42 USC 1396u-7 - State flexibility in benefit packages

U.S Code last checked for updates: Aug 01, 2026

§ 1396u–7.

State flexibility in benefit packages

(a)

State option of providing benchmark benefits

(1)

Authority

(A)

In general

Notwithstanding section 1396a(a)(1) of this title (relating to statewideness), section 1396a(a)(10)(B) of this title (relating to comparability) and any other provision of this subchapter which would be directly contrary to the authority under this section and subject to subparagraphs (E) and (F), a State, at its option as a State plan amendment, may provide for medical assistance under this subchapter to individuals within one or more groups of individuals specified by the State through coverage that—

(i)

provides benchmark coverage described in subsection (b)(1) or benchmark equivalent coverage described in subsection (b)(2); and

(ii)

for any individual described in section 1396d(a)(4)(B) of this title who is eligible under the State plan in accordance with paragraphs (10) and (17) of section 1396a(a) of this title, consists of the items and services described in section 1396d(a)(4)(B) of this title (relating to early and periodic screening, diagnostic, and treatment services defined in section 1396d(r) of this title) and provided in accordance with the requirements of section 1396a(a)(43) of this title.

(B)

Limitation

(C)

Option of additional benefits

(D)

Treatment as medical assistance

(E)

Rule of construction

Nothing in this paragraph shall be construed as—

(i)

requiring a State to offer all or any of the items and services required by subparagraph (A)(ii) through an issuer of benchmark coverage described in subsection (b)(1) or benchmark equivalent coverage described in subsection (b)(2);

(ii)

preventing a State from offering all or any of the items and services required by subparagraph (A)(ii) through an issuer of benchmark coverage described in subsection (b)(1) or benchmark equivalent coverage described in subsection (b)(2); or

(iii)

affecting a child’s entitlement to care and services described in subsections (a)(4)(B) and (r) of section 1396d of this title and provided in accordance with section 1396a(a)(43) of this title whether provided through benchmark coverage, benchmark equivalent coverage, or otherwise.

(F)

Necessary transportation

Notwithstanding the preceding provisions of this paragraph, a State may not provide medical assistance through the enrollment of an individual with benchmark coverage or benchmark equivalent coverage described in subparagraph (A)(i) unless, subject to section 1396b(i)(9) of this title and in accordance with section 1396a(a)(4) of this title, the benchmark benefit package or benchmark equivalent coverage (or the State)—

(i)

ensures necessary transportation for individuals enrolled under such package or coverage to and from providers; and

(ii)

provides a description of the methods that will be used to ensure such transportation.

(2)

Application

(A)

In general

(B)

Limitation on application

A State may not require under subparagraph (A) an individual to obtain benefits through enrollment described in paragraph (1)(A) if the individual is within one of the following categories of individuals:

(i)

Mandatory pregnant women

(ii)

Blind or disabled individuals

(iii)

Dual eligibles

(iv)

Terminally ill hospice patients

(v)

Eligible on basis of institutionalization

(vi)

Medically frail and special medical needs individuals

(vii)

Beneficiaries qualifying for long-term care services

(viii)

Children in foster care receiving child welfare services and children receiving foster care or adoption assistance

(ix)

TANF and section 1396u–1 parents

(x)

Women in the breast or cervical cancer program

(xi)

Limited services beneficiaries

The individual—

(I)

qualifies for medical assistance on the basis of section 1396a(a)(10)(A)(ii)(XII) of this title; or

(II)

is not a qualified alien (as defined in section 1641 of title 8) and receives care and services necessary for the treatment of an emergency medical condition in accordance with section 1396b(v) of this title.

(C)

Full-benefit eligible individuals

(i)

In general

(ii)

Exclusion of medically needy and spend-down populations

(b)

Benchmark benefit packages

(1)

In general

For purposes of subsection (a)(1), subject to paragraphs (5) and (6), each of the following coverages shall be considered to be benchmark coverage:

(A)

FEHBP-equivalent health insurance coverage

(B)

State employee coverage

(C)

Coverage offered through HMO

The health insurance coverage plan that—

(i)

is offered by a health maintenance organization (as defined in

), and

(ii)

has the largest insured commercial, non-medicaid enrollment of covered lives of such coverage plans offered by such a health maintenance organization in the State involved.

(D)

Secretary-approved coverage

(2)

Benchmark-equivalent coverage

For purposes of subsection (a)(1), subject to paragraphs (5) and (6) 1

 So in original. Probably should be followed by a comma.

coverage that meets the following requirement shall be considered to be benchmark-equivalent coverage:

(A)

Inclusion of basic services

The coverage includes benefits for items and services within each of the following categories of basic services:

(i)

Inpatient and outpatient hospital services.

(ii)

Physicians’ surgical and medical services.

(iii)

Laboratory and x-ray services.

(iv)

Coverage of prescription drugs.

(v)

Mental health services.

(vi)

Well-baby and well-child care, including age-appropriate immunizations.

(vii)

Other appropriate preventive services, as designated by the Secretary.

(B)

Aggregate actuarial value equivalent to benchmark package

(C)

Substantial actuarial value for additional services included in benchmark package

With respect to each of the following categories of additional services for which coverage is provided under the benchmark benefit package used under subparagraph (B), the coverage has an actuarial value that is equal to at least 75 percent of the actuarial value of the coverage of that category of services in such package:

Determination of actuarial value

The actuarial value of coverage of benchmark benefit packages shall be set forth in an actuarial opinion in an actuarial report that has been prepared—

(A)

by an individual who is a member of the American Academy of Actuaries;

(B)

using generally accepted actuarial principles and methodologies;

(C)

using a standardized set of utilization and price factors;

(D)

using a standardized population that is representative of the population involved;

(E)

applying the same principles and factors in comparing the value of different coverage (or categories of services);

(F)

without taking into account any differences in coverage based on the method of delivery or means of cost control or utilization used; and

(G)

taking into account the ability of a State to reduce benefits by taking into account the increase in actuarial value of benefits coverage offered under this subchapter that results from the limitations on cost sharing under such coverage.

The actuary preparing the opinion shall select and specify in the memorandum the standardized set and population to be used under subparagraphs (C) and (D).

(4)

Coverage of rural health clinic and FQHC services

(A)

the individual has access, through such coverage or otherwise, to services described in subparagraphs (B) and (C) of section 1396d(a)(2) of this title; and

(B)

payment for such services is made in accordance with the requirements of section 1396a(bb) of this title.

(5)

Minimum standards

(6)

Mental health services parity

(A)

In general

(B)

Deemed compliance

(7)

Coverage of family planning services and supplies

(8)

COVID–19 vaccines, testing, and treatment

Notwithstanding the previous provisions of this section, a State may not provide for medical assistance through enrollment of an individual with benchmark coverage or benchmark-equivalent coverage under this section unless, 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, such coverage includes (and does not impose any deduction, cost sharing, or similar charge for)—

(A)

COVID–19 vaccines and administration of the vaccines; and

(B)

testing and treatments for COVID–19, including specialized equipment and therapies (including preventive therapies), and, in the case of such an individual who is diagnosed with or presumed to have COVID–19, during the period 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).

(c)

Publication of provisions affected

(Aug. 14, 1935, ch. 531, title XIX, § 1937, as added Pub. L. 109–171, title VI, § 6044(a), Feb. 8, 2006, 120 Stat. 88; amended Pub. L. 111–3, title VI, § 611(a)–(c), Feb. 4, 2009, 123 Stat. 100, 101; Pub. L. 111–148, title II, §§ 2001(a)(5)(E), (c), 2004(c)(2), 2303(c), Mar. 23, 2010, 124 Stat. 275, 276, 283, 296; Pub. L. 116–260, div. BB, title II, § 203(a)(4)(B), div. CC, title II, §§ 209(a)(2), 210(c), Dec. 27, 2020, 134 Stat. 2917, 2986, 2991; Pub. L. 117–2, title IX, § 9811(a)(5), Mar. 11, 2021, 135 Stat. 211.)

cite as: 42 USC 1396u-7