The Obama administration has announced on Monday setting up new standards for Medicaid private insurance plans. Such insurance plans have become the main source of coverage for low-income people in recent years.
Laws related to Medicaid insurance regulate concerned middlemen in 39 states, as well as Washington DC. The federal government pays most of the cost despite the fact that each state formulates its own program.
According to the revised rules, insurance companies must ensure access to certain types of service providers. The newly promulgated rules also require the insurers to spend of at least 80% of their receivables on medical care. The revision also offers a quality rating system to help Medicaid recipients in picking a plan, reports The Grand Island Independent.
US Medicaid system costs $500 billion a year and has been acknowledged as a major component of state budgets. Private insurers serve more than two-thirds of the Medicaid recipients in a market of 70 million beneficiaries. Notably mentioning, the rules haven't been reviewed for more than a decade, according to a report published in ABC News. The new regulations have been published in 1400 pages which will require time for states, consumer advocates and insurers to extract all of their applications. The revision is scheduled to get effective from January 1 while demanding years for full implementation, reports Mohave Valley Daily News. Medicaid insurance program has grown dramatically with the enactment of new healthcare law by Obama administration. The new health care act has extended eligibility to low-income adults with no children living at home. Washington DC and thirty-one other states have so far embraced with the health care law's Medicaid expansion. The US Medicaid system pays doctors considerably lower compared to that of job-based health insurance or Medicare and thus raises concern over longstanding access. However, unlike community health centers, hospitals too do accept Medicaid. Primary care doctors and specialists, agreed to serve Medicaid beneficiaries against a fixed rate, unite under networks set up by the private insurers. In this process, insurers offer states predictability on costs and guarantee for a basic level of access for patients. Though some states charge a token value for Medicaid service from beneficiaries, but in majority states it is free. Medicaid service improves financial stability for low-income people while offering a positive impact on mental health, according to some reports.
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