42 USC 1396u-8 - Health opportunity accounts

U.S Code last checked for updates: Oct 16, 2024

§ 1396u–8.

Health opportunity accounts

(a)

Authority

(1)

In general

(2)

Initial demonstration

(A)

In general

The demonstration program under this section shall begin on January 1, 2007. During the first 5 years of such program, the Secretary shall not approve more than 10 States to conduct demonstration programs under this section, with each State demonstration program covering 1 or more geographic areas specified by the State. After such 5-year period—

(i)

unless the Secretary finds, taking into account cost-effectiveness, quality of care, and other criteria that the Secretary specifies, that a State demonstration program previously implemented has been unsuccessful, such a demonstration program may be extended or made permanent in the State; and

(ii)

unless the Secretary finds, taking into account cost-effectiveness, quality of care, and other criteria that the Secretary specifies, that all State demonstration programs previously implemented were unsuccessful, other States may implement State demonstration programs.

(B)

GAO report

(i)

In general

(ii)

Appropriation

(3)

Approval

The Secretary shall not approve a State demonstration program under paragraph (1) unless the program includes the following:

(A)

Creating patient awareness of the high cost of medical care.

(B)

Providing incentives to patients to seek preventive care services.

(C)

Reducing inappropriate use of health care services.

(D)

Enabling patients to take responsibility for health outcomes.

(E)

Providing enrollment counselors and ongoing education activities.

(F)

Providing transactions involving health opportunity accounts to be conducted electronically and without cash.

(G)

Providing access to negotiated provider payment rates consistent with this section.

Nothing in this section shall be construed as preventing a State demonstration program from providing incentives for patients obtaining appropriate preventive care (as defined for purposes of section 223(c)(2)(C) of the Internal Revenue Code of 1986), such as additional account contributions for an individual demonstrating healthy prevention practices.

(4)

No requirement for statewideness

(b)

Eligible population groups

(1)

In general

(2)

Eligibility limitations during initial demonstration period

During the initial 5 years of the demonstration program under this section, a State demonstration program shall not apply to any of the following individuals:

(A)

Individuals who are 65 years of age or older.

(B)

Individuals who are disabled, regardless of whether or not their eligibility for medical assistance under this subchapter is based on such disability.

(C)

Individuals who are eligible for medical assistance under this subchapter only because they are (or were within the previous 60 days) pregnant.

(D)

Individuals who have been eligible for medical assistance for a continuous period of less than 3 months.

(3)

Additional limitations

(4)

Limitations

(A)

State option

(B)

On enrollees in Medicaid managed care organizations

Insofar as the State provides for eligibility of individuals who are enrolled in Medicaid managed care organizations, such individuals may participate in the State demonstration program only if the State provides assurances satisfactory to the Secretary that the following conditions are met with respect to any such organization:

(i)

In no case may the number of such individuals enrolled in the organization who participate in the program exceed 5 percent of the total number of individuals enrolled in such organization.

(ii)

The proportion of enrollees in the organization who so participate is not significantly disproportionate to the proportion of such enrollees in other such organizations who participate.

(iii)

The State has provided for an appropriate adjustment in the per capita payments to the organization to account for such participation, taking into account differences in the likely use of health services between enrollees who so participate and enrollees who do not so participate.

(5)

Voluntary participation

(6)

1-year moratorium for reenrollment

(c)

Alternative benefits

(1)

In general

The alternative benefits provided under this section shall consist, consistent with this subsection, of at least—

(A)

coverage for medical expenses in a year for items and services for which benefits are otherwise provided under this subchapter after an annual deductible described in paragraph (2) has been met; and

(B)

contribution into a health opportunity account.

Nothing in subparagraph (A) shall be construed as preventing a State from providing for coverage of preventive care (referred to in subsection (a)(3)) within the alternative benefits without regard to the annual deductible.

(2)

Annual deductible

(3)

Access to negotiated provider payment rates

(A)

Fee-for-service enrollees

In the case of an individual who is participating in a State demonstration program and who is not enrolled with a Medicaid managed care organization, the State shall provide that the individual may obtain demonstration program Medicaid services from—

(i)

any participating provider under this subchapter at the same payment rates that would be applicable to such services if the deductible described in paragraph (1)(A) was not applicable; or

(ii)

any other provider at payment rates that do not exceed 125 percent of the payment rate that would be applicable to such services furnished by a participating provider under this subchapter if the deductible described in paragraph (1)(A) was not applicable.

(B)

Treatment under medicaid managed care plans

(C)

Computation

(D)

Definitions

For purposes of this paragraph:

(i)

The term “demonstration program Medicaid services” means, with respect to an individual participating in a State demonstration program, services for which the individual would be provided medical assistance under this subchapter but for the application of the deductible described in paragraph (1)(A).

(ii)

The term “participating provider” means—

(I)

with respect to an individual described in subparagraph (A), a health care provider that has entered into a participation agreement with the State for the provision of services to individuals entitled to benefits under the State plan; or

(II)

with respect to an individual described in subparagraph (B) who is enrolled in a Medicaid managed care organization, a health care provider that has entered into an arrangement for the provision of services to enrollees of the organization under this subchapter.

(4)

No effect on subsequent benefits

(5)

Overriding cost sharing and comparability requirements for alternative benefits

(6)

Treatment as medical assistance

(7)

Use of tiered deductible and cost sharing

(A)

In general

A State—

(i)

may vary the amount of the annual deductible applied under paragraph (1)(A) based on the income of the family involved so long as it does not favor families with higher income over those with lower income; and

(ii)

may vary the amount of the maximum out-of-pocket cost sharing (as defined in subparagraph (B)) based on the income of the family involved so long as it does not favor families with higher income over those with lower income.

(B)

Maximum out-of-pocket cost sharing

(8)

Contributions by employers

(d)

Health opportunity account

(1)

In general

(2)

Contributions

(A)

In general

No contribution may be made into a health opportunity account except—

(i)

contributions by the State under this subchapter; and

(ii)

contributions by other persons and entities, such as charitable organizations, as permitted under section 1396b(w) of this title.

(B)

State contribution

(C)

Limitation on annual State contribution provided and permitting imposition of maximum account balance

(i)

In general

A State—

(I)

may impose limitations on the maximum contributions that may be deposited under subparagraph (A)(i) into a health opportunity account in a year;

(II)

may limit contributions into such an account once the balance in the account reaches a level specified by the State; and

(III)

subject to clauses (ii) and (iii) and subparagraph (D)(i), may not provide contributions described in subparagraph (A)(i) to a health opportunity account on behalf of an individual or family to the extent the amount of such contributions (including both State and Federal shares) exceeds, on an annual basis, $2,500 for each individual (or family member) who is an adult and $1,000 for each individual (or family member) who is a child.

(ii)

Indexing of dollar limitations

(iii)

Budget neutral adjustment

(D)

Limitations on Federal matching

(i)

State contribution

(ii)

No FFP for private contributions

(E)

Application of different matching rates

(3)

Use

(A)

General uses

(i)

In general

(ii)

General limitation

(iii)

State restrictions

In applying clause (i), a State may restrict payment for—

(I)

providers of items and services to providers that are licensed or otherwise authorized under State law to provide the item or service and may deny payment for such a provider on the basis that the provider has been found, whether with respect to this subchapter or any other health benefit program, to have failed to meet quality standards or to have committed 1 or more acts of fraud or abuse; and

(II)

items and services insofar as the State finds they are not medically appropriate or necessary.

(iv)

Electronic withdrawals

(B)

Maintenance of health opportunity account after becoming ineligible for public benefit

(i)

In general

Notwithstanding any other provision of law, if an account holder of a health opportunity account becomes ineligible for benefits under this subchapter because of an increase in income or assets—

(I)

no additional contribution shall be made into the account under paragraph (2)(A)(i);

(II)

subject to clause (iii), the balance in the account shall be reduced by 25 percent; and

(III)

subject to the succeeding provisions of this subparagraph, the account shall remain available to the account holder for 3 years after the date on which the individual becomes ineligible for such benefits for withdrawals under the same terms and conditions as if the account holder remained eligible for such benefits, and such withdrawals shall be treated as medical assistance in accordance with subsection (c)(6).

(ii)

Special rules

Withdrawals under this subparagraph from an account—

(I)

shall be available for the purchase of health insurance coverage; and

(II)

may, subject to clause (iv), be made available (at the option of the State) for such additional expenditures (such as job training and tuition expenses) specified by the State (and approved by the Secretary) as the State may specify.

(iii)

Exception from 25 percent savings to Government for private contributions

(iv)

Condition for non-health withdrawals

(v)

No requirement for continuation of coverage

(4)

Administration

(5)

Treatment

(6)

Unauthorized withdrawals

A State may establish procedures—

(A)

to penalize or remove an individual from the health opportunity account based on nonqualified withdrawals by the individual from such an account; and

(B)

to recoup costs that derive from such nonqualified withdrawals.

(Aug. 14, 1935, ch. 531, title XIX, § 1938, as added Pub. L. 109–171, title VI, § 6082(2), Feb. 8, 2006, 120 Stat. 113.)

cite as: 42 USC 1396u-8

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