Out of Pocket Costs

States can impose copayments, coinsurance, deductibles, and other
similar charges on most Medicaid-covered benefits, both inpatient and
outpatient services, and the amounts that can be charged vary with
income. All out of pocket charges are based on the individual state’s
payment for that service.
Out of pocket costs cannot be imposed for emergency services,
family planning services, pregnancy-related services, or preventive
services for children. Generally, out of pocket costs apply to all
Medicaid enrollees except those specifically exempted by law and most
are limited to nominal amounts. Exempted groups include children,
terminally ill individuals, and individuals residing in an
institution. Because Medicaid covers particularly low-income and
often very sick patients, services cannot be withheld for failure to
pay, but enrollees may be held liable for unpaid copayments.
States have the option to establish alternative out of pocket
costs. These charges may be targeted to certain groups of Medicaid
enrollees with income above 100 percent of the federal poverty level.
Alternative out of pocket costs may be higher than nominal charges
depending on the type of service, and they are subject to a cap not
exceeding 5 percent of family income. In addition, Medicaid enrollees
may be denied services for nonpayment of alternative copayments.

Maximum Nominal Out of Pocket Costs

Cost sharing for most services is limited to nominal or minimal
amounts. The maximum copayment that Medicaid may charge is based on
what the state pays for that service, as described in the following
table. These amounts are updated annually to account for increasing
medical care costs.

FY 2012 Maximum Nominal Copayment Amounts

State payment for service FY 2012 Maximum copayment
 $10 or less  $0.65
 $10.01 to $25  $1.30
 $25.01 to $50  $2.55
 $50.01 or more  $3.80

FY 2012 Maximum Nominal Deductible and Managed
Care Copayment Amounts 

 Deductible  $2.55
 Managed Care Copayment  $3.80


Services and Supplies Eligible Populations by Family Income
<100% FPL
FPL                   >150%
Institutional Care (inpatient hospital care, rehab
care, etc.)
50% of cost for 1st day of care 50% of cost for 1st day of care or 10% of cost 50% of cost for 1st day of care or 20% of cost
Non-Institutional Care (physician visits, physical
therapy, etc.)

10% of costs 20% of costs
Non-emergency use of the ER $3.80 $7.60 No limit
DrugsPreferred drugs
Non-preferred drugs



20% of cost