programs (Medicaid Impact) 3,800 4,440
Pilot Comprehensive Long-Term Care State Plan Option 0 3,181 4,054
Expand Eligibility Under the Community First Choice Option 255 1,582 3,866
Provide Home and Community-Based Waiver Services to Children Eligible for Psychiatric Residential Treatment Facilities 584 1,609
Allow States to Develop Age-Specific Health Home Programs 210 690 1,100
Expand Eligibility for the 1915(i) Homes and Community-Based Services State Plan Option 7 124 374
Allow Full Medicaid Benefits to All Individuals in a Home and Community Based Services (HCBS) State Plan Option 4 9
Improve Access to Coverage and Services      
Create State Option to Provide 12-Month Continuous Medicaid Eligibility for Adults (non-add) /1 467 4,731 11,135
Medicaid Impact 800 13,000 34,900
Treasury Impact (non-add) -333 -8,269 -23,765
Strengthen Medicaid in Puerto Rico and the U.S. Territories 320 9,315 29,644
Extend Enhanced Federal Match for New Medicaid Expansion States 430 2,300 2,610
Permanently Extend Express Lane Eligibility Option for Children 235 870
Require Full Coverage of Preventive Health and Tobacco Cessation Services for Adults in Traditional Medicaid 99 450 789
Create Demonstration to Address Over-Prescription of Psychotropic Medications for Foster Care Children /2 119 624 567
Require Coverage of Early and Periodic Screening, Diagnostic, and Treatment for Children in Inpatient Psychiatric Treatment Facilities 35 215 505
Provide Full Medicaid Coverage to Pregnant and Postpartum Beneficiaries 30 165 375
Extend 100 Percent Federal Match to All Indian Health Programs 6 34 80
Expand State Flexibility to Provide Benchmark Benefit Packages
Streamline Certain Medicaid Appeals Processes
Improve Quality and Cost-Effectiveness      
Extend Funding for the Adult Health Quality Measures Program (non-add) /3 14 70 70
Require Remittances for Medical Loss Ratios for Medicaid and CHIP Managed Care -5,100 -23,500
Rebase Future Medicaid Disproportionate Share Hospital Allotments 0 0 -6,640
Strengthen Medicaid Drug Coverage and Reimbursement      
Create a Federal-State Medicaid Negotiating Pool for High-Cost Drugs -200 -2,510 -5,830
Lower Medicaid Drug Costs and Strengthen the Medicaid Drug Rebate Program -481 -2,670 -5,616

Correct the Affordable Care Act Medicaid Rebate Formula for New Drug

Formulations and Exempt Abuse Deterrent Formulations (non-add)
-410 -2,085 -4,285

Exclude Brand and Authorized Generic Drug Prices from the Medicaid

Federal Upper Limits (non-add)
-30 -370 -870

Clarify the Definition of Brand Drugs to Prevent Inappropriately Low Rebates

(non-add)
-21 -115 -260

Exclude Authorized Generics from Medicaid Brand-Name Rebate

Calculations (non-add)
-20 -100 -200

Exempt Emergency Drug Supply Programs from Medicaid Drug Rebate

Calculation (non-add)

Limit Dispute Resolution Timeframe in the Medicaid Drug Rebate Program

to Twelve Quarters (non-add)

Require Coverage of Prescribed Prenatal Vitamins and Fluorides under the Medicaid Drug Rebate Program
(non-add)

Strengthen the Integrity of the Medicaid Program      
Promote Program Integrity for Medicaid Drug Coverage

Enforce Manufacturer Compliance with Drug Rebate Requirements
(non‑add)

Increase Penalties on Drug Manufacturers for Fraudulent Noncompliance

with Medicaid Drug Rebate Agreements (non-add)

Require Drugs be Properly Listed with FDA to Receive Medicaid Coverage

(non-add)

Require Manufacturers that Improperly Report Items for Medicaid Drug

Coverage to Fully Repay States (non-add)

Require Drug Wholesalers to Report Wholesale Acquisition Costs to CMS

(non‑add)
Cut Fraud, Waste, Abuse, and Improper Payments in Medicaid /4 -32 -330 -790
Total Outlays, Medicaid Proposals 9,208 35,204 52,927
       
Medicare-Medicaid Enrollee Proposals      
Improve Alignment of Medicare Savings Program and Part D Low-Income Subsidy Income and Asset Definitions 31 169 394

Ensure Retroactive Part D Coverage of Newly Eligible Low-Income

Beneficiaries (Medicare Impact) (non-add)
20 100
Allow for Federal/State Coordinated Review of Dual Special Need Plan Marketing Materials
Integrate Appeals Process for Medicare-Medicaid Enrollees
Total Outlays, Medicare-Medicaid Enrollee Proposals 31 169 394
Medicaid Interactions      
Provide States Option to Eliminate Medicaid Assignment of Cash Medical Support /5 36 162
Extend Special Immigrant Visa Program /6 32 65
Expand the Certified Community Behavioral Health Clinic Demonstration /7 20 110 110
Extend Supplemental Security Income (SSI) Time Limits for Qualified Refugees /8 12 25 25
Extend CHIP Funding through 2019 /9 -5,560 -5,560
Prohibit Brand and Generic Drug Manufacturers from Delaying the Availability of New Generic Drugs and Biologics /10 -120 -620 -1,380
Eliminate the 190-Day Lifetime Limit on Inpatient Psychiatric Facility Services /10 -50 -310 -720
Modify Length of Exclusivity to Facilitate Faster Development of Generic Biologics /10 -30 -130
Eliminate Medicaid Recoupment of Birthing Costs from Child Support /5
Establish Hold-Harmless for Federal Poverty Guidelines
Total Outlays, Medicaid Interactions -138 -6,307 -7,368
       
Total Outlays, Medicaid Legislative Proposals 9,100 29,065 45,953
       
Total Outlays, Total Federal Impact /11 8,767 20,796 22,188


Legislative Proposals Tables Footnotes

1/ The score reflects the impact on Medicaid, other HHS programs, and U.S. Department of Treasury programs and accounts.

2/ This is a joint proposal with the Administration for Children and Families (ACF). The score reflects the impact on the Medicaid baseline. Please see the ACF and State Grants and Demonstration chapters for more information on this proposal.

3/ This proposal reflects costs to the Program Management account. See the Program Management chapter for more information.

4/ This includes proposals described in the Program Integrity chapter, excluding savings not subject to PAYGO and excluding the proposal to Expand Funding for the Medicaid Integrity Program, which is described in the Program Integrity chapter but accounted for in the tables in the State Grants and Demonstrations chapter.

5/ This proposal is included in the Administration for Children and Families’ FY 2017 Budget Request.

6/ This proposal is included in the State Department's FY 2017 Budget Request. Total excludes $4 million in Medicaid outlays in FY 2017 due to a proposed change in a mandatory program for a Department of State proposal.

7/ This proposal is part of the Administration's broader investments to expand mental health described in the Budget in Brief overview.

8/ This proposal is included in the Social Security Administration's FY 2017 Budget Request.

9/ See Children’s Health Insurance Program (CHIP) chapter for proposal description.

10/ See Medicare chapter for proposal description.

11/ The total federal impact reflects $23.8 billion in savings to the Marketplace subsidies and related impacts included in the Department of Treasury programs and accounts.


1 Hartman, Micah, et al. National Health Spending In 2013: Growth Slows, Remains In Step With The Overall Economy. Journal of Health Affairs. December 2014. http://content.healthaffairs.org/content/34/1/150

2 This includes $23 billion in savings to the Marketplace subsidies and related impacts reflected in the Department of Treasury programs and accounts.

3 The U.S. Supreme Court’s 1999 landmark decision in Olmstead v. L.C. (Olmstead) found the unjustified segregation of people with disabilities is a form of unlawful discrimination under the Americans with Disabilities Act (ADA). Olmstead requires States to administer programs in the most integrated setting appropriate to the needs of qualified individuals with disabilities.



[1] This includes $46.0 billion in Medicaid investments offset by $23.8 billion in savings to Marketplace subsidies and related impacts, reflected in the Department of Treasury program and accounts.

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Content created by Office of Budget (OB)
Content last reviewed on January 26, 2017