The Centers for Medicare and Medicaid Services today announced it has proposed two rules that would give states unprecedented flexibility in designing their own Medicaid programs.

Implementing provisions of the Deficit Reduction Act of 2005 and the Tax Relief and Health Care Act of 2006, the rules would enable states to adjust their benefit package to more closely align with beneficiary needs and require increased cost sharing by enrollees.

“These new rules recognize that states are in the best position to design plans that provide Medicaid beneficiaries better health care for the same or even lower cost,” said Mike Leavitt, Health and Human Services secretary. “The proposed rules will result in patients having more choices and greater control over their health care decisions.

Under the rules, alternative benefit packages called “benchmark plans” would provide the standard Blue Cross/Blue Shield preferred provider option service benefit plan under the Federal Employees Health Benefit Plan, state employee coverage, coverage that is offered by the largest commercial health maintenance organization in the state, or coverage that the Secretary of Health and Human Services approves.

CMS also released proposed regulations on DRA provisions that allow states to change current premiums and cost sharing structures.

The proposed rules are expected to be published in the Feb. 22 Federal Register and will have a 30-day public comment period.