U.S Code last checked for updates: May 18, 2024
§ 1396o–1.
State option for alternative premiums and cost sharing
(a)
State flexibility
(1)
In general
(2)
Exemption for individuals with family income not exceeding 100 percent of the poverty line
(A)
In general
(B)
Limit on aggregate cost sharing
(3)
Definitions
In this section:
(A)
Premium
(B)
Cost sharing
(b)
Limitations on exercise of authority
(1)
Individuals with family income between 100 and 150 percent of the poverty line
In the case of an individual whose family income exceeds 100 percent, but does not exceed 150 percent, of the poverty line applicable to a family of the size involved—
(A)
no premium may be imposed under the plan; and
(B)
with respect to cost sharing—
(i)
the cost sharing imposed under subsection (a) with respect to any item or service may not exceed 10 percent of the cost of such item or service; and
(ii)
the total aggregate amount of cost sharing imposed under this section (including any cost sharing imposed under subsection (c) or (e)) for all individuals in the family may not exceed 5 percent of the family income of the family involved, as applied on a quarterly or monthly basis (as specified by the State).
(2)
Individuals with family income above 150 percent of the poverty line
In the case of an individual whose family income exceeds 150 percent of the poverty line applicable to a family of the size involved—
(A)
the total aggregate amount of premiums and cost sharing imposed under this section (including any cost sharing imposed under subsection (c) or (e)) for all individuals in the family may not exceed 5 percent of the family income of the family involved, as applied on a quarterly or monthly basis (as specified by the State); and
(B)
with respect to cost sharing, the cost sharing imposed with respect to any item or service under subsection (a) may not exceed 20 percent of the cost of such item or service.
(3)
Additional limitations
(A)
Premiums
No premiums shall be imposed under this section with respect to the following:
(i)
Individuals under 18 years of age that are required to be provided medical assistance under section 1396a(a)(10)(A)(i) of this title, and including individuals with respect to whom child welfare services are made available under part B of subchapter IV on the basis of being a child in foster care and individuals with respect to whom adoption or foster care assistance is made available under part E of such subchapter, without regard to age.
(ii)
Pregnant women.
(iii)
Any terminally ill individual who is receiving hospice care (as defined in section 1396d(o) of this title).
(iv)
Any individual who is an inpatient in a hospital, nursing facility, intermediate care facility for the mentally retarded, or other medical institution, if such individual is required, as a condition of receiving services in such institution under the State plan, to spend for costs of medical care all but a minimal amount of the individual’s income required for personal needs.
(v)
Women who are receiving medical assistance by virtue of the application of sections 1396a(a)(10)(A)(ii)(XVIII) and 1396a(aa) of this title.
(vi)
Disabled children who are receiving medical assistance by virtue of the application of sections 1396a(a)(10)(A)(ii)(XIX) and 1396a(cc) of this title.
(vii)
An Indian who is furnished an item or service directly by the Indian Health Service, an Indian Tribe, Tribal Organization or Urban Indian Organization or through referral under contract health services.
(B)
Cost sharing
Subject to the succeeding provisions of this section, no cost sharing shall be imposed under subsection (a) with respect to the following:
(i)
Services furnished to individuals under 18 years of age that are required to be provided medical assistance under section 1396a(a)(10)(A)(i) of this title, and including services furnished to individuals with respect to whom child welfare services are made available under part B of subchapter IV on the basis of being a child in foster care or and 1
1
 So in original.
individuals with respect to whom adoption or foster care assistance is made available under part E of such subchapter, without regard to age.
(ii)
Preventive services (such as well baby and well child care and immunizations) provided to children under 18 years of age regardless of family income.
(iii)
Services furnished to pregnant women, if such services relate to the pregnancy or to any other medical condition which may complicate the pregnancy, and counseling and pharmacotherapy for cessation of tobacco use by pregnant women (as defined in section 1396d(bb) of this title).
(iv)
Services furnished to a terminally ill individual who is receiving hospice care (as defined in section 1396d(o) of this title).
(v)
Services furnished to any individual who is an inpatient in a hospital, nursing facility, intermediate care facility for the mentally retarded, or other medical institution, if such individual is required, as a condition of receiving services in such institution under the State plan, to spend for costs of medical care all but a minimal amount of the individual’s income required for personal needs.
(vi)
Emergency services (as defined by the Secretary for purposes of section 1396o(a)(2)(D) of this title).
(vii)
Family planning services and supplies described in section 1396d(a)(4)(C) of this title.
(viii)
Services furnished to women who are receiving medical assistance by virtue of the application of sections 1396a(a)(10)(A)(ii)(XVIII) and 1396a(aa) of this title.
(ix)
Services furnished to disabled children who are receiving medical assistance by virtue of the application of sections 1396a(a)(10)(A)(ii)(XIX) and 1396a(cc) of this title.
(x)
Items and services furnished to an Indian directly by the Indian Health Service, an Indian Tribe, Tribal Organization or Urban Indian Organization or through referral under contract health services.
(xi)
Any in vitro diagnostic product described in section 1396d(a)(3)(B) of this title that is administered during any portion of the emergency period described in such section beginning on or after March 18, 2020 (and the administration of such product), and any service described in section 1396o(a)(2)(G) of this title that is furnished during any such portion.
(xii)
During the period beginning on March 11, 2021, and ending on the last day of the first calendar quarter that begins one year after the last day of the emergency period described in section 1320b–5(g)(1)(B) of this title, a COVID–19 vaccine and the administration of such vaccine (for any individual eligible for medical assistance for such vaccine (and administration)).
(xiii)
During the period beginning on March 11, 2021, and ending on the last day of the first calendar quarter that begins one year after the last day of the emergency period described in section 1320b–5(g)(1)(B) of this title, testing and treatments for COVID–19, including specialized equipment and therapies (including preventive therapies), and, in the case of an individual who is diagnosed with or presumed to have COVID–19, during the period during which such individual has (or is presumed to have) COVID–19, the treatment of a condition that may seriously complicate the treatment of COVID–19, if otherwise covered under the State plan (or waiver of such plan).
(xiv)
Vaccines described in section 1396d(a)(13)(B) of this title and the administration of such vaccines.
(C)
Construction
(4)
Determinations of family income
(5)
Poverty line defined
(6)
Construction
Nothing in this section shall be construed—
(A)
as preventing a State from further limiting the premiums and cost sharing imposed under this section beyond the limitations provided under this section;
(B)
as affecting the authority of the Secretary through waiver to modify limitations on premiums and cost sharing under this section; or
(C)
as affecting any such waiver of requirements in effect under this subchapter before February 8, 2006, with regard to the imposition of premiums and cost sharing.
(c)
Special rules for cost sharing for prescription drugs
(1)
In general
In order to encourage beneficiaries to use drugs (in this subsection referred to as “preferred drugs”) identified by the State as the most (or more) cost effective prescription drugs within a class of drugs (as defined by the State), with respect to one or more groups of beneficiaries specified by the State, subject to paragraph (2), the State may—
(A)
provide cost sharing (instead of the level of cost sharing otherwise permitted under section 1396o of this title, but subject to paragraphs (2) and (3)) with respect to drugs that are not preferred drugs within a class; and
(B)
waive or reduce the cost sharing otherwise applicable for preferred drugs within such class and shall not apply any such cost sharing for such preferred drugs for individuals for whom cost sharing may not be imposed under subsection (a) due to the application of subsection (b)(3)(B).
(2)
Limitations
(A)
By income group
In no case may the cost sharing under paragraph (1)(A) with respect to a non-preferred drug exceed—
(i)
in the case of an individual whose family income does not exceed 150 percent of the poverty line applicable to a family of the size involved, the amount of nominal cost sharing (as otherwise determined under section 1396o of this title); or
(ii)
in the case of an individual whose family income exceeds 150 percent of the poverty line applicable to a family of the size involved, 20 percent of the cost of the drug.
(B)
Limitation to nominal for exempt populations
(C)
Continued application of aggregate cap
(3)
Waiver
(4)
Exclusion authority
(d)
Enforceability of premiums and other cost sharing
(1)
Premiums
(2)
Cost sharing
(e)
State option for permitting hospitals to impose cost sharing for non-emergency care furnished in an emergency department
(1)
In general
Notwithstanding section 1396o of this title and section 1396a(a)(1) of this title or the previous provisions of this section, but subject to the limitations of paragraph (2), a State may, by amendment to its State plan under this subchapter, permit a hospital to impose cost sharing for non-emergency services furnished to an individual (within one or more groups of individuals specified by the State) in the hospital emergency department under this subsection if the following conditions are met:
(A)
Access to non-emergency room provider
(B)
Notice
The hospital must inform the beneficiary after receiving an appropriate medical screening examination under section 1395dd of this title and after a determination has been made that the individual does not have an emergency medical condition, but before providing the non-emergency services, of the following:
(i)
The hospital may require the payment of the State specified cost sharing before the service can be provided.
(ii)
The name and location of an alternate non-emergency services provider (described in subparagraph (A)) that is actually available and accessible (as described in such subparagraph).
(iii)
The fact that such alternate provider can provide the services without the imposition of cost sharing described in clause (i).
(iv)
The hospital provides a referral to coordinate scheduling of this treatment.
Nothing in this subsection shall be construed as preventing a State from applying (or waiving) cost sharing otherwise permissible under this section to services described in clause (iii).
(2)
Limitations
(A)
Individuals with family income between 100 and 150 percent of the poverty line
(B)
Application to exempt populations
(C)
Continued application of aggregate cap; relation to other cost sharing
(3)
Construction
Nothing in this section shall be construed—
(A)
to limit a hospital’s obligations with respect to screening and stabilizing treatment of an emergency medical condition under section 1395dd of this title; or
(B)
to modify any obligations under either State or Federal standards relating to the application of a prudent-layperson standard with respect to payment or coverage of emergency services by any managed care organization.
(4)
Definitions
For purposes of this subsection:
(A)
Non-emergency services
(B)
Alternate non-emergency services provider
(Aug. 14, 1935, ch. 531, title XIX, § 1916A, as added and amended Pub. L. 109–171, title VI, §§ 6041(a), 6042(a), 6043(a), Feb. 8, 2006, 120 Stat. 81, 85, 86; Pub. L. 109–432, div. B, title IV, § 405(a)(1)–(5), Dec. 20, 2006, 120 Stat. 2996–2998; Pub. L. 111–5, div. B, title V, § 5006(a)(2), Feb. 17, 2009, 123 Stat. 506; Pub. L. 111–148, title II, § 2102(b), title IV, § 4107(c)(2), Mar. 23, 2010, 124 Stat. 289, 561; Pub. L. 116–127, div. F, § 6004(a)(2)(B), Mar. 18, 2020, 134 Stat. 205; Pub. L. 117–2, title IX, § 9811(a)(3)(B), Mar. 11, 2021, 135 Stat. 210; Pub. L. 117–169, title I, § 11405(a)(2)(B), Aug. 16, 2022, 136 Stat. 1900.)
cite as: 42 USC 1396o-1