42 U.S.C. § 1396o–1 — State option for alternative premiums and cost sharing

(a) (1) Notwithstanding sections 1396o and 1396a(a)(10)(B), and subject to paragraph (2), a State^* may amend its plan to charge premiums and cost sharing to any State-defined group and for any State-defined type of service. It may vary those charges among groups or services. This does not cover drugs governed by (c) or nonemergency emergency-department services governed by (e). It does not override subsections (g), (i), (j), or (k) of section 1396o. (2)(A) Paragraph (1) and subsection (d) do not apply to a person^* whose family income is no more than 100 percent of the poverty line for that family size. Sections 1396o and 1396a(a)(10)(B) continue to apply. (B) If such a person is charged under (c), (e), or section 1396o, the family-wide aggregate cap in (b)(1)(B)(ii) applies. (3) “Premium” includes an enrollment fee or similar charge. “Cost sharing” includes a deduction, copayment, or similar charge.
(b) (1) For income above 100 but no more than 150 percent of the poverty line: (A) no premium may be charged; (B)(i) cost sharing for any item or service may not exceed 10 percent of its cost; and (ii) all cost sharing under this section, including (c) and (e), for the family may not exceed 5 percent of family income, measured quarterly or monthly as the State specifies. (2) For income above 150 percent: (A) all premiums and cost sharing under this section, including (c) and (e), for the family may not exceed 5 percent of family income, measured quarterly or monthly; and (B) cost sharing under (a) for an item or service may not exceed 20 percent of its cost. (3)(A) No premium may be charged for: (i) people under 18 who must receive assistance under section 1396a(a)(10)(A)(i), including foster-care and adoption-assistance recipients without regard to age; (ii) pregnant women; (iii) a terminally ill person receiving “hospice care^*,” which this section does not define; (iv) an inpatient who must spend all but a minimal amount of income needed for personal needs on medical care^*; (v) women covered through sections 1396a(a)(10)(A)(ii)(XVIII) and 1396a(aa); (vi) disabled children covered through sections 1396a(a)(10)(A)(ii)(XIX) and 1396a(cc); or (vii) an Indian receiving an item or service directly from an Indian health program or through contract-health referral. (B) Subject to this section, no cost sharing under (a) may be charged for: (i) the services just described for children, foster-care children, and adoption- or foster-care-assistance recipients; (ii) preventive care for children under 18, including well-baby, well-child care, and immunizations, regardless of income; (iii) pregnancy-related services and tobacco-cessation counseling and medicines for pregnant women; (iv) services for a terminally ill person receiving hospice care; (v) services for an inpatient who must spend nearly all income on medical care; (vi) emergency services as the Secretary^* defines them for section 1396o(a)(2)(D); (vii) the listed family-planning services and supplies; (viii) services for women covered through sections 1396a(a)(10)(A)(ii)(XVIII) and 1396a(aa); (ix) services for disabled children covered through sections 1396a(a)(10)(A)(ii)(XIX) and 1396a(cc); (x) items and services furnished to an Indian by an Indian health program or through contract-health referral; (xi) the listed in-vitro diagnostic product and its administration^* during the specified emergency period, and COVID-19 testing-related services during that period; (xii) a COVID-19 vaccine and its administration during the period beginning March 11, 2021, through the specified post-emergency endpoint; (xiii) COVID-19 testing and treatment^*, including special equipment and therapies, and treatment of a condition that may seriously complicate COVID-19 treatment during the person’s COVID-19 period, if otherwise covered; and (xiv) the listed vaccines and their administration. (C) A State may exempt more people from premiums and more people or services from cost sharing. (4) The State decides how to determine family income, including disregards, and the period and frequency for measuring it. (5) “Poverty line” has the meaning in section 9902(2), including required revisions. (6) This section does not prevent a State from imposing lower charges; does not affect the Secretary’s waiver authority to change these limits; and does not affect qualifying waivers already in effect before February 8, 2006.
(c) (1) To encourage use of State-identified cost-effective “preferred drugs” within a State-defined drug^* class, for State-defined beneficiary groups, a State may: (A) charge non-preferred drugs at a different level than section 1396o would otherwise allow, subject to (2) and (3); and (B) waive or reduce charges for preferred drugs, and must not charge such preferred-drug cost sharing to people exempt under (b)(3)(B). (2)(A) For a non-preferred drug, the charge may not exceed nominal cost sharing for income up to 150 percent of poverty, or 20 percent of the drug’s cost above 150 percent. (B) For a person exempt from cost sharing under (a) because of (b)(1)(B), it may not exceed the nominal amount. (C) The family-wide caps in (a)(2)(B) and (b)(1) or (2) still apply. (3) If the prescribing doctor says the preferred drug would be less effective, harmful, or both for the person, the non-preferred drug must receive the preferred drug’s charge level. (4) A State may exclude named drugs or classes from this rule.
(d) (1) A State may require advance payment of an authorized premium, or end assistance for nonpayment, for some or all State-defined groups. It may not end eligibility until nonpayment lasts at least 60 days, and may waive payment for undue hardship. (2) A participating provider may require authorized cost sharing before providing covered care, items, or services, but may reduce or waive it case by case.
(e) (1) A State may amend its plan to let a hospital charge for nonemergency emergency-department services for specified groups if: (A) an actually available and accessible alternative provider exists; and (B) after the required medical screening and a finding of no emergency medical condition, but before treatment, the hospital tells the person that payment may be required, gives the alternative provider’s name and location, says that provider can furnish the service without that charge, and makes a referral to coordinate scheduling. The State may apply or waive otherwise permitted cost sharing to that alternative service. (2)(A) For a person between 100 and 150 percent of poverty who is not in (B), the charge may not exceed twice the nominal section 1396o amount and remains subject to the family-income cap. (B) For a person under (a)(2)(A), or otherwise exempt under (b)(3)(B), the State may charge no more than nominal cost sharing only if the same care through an outpatient department or other local alternative has no charge. (C) The aggregate family cap still applies. This charge replaces charges otherwise allowed under (a) or section 1396o. (3) This does not limit a hospital’s screening and stabilizing duties under section 1395dd or alter State or Federal prudent-layperson rules for managed-care coverage or payment of emergency services. (4) “Non-emergency services” means hospital emergency-department care that is not the required screening or stabilizing examination and treatment. “Alternative non-emergency services provider” means a participating provider, such as a doctor’s office, clinic, community health center, hospital outpatient department, or similar provider, that can give clinically appropriate diagnosis or treatment at the same time as the emergency department would provide it.