A new rule implementing the 2006 Deficit Reduction Act  allows states to impose premiums and higher co-payments for hospital care, prescriptions, and doctors’ services for those over the Federal Poverty Limit (those on TANF and SSI are exempt from the changes). The rule allows a sliding scale based on income requirements (up to a total of 5 percent of a family's income). It also allows for states to deny services to those who don’t pay the required premiums and co-payments. This may generate over a billion dollars in new revenue, though some worry that low-income individuals may forgo or delay services due to increased costs.  

The rule is available at: http://edocket.access.gpo.gov/

This Kaiser Daily Health Policy Report examines the rule and its implications on Medicaid beneficiary premiums and copayments.

From the report:

The rule allows states to implement a sliding scale for premiums and copays, the total of which cannot exceed 5% of a family's income. Under the new rule, states in certain cases can deny care or coverage to Medicaid beneficiaries who do not pay their premiums or their portion of the costs for particular items or services. For Medicaid beneficiaries with incomes at or below the federal poverty level, states can require copays of up to $3.40 for a physician visit or other services. That $3.40 maximum will be updated each year in accordance with medical inflation. For Medicaid beneficiaries with incomes between 100% and 150% of the poverty level, states can require beneficiaries to contribute up to 10% of what the state pays for a service. States can require beneficiaries with incomes above those levels to contribute up to 20% of what states pay for a service. The new rule allows states to use copays to encourage the use of preferred brand-name drugs and to discourage the use of emergency departments for primary care."

Full story: http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=55798

Kaiser Family Foundation. Kaiser Daily Health Policy Report. (2008). New federal rule allows states to charge Medicaid beneficiaries premiums, higher copayments.