The Centers for Medicare and Medicaid Services (CMS) approved South Carolina for a Deficit Reduction Act Health Opportunity Account (HOA) state plan amendment to offer enrollees the option of enrolling in a high deductible plan. The purpose of the program is to increase beneficiary involvement in their health care by creating awareness of the costs of care, reducing inappropriate use of services, and encouraging the utilization of preventive care services. The program covers Medicaid state plan services after an annual deductible has been met. The state will annually contribute $2,500 for each adult and $1,000 for each child to an HOA. Enrollees are not subject to cost sharing while using HOA funds. Once the HOA has been exhausted, however, enrollees are subject to 10 percent in cost sharing. If an enrollee loses Medicaid eligibility, account funds (up to 25 percent) may be used for health insurance, tuition, or job training up to three years after the loss of eligibility. The program operates under a fee-for-service model, and enrollees receive incentives for preventive health care services. Enrollment in the program is voluntary and will initially be limited to one county with a cap of 1,000 individuals. South Carolina is the first and only state, as of February 2008, to receive approval for an HOA amendment.
CMS also approved a DRA benchmark state plan amendment for the state in June 2007. The new program, entitled the State Employee High Deductible Health Plan, offers Medicaid beneficiaries the option to receive the same benefits that South Carolina state employees receive. Enrollees in the program are not subject to cost sharing until the annual deductible ($3,000 for an individual) has been met. Once the deductible is met, enrollees are subject to traditional state plan cost-sharing. Like the new HOA program, enrollment is voluntary and will initially be limited to 1,000 beneficiaries in one county. Individuals may opt out of the program and return to traditional Medicaid at any time.
