Washington

The Department of Health and Human Services has published in the Federal Register a final rule that gives states more flexibility in determining Medicaid eligibility. The rule also proposes new eligibility standards that would provide assistance to individuals whose income is slightly above traditional Medicaid levels but who are inundated with medical bills. HHS issued a proposed rule on this change in the Oct. 31 Federal Register.

Currently, a state can offer Medicaid coverage only to people who have spent enough of their income on medical bills that their remaining income meets a state's medically needy criteria. HHS pointed out that in 40 percent of the states, beneficiaries who meet such criteria are significantly below the poverty level. Under the final rule, a state could disregard some of a person's income used for food, housing and other necessities, allowing the person to qualify more easily for coverage.

The final rule also is particularly important to the elderly and disabled because it would resolve the institutional bias that exists with current regulations. Currently, disabled and elderly beneficiaries who live in institutions can qualify for coverage at higher income levels than if they lived at home. The final rule would allow beneficiaries to move or live at home without fear of losing coverage.

HHS estimates this change would cost $960 million during the next five years.

The final rule can be found under the Health Care Financing Administration heading in the Jan. 11 Federal Register at www.access.gpo.gov/su_docs/fedreg/frcont01.html.