Alternative Benefit Plan Coverage

ABP Final Rule

A final rule, published on July 15, 2013, entitled, “Medicaid and Children's Health Insurance Programs: Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes, and Premiums and Cost Sharing; Exchanges: Eligibility and Enrollment” (CMS-2334-F) made major changes in the Medicaid Benchmark Requirements.

Key Requirements of the Rule Include:

• The term 1937 Medicaid Benchmark or Benchmark Equivalent Plan has been retitled to Alternative Benefit Plans.
• ABPs must cover the 10 Essential Health Benefits (EHB) as described in section 1302(b) of the Affordable Care Act whether the state uses an ABP for Medicaid expansion or coverage of any other groups of individuals.
• Individuals in the new adult VIII eligibility group will receive benefits through an ABP.

Additional Guidance

• Alternative Benefit Plan Conforming Changes
• Alternative Benefit Plan Implementation Guides
• ABP Training Slides from 7/31/13
• CCIIO Information on Essential Health Benefits
• Essential Health Benefits and Alternative Benefit Plans State Medicaid Director Letter

Eligibility Group for ABPs

States can generally choose which Eligibility groups of people they will enroll in an ABP. 

New Adult VIII Group

The Affordable Care Act of 2010 expands Medicaid to individuals ages 19 through 64 at or below 133% FPL.  States that elect to expand Medicaid to the new adult group are required to provide benefits through ABPs.  

Medically Frail Populations

The Final Rule modifies the definition of “medically frail” and includes the addition of people with chronic substance use disorders.

Individuals in the new adult group, if determined to be medically frail, will receive the choice of an ABP defined using EHBs or an ABP defined as the state’s approved Medicaid state plan.  Medically frail individuals in eligibility groups other than the ABP must be voluntarily enrolled.

Steps for States in Designing Medicaid Alternative Benefit Plans (ABPs) 

Step 1: States must select a coverage option from the choices found in section 1937 of the Act. Four benchmark options that States should choose from:

1. 1. The Standard Blue Cross/Blue Shield Preferred Provider Option offered through the Federal Employees Health Benefit program.
   2. State employee coverage that is offered and generally available to state employees.
   3. Commercial HMO with the largest insured commercial, non-Medicaid enrollment in the state.
   4. Secretary-approved coverage, a benefit package the Secretary has determined to provide coverage appropriate to meet the needs of the population.

Step 2: States must determine if that coverage option is also one of the base-benchmark plan options identified by the Secretary as an option for defining (Essential Health Benefits) EHBs.

• • If so, the standards for the provision of coverage, including EHBs, would be met, as long as all EHB categories are covered.   
  • If not, states must select one of the base-benchmark plan options identified as defining EHBs identified in Step 3.

Step 3: Select a base benchmark plan to define the EHBs

1. 1. Any of the three largest small group market health plans by enrollment.
   2. Any of the three largest state employee health benefit plans by enrollment.
   3. Any of the three largest federal employee health benefit plans by aggregate enrollment.
   4. The largest insured commercial non-Medicaid health maintenance organization operating in the state.