Medicaid was established in 1965 to provide basic medical services to certain low-income populations. It is a means-tested entitlement program that financed the delivery of primary and acute medical services, as well as long-term services and supports, to more than an estimated 72 million people in FY2012. Below is a description of services available for Medicaid beneficiaries by eligibility classification. The Patient Protection and Affordable Care Act (ACA; P.L. However, on June 28, 2012, the United States Supreme Court issued a decision in National Federation of Independent Business v. Sebelius . Examples of optional benefits for such Medicaid groups include prescribed drugs, physician-directed clinic services, services of other licensed practitioners (e.g., chiropractors, podiatrists, psychologists) services, nursing facility services for individuals under age 21, physical therapy, and prosthetic devices. Table 2 provides additional information for selected optional benefits covered by most states under the traditional Medicaid program. The breadth of coverage for a given benefit can and does vary from state to state, even for mandatory benefits. Medicaid Benchmark Benefit Packages

As an alternative to providing all the mandatory and selected optional benefits under traditional Medicaid, the Deficit Reduction Act of 2005 (DRA; P.L. These plans can exist in sub-state areas and can be limited to specific subpopulations. States can require "full benefit eligibles" (or specific subgroups of these individuals) to enroll in Medicaid benchmark benefits. The benchmark options include
the Blue Cross/Blue Shield standard provider plan under the Federal Employees Health Benefits Program (FEHBP), a plan offered to state employees, the largest commercial health maintenance organization (HMO) in the state, and other Secretary-approved coverage appropriate for the targeted population. Many of these essential health benefits are currently coverable under benchmark packages. Mental Health Parity Requirements Under Both Traditional Medicaid and Benchmark Plans

The federal mental health parity requirements, as established in the Public Health Service Act (Section 2726), generally require that, under a given insurance plan, coverage of mental health services (if offered) should be on par with coverage of medical and surgical services in terms of the treatment limitations (e.g., amount, duration and scope of benefits), financial requirements (e.g., beneficiary co-payments), in- and out-of-network covered benefits, and annual and lifetime dollar limits. It is unclear how these state experiences with Medicaid benchmark plans to date will influence the design of such benefit packages in 2014 among states that choose to cover the new optional group of non-elderly, non-pregnant adults with income up to 133% of the federal poverty level. Additional CRS Medicaid and CHIP Resources

CRS Report RL33202, Medicaid: A Primer
CRS Report R41210, Medicaid and the State Children's Health Insurance Program (CHIP) Provisions in ACA: Summary and Timeline
CRS Report R40226, P.L.
The Medicaid program, which served 72 million people in FY2012, finances the delivery of a wide variety of preventive, primary, and acute care services as well as long-term services and supports for certain low-income populations. Benefits are available to beneficiaries through two avenues. First, the traditional Medicaid program covers a wide variety of mandatory services (e.g., inpatient hospital services, lab/x-ray services, physician care, nursing facility care for persons aged 21 and over), and other services at state option (e.g., prescribed drugs, physician-directed clinic services, physical therapy, prosthetic devices) to the majority of Medicaid beneficiaries across the United States. Within broad federal guidelines, states define the amount, duration, and scope of these benefits. Thus, even mandatory services are not identical from state to state.
The Deficit Reduction Act of 2005 (DRA; P.L. 109-171) created an alternative benefit structure for Medicaid. Under this authority, states may enroll certain Medicaid subpopulations into benchmark benefit plans that include four choices: (1) the standard Blue Cross/Blue Shield preferred provider plan under the Federal Employees Health Benefits Program, (2) a plan offered to state employees, (3) the largest commercial health maintenance organization in the state, and (4) other coverage appropriate for the targeted population, subject to approval by the Secretary of Health and Human Services (HHS).
Since the enactment of the Patient Protection and Affordable Care Act in 2010 (ACA; P.L. 111-148, as amended), benchmark benefits have taken on a new importance in the Medicaid program. As per the ACA, a new mandatory group of non-elderly, non-pregnant adults with income up to 133% of the federal poverty level will be eligible for Medicaid beginning in 2014, or sooner at state option. (For more information about a Supreme Court ruling regarding this group, see CRS Report RL33202, Medicaid: A Primer.) These individuals will be required to enroll in benchmark plans rather than traditional Medicaid (with some exceptions for subgroups with special medical needs). However, to date, only a handful of states have experience administering these plans, nearly all of which have been tailored to specific subpopulations.
The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) estimated that coverage expansion provisions in the ACA would increase enrollment by about 7 million in FY2014, rising to 11 million by FY2022 in both the Medicaid and the State Children's Health Insurance Programs (Congressional Budget Office, Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision, July 2012). Many of these new enrollees will get benchmark benefits. To assist Congress in evaluating the current scope of benefits available under Medicaid, this report outlines the major rules that govern and define both traditional Medicaid and benchmark benefits. It also compares the similarities and differences between these two benefit package designs.