Medicaid and SCHIP generally limit the use of beneficiary contribution  requirements. Medicaid allows states to require certain beneficiaries to contribute to the  cost of their coverage by charging premiums and requiring cost sharing. Federal law generally bars  states from requiring beneficiary contributions of certain populations, but  exceptions do exist. Children Were More Likely to Be Subject to Beneficiary Contributions in SCHIP than in Medicaid

In response to our survey, states reported that children were more likely  to be subject to premiums and cost sharing in SCHIP than in Medicaid. Twenty- five states charged cost sharing for children in SCHIP compared to six  states for Medicaid. Premiums

Twenty-six states reported charging premiums for some portion of  children in SCHIP, compared to 9 states for Medicaid: 5 states charged  premiums for some portion of children in both Medicaid and SCHIP, 21  states charged premiums for SCHIP children only, and 4 states charged  premiums for Medicaid children only. Most states that reported charging cost sharing applied copayment  requirements to the six health care services that we considered. 1.) 2.) Copayments were the predominate form of cost sharing for adults, with  states most frequently reporting copayments for adults with disabilities,  noninstitutionalized elderly persons, and parents. The services for which states most frequently reported charging  copayments were physician services and prescription drugs. Copayment amounts varied depending on the service and the state. Across states, copayments ranged from $.50 to $25 for physician services  and prescription drugs. Thirty-Four States Increased and Ten States Decreased the Amount of Beneficiary Contributions

From the beginning of their 2001 state fiscal years through August 1, 2003,  34 states reported increasing and 10 states reported decreasing the amount  of beneficiary contributions they required in Medicaid, SCHIP, or both. For  the states that provided us information on the amount of beneficiary  contribution increases, premium increases to existing requirements  ranged from $2 a month to $39 a month. Other states added new premium  requirements, some of which were as much as several hundred dollars a  month. While no states  reported decreasing their beneficiary contribution requirements for  children in Medicaid, five states decreased these requirements (premiums,  cost sharing, or both) for some portion of children in SCHIP, and five  other states decreased cost sharing requirements for some portion of  adults in Medicaid. Agency Comments

We asked CMS officials to verify the technical accuracy of the statutory  and regulatory information on Medicaid and SCHIP beneficiary  contributions presented in the background section of this report. These  officials provided technical comments, which we have incorporated as  appropriate. Tennessee did not have a SCHIP program. This population includes working adults with disabilities. Population not covered in the state’s Medicaid program.
Why GAO Did This Study

Over 50 million low-income adults and children receive health insurance coverage through Medicaid and the State Children's Health Insurance Program (SCHIP). Federal law allows states to require beneficiary contributions, such as premiums and cost sharing (coinsurance, copayments, and deductibles), for at least some Medicaid and SCHIP beneficiaries. GAO was asked to (1) identify and compare states' Medicaid and SCHIP beneficiary contribution requirements for children, (2) identify states' Medicaid beneficiary contribution requirements for adults, and (3) determine the extent to which states' Medicaid and SCHIP beneficiary contribution requirements have changed since 2001. GAO surveyed Medicaid and SCHIP program offices in the 50 states and the District of Columbia about their beneficiary contribution requirements as of August 2003, including their requirements for specific population groups and for six selected services, such as inpatient hospital, physician services, and prescription drugs. For each population group covered, states were asked to indicate the portion of the group charged beneficiary contributions by selecting "all," "most," "some," or "none." GAO also interviewed officials of the Centers for Medicare & Medicaid Services (CMS) regarding the Medicaid and SCHIP statutory requirements for beneficiary contributions.

What GAO Found

GAO's survey found that children were more likely to be subject to beneficiary contributions, specifically premiums and cost sharing, in SCHIP than in Medicaid. Overall, 26 states reported charging premiums for a portion of children--"some," "most," or "all"--in SCHIP, compared to 9 states in Medicaid. Twenty-five states charged cost sharing for some portion of children in SCHIP, compared to 6 states for Medicaid. States used copayments as the primary form of cost sharing for children. Most states that reported charging cost sharing applied copayment requirements to the six health care services. Most states reported requiring beneficiary contributions from adults enrolled in Medicaid. Twenty-five states charged premiums, generally charging portions of certain populations, such as adults with disabilities. Over 40 states charged cost sharing to most, if not all, adults, including those with disabilities, noninstitutionalized elderly persons, and parents. Copayments were the predominate form of cost sharing. States most frequently reported copayments for prescription drugs and physician services. From the beginning of their 2001 state fiscal years through August 1, 2003, 34 states reported increasing and 10 states reported decreasing the amount of beneficiary contributions required in Medicaid, SCHIP, or both. For the 33 states that provided information on the amount of increases, premium increases to existing requirements ranged from $2 a month to $39 a month. Other states added new premium requirements, some of which were as much as several hundred dollars a month. In most instances, reported copayment increases were generally limited to $5 or less. GAO asked CMS officials to provide technical comments on the statutory and regulatory information on Medicaid and SCHIP beneficiary contributions, which were incorporated as appropriate.