Arizona is starting a program that will require many higher-income adult Medicaid enrollees to put some of their income in personal accounts that resemble health savings accounts.

Enrollees can use the cash in the new Arizona Health Care Cost Containment System Choice Accountability, Responsibility, Engagement accounts, or AHCCCS CARE accounts, to pay for suntan lotion, dental services, vision care services, weight-loss programs and other health care products and services not covered by Medicaid, officials say.

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The Centers for Medicare & Medicaid Services (CMS) approved the health account proposal and other Arizona Medicaid change proposals last week. Arizona will be the first state to offer Medicaid enrollees access to a broad health account program, Arizona officials say.

Medicare is a federally funded program for people with disabilities, people getting kidney dialysis and people ages 65 and older.

Medicaid is a separate program that serves low-income people. Medicaid was originally billed as a state-funded, state-run system. It now operates with a combination of state and federal funding, and a combination of state management and federal oversight.

When CMS approved the AHCCS CARE account program, in a letter sent Sept. 30, the agency said Arizona can require some types of enrollees to contribute but cannot require other types of enrollees to contribute.

Arizona can require able-bodied adult enrollees with household income over 100 percent of the federal poverty level to participate.

Arizona cannot make children, individuals who are considered medically frail, individuals with serious mental illness, low-income enrollees or American Indian enrollees participate, according to CMS.

Medicaid enrollees with CARE accounts who have monthly household income under $1,250 will pay Medicaid premiums equal to 2 percent of their income. Arizona will put the premium payments into the CARE accounts.

Medicaid enrollees with higher income levels must pay a minimum of $25 in premiums per month, and the state will put that money in the CARE accounts, Arizona officials say.

“Members will be disenrolled for failure to pay their monthly premium requirements,” officials say.

Employers and charities can also contribute to the CARE accounts, officials say. 

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