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Capitol Health Call
February 8, 2012

Alternative Medicaid Coverage

JAMA. 2012;307(6):553. doi:10.1001/jama.2012.92

A demonstration project to study a new type of health insurance coverage for Medicaid enrollees has underperformed, according to a Government Accountability Office (GAO) report released December 16.

The Deficit Reduction Act of 2005 created a 5-year demonstration program allowing up to 10 states to test alternative health coverage under Medicaid. States participating in the program were required to establish savings accounts called Health Opportunity Accounts that beneficiaries could use to pay for out-of-pocket medical expenses. The states and federal government could fund the accounts with up to $2500 annually for an eligible adult and $1000 for a child, provided that they were also enrolled in a high-deductible health plan (

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