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Highlights

Medicaid, jointly funded by the federal government and the states, finances health care for about 56 million low-income people at an estimated total cost of about $298 billion in fiscal year 2004. Congress intended Medicaid to be the payer of last resort: if Medicaid beneficiaries have another source of health care coverage--such as private health insurance or a health plan purchased individually or provided through an employer--that source, to the extent of its liability, should pay before Medicaid does. This concept is referred to as "third-party liability." When such coverage is used, savings accrue to the federal government and the states. Using data from the U.S. Census Bureau and the states, GAO examined (1) the extent to which Medicaid beneficiaries have private health coverage and (2) problems states face in ensuring that Medicaid is the payer of last resort, including the extent to which the Deficit Reduction Act of 2005 may help address these problems.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Centers for Medicare and Medicaid Services To resolve issues that are critical to the implementation of the Deficit Reduction Act's third-party provisions and to assist states in their efforts to ensure that Medicaid is the payer of last resort, the Administrator of CMS should determine and provide guidance to states with regard to the time frames by which states must have in effect laws that implement relevant third-party requirements of the Deficit Reduction Act.
Closed - Implemented
An accomplishment report was prepared in FY 2007.
Centers for Medicare and Medicaid Services To resolve issues that are critical to the implementation of the Deficit Reduction Act's third-party provisions and to assist states in their efforts to ensure that Medicaid is the payer of last resort, the Administrator of CMS should determine and provide guidance to states with regard to the entities covered by the Deficit Reduction Act's requirements to provide states with coverage and other information.
Closed - Implemented
An accomplishment report was prepared in FY 2007.

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