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The Deficit Reduction Act of 2005 (DRA)- While not a coverage expansion, Kentucky has recently undertaken a redesign of its Medicaid program. In May 2006, Kentucky received state plan amendment approval from the Centers for Medicare and Medicaid Services (CMS) to move forward on plans to redesign its Medicaid program using DRA flexibility. The new plan, KyHealth Choices, offers four different benefit packages tailored to specific populations, increases cost sharing, and expands access to community-based long-term care. The new targeted benefit plans replace the Medicaid benefit package with “Secretary-approved” coverage. The four plans are:

Global Choices: Global Choices is designed for pregnant women, working parents up to 68 percent of the federal poverty level (FPL), foster children, medically fragile children, Supplemental Security Income-related groups, and women with breast and cervical cancer. Global Choices covers basic medical services with new benefit limits and increased cost sharing. Long-term care services are excluded.

Family Choices: Family Choices is designed for most children, including children enrolled in Kentucky’s State Children’s Health Insurance Program (SCHIP) program. Family Choices offers the same benefit package as Global Choices except there are no prescription drug limits and there is a higher vision care maximum benefit.

Optimum Choices: For individuals with developmental disabilities and mental retardation in need of long-term care services, Optimum Choices covers all the benefits in Global Choices as well as three levels of long-term care services.

Comprehensive Choices: For the elderly and individuals with disabilities in need of nursing facility level care, Comprehensive Choices offers all the benefits of Global Choices plus two levels of long-term care, including services offered through the state’s current home and community-based services waivers.

Kentucky also implemented new cost sharing requirements in June 2006. There are no co-pays for preventive services. Pregnant women and mandatory children are exempt from cost sharing. KyHealth Choices includes new benefit limits; however, services beyond the benefit limits may be approved through a prior authorization process. KyHealth Choices also includes an employer-sponsored insurance option.