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GAO-12-221R 1 (2011-12-16)

handle is hein.gao/gaobacfpa0001 and id is 1 raw text is: Accountabiliy - Integrity - Reliability United States Government Accountability Office Washington, DC 20548 December 16, 2011 Congressional Committees Subject: Medicaid: Health Opportunity Accounts Demonstration Program The Deficit Reduction Act (DRA) of 2005 established a 5-year demonstration program allowing up to 10 states to test alternative health benefits under Medicaid, a joint federal state program that finances health care coverage for certain low-income individuals.1 States participating in the demonstration program were required to establish savings accounts-known as Health Opportunity Accounts (HOA)-that beneficiaries could use to pay for out-of-pocket medical expenses.2 The state and federal government could fund the accounts with up to $2,500 annually for an eligible adult and $1,000 for a child.3 The HOA had to be offered in conjunction with a high-deductible health plan, and withdrawals from the account had to be conducted electronically, without cash.4 Generally, Medicaid-eligible healthy adults under age 65 and children could voluntarily enroll in the program, subject to annual renewal.5 Beneficiaries who subsequently lost Medicaid eligibility could pay for medical or certain other expenses with the unused balances in their accounts.6 Although the demonstration program began in January 2007, Congress prohibited 'Pub. L. No. 109-171, § 6082, 120 Stat. 4, 113 (2006) (codified at 42 U.S.C. § 1396u-8). Demonstrations were required to (1) create patient awareness of the high cost of medical care, (2) provide incentives to patients to seek preventive care services, (3) reduce inappropriate use of health care services, (4) enable patients to take responsibility for health outcomes, (5) provide enrollment counselors and ongoing education, and (6) provide access to negotiated provider payment rates. 2States were allowed to fully cover preventive care, with no costs charged to the HOA. 3These amounts were to be adjusted each year to take into account medical inflation. States could contribute amounts in excess of these limits, but no federal matching would be available for those amounts. 4The deductible amount had to be at least equal to 100 percent, and not greater than 110 percent, of the annualized amount of state contributions into the HOA. 5Certain individuals, such as disabled individuals and those aged 65 or over, were not eligible to enroll. 6Individuals enrolled for 1 year or less who lost Medicaid eligibility could use 75 percent of any remaining account balance for up to 3 years to pay for the cost of medical expenses or to purchase private health insurance. In addition, individuals who maintained an HOA for more than 1 year before losing eligibility could use any surplus funds for other purposes including job training or educational expenses, if permitted by the state, and approved by the Department of Health and Human Services. GAO-1 2-221 R Medicaid Health Opportunity Accounts

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