Georgia Medicaid Alternative Benefit Plans: A Complete Guide to Section 1937 ABP Framework and Essential Health Benefits

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By Brevy Care Team · Last verified May 12, 2026

Section 1937 of the Social Security Act, added by the Deficit Reduction Act of 2005 and substantially expanded by the Affordable Care Act of 2010, authorizes states to provide Medicaid coverage to specific populations through Alternative Benefit Plans rather than the traditional state plan benefit package. ABPs must cover the ten Essential Health Benefits established under Section 1302(b) of the ACA, meet mental health parity requirements under MHPAEA, and be at least actuarially equivalent to one of four federal benchmark plans. Specific populations including pregnant women, individuals with disabilities, dual eligibles, terminally ill in hospice, and medically frail individuals are exempted from mandatory ABP enrollment. Children retain EPSDT coverage as a wrap-around regardless of ABP enrollment. This guide translates the Section 1937 ABP framework for Georgia families and explains exactly how ABPs are constructed, what the ten Essential Health Benefits include, what the four benchmark options are, how mental health parity applies, how EPSDT is preserved, how Georgia uses an ABP-like structure for the Pathways to Coverage program under Section 1115 demonstration authority, and how ABPs would operate if Georgia adopted full ACA Medicaid expansion. :::

::: callout Key takeaways

1. Section 1937 of the Social Security Act, added by the Deficit Reduction Act of 2005 and substantially modified by the Affordable Care Act of 2010, authorizes states to provide Medicaid coverage through Alternative Benefit Plans for specific populations.
2. ABPs must cover the ten Essential Health Benefits under Section 1302(b) of the ACA: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services including oral and vision care.
3. An ABP must be at least actuarially equivalent to one of four federal benchmark plans: the Federal Employees Health Benefits Program Blue Cross/Blue Shield Standard Option, a state employee health benefit plan, the state's largest commercial HMO, or Secretary-approved coverage (which since the ACA can include the state's own Medicaid state plan benefit package).
4. Section 1937(c) exempts specified populations from mandatory ABP enrollment, including pregnant women, individuals eligible based on blindness or disability, dual eligibles, terminally ill in hospice, medically frail individuals, aged individuals, and individuals in institutional care or receiving long-term services and supports.
5. Georgia has not adopted full ACA Medicaid expansion. Georgia operates the Pathways to Coverage program under Section 1115 demonstration authority, which uses an ABP-like benefit structure for eligible adults who meet work and reporting requirements. :::

Why Alternative Benefit Plans matter for Georgia Medicaid

The Medicaid program does not operate with a single uniform benefit package across all populations. Federal law authorizes flexibility in benefit design through Alternative Benefit Plans (ABPs), originally created by the Deficit Reduction Act of 2005 and substantially expanded by the Affordable Care Act of 2010. ABPs allow states to provide Medicaid coverage to certain populations through benefit packages benchmarked to commercial coverage standards rather than the traditional Medicaid state plan benefit package.

For Georgia families, the ABP framework matters for several reasons. First, Georgia's Pathways to Coverage program, operated under a Section 1115 demonstration waiver, uses an ABP-like benefit structure to provide coverage to limited-expansion adults who meet the program's income and activity requirements. Understanding the ABP framework helps families understand what Pathways covers and what it does not. Second, if Georgia were to adopt full ACA Medicaid expansion in the future, the new adult group would be covered through an ABP meeting Section 1937 requirements. Understanding the framework helps families understand what expansion would mean for benefit packages. Third, certain optional populations in Georgia could be served through ABPs if the state chose to implement them, so the framework provides analytical structure for understanding benefit design choices. Fourth, even when ABPs apply to specific populations, certain populations are exempted (medically frail, pregnant women, individuals with disabilities, dual eligibles, and others) and retain access to the traditional state plan benefit package. Knowing the exemption framework matters for vulnerable individuals.

This guide explains the federal Section 1937 ABP framework, how the ten Essential Health Benefits structure benefit coverage, what the four benchmark options are, how mental health parity and EPSDT apply, how Georgia uses ABP-like structures in Pathways to Coverage, and how the framework would apply under full expansion.

The federal Section 1937 statutory framework

Origin in the Deficit Reduction Act of 2005

Section 1937 of the Social Security Act was added by Section 6044 of the Deficit Reduction Act of 2005. The original DRA 2005 framework allowed states to provide Medicaid coverage to certain populations through "benchmark coverage" or "benchmark-equivalent coverage" rather than the traditional state plan benefit package. The original framework was designed to give states flexibility to provide more streamlined benefit packages to optional populations, with the rationale that optional eligibility expansions could be made more financially sustainable through tailored benefit design.

The four authorized benchmarks in the original DRA 2005 framework were:

1. The Federal Employees Health Benefits Program standard Blue Cross/Blue Shield preferred provider option
2. A state employee health benefit plan
3. The HMO with the largest commercial non-Medicaid enrollment in the state
4. Secretary-approved coverage

States that elected to use the ABP framework would submit a state plan amendment to CMS identifying the population to be served and specifying the benchmark or benchmark-equivalent coverage to be provided.

Substantial expansion by the Affordable Care Act of 2010

The Affordable Care Act of 2010 substantially modified Section 1937 through Section 2001(c). Key modifications included:

• Mandatory coverage of the ten Essential Health Benefits established under Section 1302(b) of the ACA
• Application of MHPAEA mental health parity requirements through Section 1937(b)(6)
• Application of ABPs to the new adult group created by the ACA Medicaid expansion (Section 1902(a)(10)(A)(i)(VIII))
• Explicit requirement of habilitative services as a distinct service category
• Strengthened prescription drug coverage requirements
• Alignment of preventive services with ACA Section 2713 requirements
• Authorization for the Secretary to approve the state's own Medicaid state plan benefit package as Secretary-approved coverage under Section 1937(b)(1)(D), giving states an additional flexibility option

The ACA modifications fundamentally changed the role of ABPs in Medicaid. Prior to the ACA, ABPs were used relatively narrowly for specific optional populations. After the ACA, ABPs became the standard vehicle for the new adult group in expansion states, dramatically expanding ABP enrollment nationally.

How ABPs differ from the traditional state plan benefit package

The traditional Medicaid state plan benefit package is defined by Section 1905(a) of the Social Security Act, which lists mandatory and optional service categories. Mandatory services include inpatient hospital, outpatient hospital, physician services, laboratory and X-ray, nursing facility for individuals 21 and over, family planning, EPSDT for individuals under 21, rural health clinic and FQHC services, and others. Optional services include prescription drugs (though virtually all states cover them), dental services for adults, vision services for adults, physical and occupational therapy, speech-language pathology, and others.

ABPs use a different structural approach. Rather than itemizing mandatory and optional service categories, ABPs require coverage of the ten Essential Health Benefits categories at the level of a chosen benchmark. The EHB framework is more closely aligned with commercial health insurance benefit design than with the traditional Medicaid service-category framework.

In practice, the two approaches often produce similar benefit packages, especially when the Secretary-approved coverage option uses the state's own Medicaid state plan benefit package as the benchmark. The main practical differences arise in habilitative services (more strongly required under ABPs), pediatric oral and vision care (distinct EHB requirements), and mental health parity (applied through MHPAEA under ABPs in ways that may exceed traditional state plan limitations).

Which populations may be covered under ABPs

Section 1937(a)(2) populations

Section 1937(a)(2) authorizes ABP coverage for populations specified in regulations and state plan amendments. Populations that may be covered through ABPs include:

• The new adult group under Section 1902(a)(10)(A)(i)(VIII) created by the ACA expansion
• Optional categorically needy populations
• Other populations specified by state plan amendment and approved by the Secretary

Section 1937(c) exempted populations

Section 1937(c) specifies populations that must be offered the standard state plan benefit package and cannot be required to enroll in an ABP without their consent. The exempted populations include:

• Pregnant women whose eligibility is based on pregnancy
• Individuals whose eligibility is based on blindness or disability
• Dual eligibles (individuals enrolled in both Medicare and Medicaid)
• Terminally ill individuals receiving hospice services
• Medically frail individuals, defined to include those with disabling mental disorders, chronic substance use disorders, serious and complex medical conditions, and physical or mental disabilities that significantly impair functional capacity
• Aged individuals
• Individuals in institutional care (nursing facilities, ICFs/IID, IMDs)
• Individuals receiving long-term services and supports
• Section 1931 medically needy
• Section 1925 transitional medical assistance
• TANF cash assistance recipients
• Section 1902(a)(10)(A)(i)(VII) breast and cervical cancer treatment

These exemptions reflect Congressional intent that vulnerable populations retain access to the comprehensive state plan benefit package. The medically frail exemption is particularly important because it ensures that individuals with serious behavioral health conditions, complex medical conditions, or functional impairments are not required to receive a potentially narrower ABP benefit package.

An individual who is exempted from mandatory ABP enrollment retains the option to voluntarily enroll in an ABP if it meets their needs. The exemption is a right, not a prohibition.

Children and EPSDT

Children under age 21 are not specifically listed in the Section 1937(c) exempted populations. However, Section 1937(b)(7) and 42 CFR 440.345 preserve EPSDT for children in ABPs. Children enrolled in an ABP receive EPSDT services as a wrap-around to the ABP benefit package. EPSDT under Section 1905(r) is comprehensive and covers any medically necessary service to correct or ameliorate physical or mental conditions discovered through screening, whether or not such service is otherwise covered by the state plan or ABP.

This wrap-around effectively means children in ABPs have access to the full range of medically necessary services, even if those services are not explicitly in the ABP benefit package. EPSDT preservation is a significant protection for children.

The ten Essential Health Benefits

Origin in Section 1302(b) of the ACA

Section 1302(b) of the Affordable Care Act established the Essential Health Benefits framework as a uniform minimum coverage standard for individual and small group market plans, ABPs in Medicaid, CHIP separate state plans using benchmark coverage, and Basic Health Program plans. The EHB framework consists of ten categories of services that all covered plans must include.

The ten EHB categories

1. Ambulatory patient services. Outpatient medical and surgical services including physician office visits, outpatient surgery, urgent care, telehealth, and outpatient diagnostic services. This category covers services provided without an overnight hospital stay.

2. Emergency services. Emergency room care for acute symptoms requiring immediate evaluation, emergency stabilization services, and ambulance transportation in emergency situations. Section 1932(b)(2) of the Social Security Act prohibits prior authorization for emergency services and requires the prudent layperson standard for determining whether services are emergent.

3. Hospitalization. Inpatient hospital services including room and board, professional services during hospitalization, surgical services, and post-surgical care. May include rehabilitation hospital care.

4. Maternity and newborn care. Prenatal, intrapartum, and postpartum services for pregnant women; newborn care including newborn examination, evaluation, and treatment of conditions detected; coordination of care between obstetric and pediatric providers.

5. Mental health and substance use disorder services, including behavioral health treatment. Outpatient mental health and substance use disorder counseling and treatment, inpatient psychiatric care, inpatient and residential substance use disorder treatment, medication-assisted treatment for opioid use disorder, behavioral health treatment for autism spectrum disorders and other developmental disabilities, and crisis services. Subject to MHPAEA parity requirements.

6. Prescription drugs. Outpatient prescription drug coverage. Under Section 1937(b)(5), ABPs must comply with Section 1927 federal rebate program requirements, including coverage of all federally rebated drugs in covered categories with formulary exceptions process for medical necessity.

7. Rehabilitative and habilitative services and devices. Rehabilitative services help individuals restore skills and functioning lost due to illness, injury, or disability (physical therapy, occupational therapy, speech-language pathology, cardiac rehabilitation, pulmonary rehabilitation). Habilitative services help individuals keep, learn, or improve skills and functioning for daily living (applied behavior analysis, developmental therapies, habilitative physical and occupational therapy for individuals with developmental conditions). Devices include durable medical equipment, orthotics, prosthetics, and assistive technology.

8. Laboratory services. Diagnostic laboratory testing, pathology, and clinical laboratory services. Includes tests ordered for screening, diagnosis, treatment monitoring, and preventive care.

9. Preventive and wellness services and chronic disease management. Includes USPSTF Grade A and B recommended preventive services, ACIP-recommended immunizations, HRSA-recommended preventive services for women, infants, children, and adolescents, and chronic disease management services. Under ACA Section 2713, these services must be covered without cost-sharing.

10. Pediatric services, including oral and vision care. Pediatric medical services, pediatric oral care including preventive and restorative dental services, and pediatric vision care including eye examinations and corrective lenses. Pediatric oral and vision are distinct EHB requirements often provided through embedded dental and vision coverage.

How EHB requirements interact with benchmark coverage

When a state elects an ABP with a chosen benchmark, the benchmark plan's coverage of the ten EHB categories establishes the baseline. If the benchmark plan's coverage is inadequate for any EHB category, the state must supplement to meet EHB requirements. For example, if the chosen state employee health plan benchmark does not include adequate pediatric oral coverage, the ABP must supplement with pediatric oral coverage from another source (such as the Federal Dental Plan or CHIP separate plan dental).

States use EHB benchmark selection tools developed by CMS to identify the specific benefits in each EHB category that the chosen benchmark covers, then assess whether supplementation is needed.

The four benchmark options

Option 1: Federal Employees Health Benefits Program standard option

The first benchmark option under Section 1937(b)(1)(A) is the Federal Employees Health Benefits Program (FEHBP) Blue Cross/Blue Shield Standard Preferred Provider Option offered to federal employees and retirees nationally. This is a substantial commercial-style coverage plan with broad benefits, used historically as a reference point for what comprehensive private coverage looks like.

States that select the FEHBP benchmark must structure their ABP to provide coverage at least actuarially equivalent to FEHBP Standard Option for the target population. The FEHBP coverage includes broad medical, hospital, mental health, prescription drug, and other coverage.

Option 2: State employee health benefit plan

The second benchmark option under Section 1937(b)(1)(B) is a health benefits plan offered to state employees of the state implementing the ABP. State employee health plans vary significantly between states in their generosity, network structure, and benefit design.

A state that selects its state employee plan benchmark must specify which plan (if the state offers multiple options to state employees) and structure the ABP to provide actuarially equivalent coverage.

Option 3: Commercial HMO

The third benchmark option under Section 1937(b)(1)(C) is the health insurance coverage plan offered through a health maintenance organization (HMO) that has the largest insured commercial non-Medicaid enrollment of covered lives in the state. The "largest commercial HMO" determination is made based on enrollment data, generally as of a specified reference date.

In Georgia, the largest commercial HMO benchmark would be identified based on enrollment data and would represent a substantial commercial coverage plan with managed care characteristics.

Option 4: Secretary-approved coverage

The fourth benchmark option under Section 1937(b)(1)(D) is health benefits coverage that the Secretary of Health and Human Services determines provides appropriate coverage for the population proposed to be provided such coverage. Since the ACA, this Secretary-approved option specifically allows states to use their own Medicaid state plan benefit package as the benchmark.

This option has become particularly important because it allows states to use ABPs without significantly changing the benefit package familiar to providers, beneficiaries, and administrators. A state can elect ABP framework for an eligibility population while continuing to provide essentially the same benefit package as the traditional state plan.

Benchmark-equivalent coverage

Under Section 1937(b)(2), instead of providing benchmark coverage directly, a state may provide benchmark-equivalent coverage. Benchmark-equivalent coverage must:

• Include inpatient and outpatient hospital services
• Include physician surgical and medical services
• Include laboratory and X-ray services
• Include well-baby and well-child care including age-appropriate immunizations
• Include other categories of services at the actuarial value required under the benchmark-equivalent framework

An actuary must certify the actuarial equivalence determination. Benchmark-equivalent coverage offers more flexibility than direct benchmark coverage but requires actuarial analysis.

Mental health parity under MHPAEA

Application through Section 1937(b)(6) and 42 CFR 438.910

The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), originally applied to large group health plans, has been extended to ABPs through Section 1937(b)(6) and 42 CFR 438.910. MHPAEA parity requirements ensure that mental health and substance use disorder (MH/SUD) services are not subject to more restrictive limits than medical/surgical services.

Parity domains

MHPAEA parity applies across multiple domains:

Aggregate lifetime and annual dollar limits. MH/SUD dollar limits must not be more restrictive than predominant medical/surgical dollar limits. Medicaid generally does not impose annual or lifetime dollar limits, so this requirement is largely satisfied by default.

Financial requirements. Deductibles, copayments, coinsurance, and out-of-pocket maximums applied to MH/SUD must not be more restrictive than the predominant requirements applied to medical/surgical benefits within the same coverage classification. Classifications include inpatient in-network, inpatient out-of-network, outpatient in-network, outpatient out-of-network, emergency care, and prescription drugs.

Quantitative treatment limitations. Number of visits, days of coverage, frequency of treatment, and similar quantitative limits applied to MH/SUD must not be more restrictive than predominant limits on medical/surgical benefits within the same classification.

Non-quantitative treatment limitations (NQTLs). Standards for medical necessity, network adequacy, formulary design, prior authorization, step therapy, fail-first policies, and other non-quantitative limitations applied to MH/SUD must be applied no more stringently to MH/SUD than to medical/surgical benefits. NQTL parity is often the most complex aspect of MHPAEA compliance.

Documentation requirements

Under recent MHPAEA enforcement requirements, ABPs must maintain documentation of parity analysis and make this analysis available to enrollees, providers, and federal/state regulators upon request. Documentation must demonstrate that NQTLs are applied no more stringently to MH/SUD than to medical/surgical benefits.

Practical implications

For ABP enrollees, MHPAEA parity means that access to mental health and substance use disorder treatment cannot be more restricted than access to comparable medical care. If the ABP covers unlimited outpatient physical therapy visits, it cannot impose a visit limit on outpatient mental health therapy. If the ABP covers prescription drugs for diabetes without prior authorization, it generally cannot require prior authorization for psychiatric medications more stringently than for diabetes medications.

EPSDT preservation for children

Section 1937(b)(7) and 42 CFR 440.345

The Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit under Section 1905(r) of the Social Security Act is preserved for children under age 21 enrolled in an ABP. Section 1937(b)(7) and 42 CFR 440.345 require that EPSDT be provided as a wrap-around to the ABP benefit package.

What EPSDT requires

EPSDT under Section 1905(r) is one of the most comprehensive benefit standards in federal law. It requires:

Periodic comprehensive screenings. Comprehensive screenings at periodic intervals based on the state's periodicity schedule, generally aligned with the American Academy of Pediatrics Bright Futures schedule. Screenings include comprehensive health and developmental history, comprehensive unclothed physical examination, immunizations appropriate for age and health history, laboratory tests appropriate for age and risk factors, health education and counseling, and screening for emerging health conditions.

Vision services. Coverage of vision services on a periodic basis and as needed for diagnosis and treatment of vision problems. Includes eye examinations and corrective lenses (eyeglasses and contact lenses) when medically necessary.

Hearing services. Coverage of hearing services on a periodic basis and as needed for diagnosis and treatment of hearing problems. Includes hearing examinations and hearing aids when medically necessary.

Dental services. Coverage of dental services on a periodic basis as determined by reasonable standards of dental practice and as needed for treatment of dental conditions. Includes preventive services, diagnostic services, restorative services, endodontic services, periodontal services, oral surgery, and other medically necessary dental services.

Any other medically necessary service. Coverage of any medically necessary health care, diagnostic services, treatment, or other measures described in Section 1905(a) to correct or ameliorate defects, physical or mental illnesses, or conditions discovered through screening, whether or not such service is otherwise covered by the state plan or ABP.

The "correct or ameliorate" standard

The EPSDT "correct or ameliorate" standard is broader than the typical medical necessity standard. Services that prevent worsening of a condition, maintain functioning, or improve overall well-being can be covered under EPSDT even if they do not cure or completely resolve the condition. This standard is particularly important for children with chronic conditions, developmental disabilities, and other ongoing health needs.

Practical implications

For children in ABPs, EPSDT wrap-around effectively means that medically necessary services not in the ABP benefit package must still be covered. For example, if the ABP does not include certain therapies but a child needs them to correct or ameliorate a condition discovered through screening, EPSDT requires coverage. This preserves comprehensive coverage for children even when the ABP benefit package is narrower than the traditional state plan benefit package.

Cost-sharing under ABPs

General Medicaid cost-sharing rules

Cost-sharing under ABPs must comply with the general Medicaid cost-sharing rules at 42 CFR 447 Subpart A. Key requirements include:

• Nominal cost-sharing for most services
• Higher cost-sharing permitted for non-emergency use of emergency room
• Maximum aggregate cost-sharing limit based on a percentage of family income
• Exemptions from cost-sharing for certain populations and services

Exempted populations and services

Cost-sharing cannot be imposed on:

• Children under age 18
• Pregnant women (for pregnancy-related and any other services)
• Hospice patients
• Inpatients during institutional stays for which spend-down has been completed
• American Indians and Alaska Natives in certain circumstances
• Individuals receiving emergency services
• Family planning services
• Preventive services for children
• Certain other categorically-protected populations and services

ABP-specific considerations

ABPs cannot impose higher cost-sharing than would be permissible under the standard Medicaid state plan. The ABP framework does not authorize cost-sharing beyond the limits of 42 CFR 447 Subpart A.

For preventive services covered under ACA Section 2713 as part of the preventive services EHB category, no cost-sharing may be imposed. This includes USPSTF Grade A and B recommended preventive services, ACIP-recommended immunizations, and HRSA-recommended preventive services for women, infants, children, and adolescents.

State plan amendment process

Submitting an ABP SPA

To establish an ABP, a state submits a state plan amendment to CMS. The SPA must include:

1. Identification of the population to be covered through the ABP
2. Specification of the benchmark or benchmark-equivalent coverage
3. Detailed description of the benefit package (services covered, limits, prior authorization requirements)
4. Actuarial certification for benchmark-equivalent coverage
5. EPSDT wrap-around description for children
6. MHPAEA compliance documentation
7. Cost-sharing structure
8. Effective date
9. Other documentation required by CMS

CMS review

CMS reviews the SPA for compliance with Section 1937 and the implementing regulations at 42 CFR 440.305 through 440.395. CMS typically responds within 90 days, though complex SPAs may take longer. CMS may approve, request additional information, request modifications, or disapprove.

Effective date and amendment

Approved ABP SPAs become part of the state Medicaid plan effective as of the date specified (typically retroactive to the first day of a calendar quarter aligned with submission). The state may subsequently amend the ABP through additional SPAs to modify the benefit package, change benchmarks, expand or contract the covered population, or address other issues.

ACA Medicaid expansion and ABPs

Section 1902(a)(10)(A)(i)(VIII) new adult group

The ACA created a new mandatory eligibility category at Section 1902(a)(10)(A)(i)(VIII) for adults age 19 through 64 with income up to the threshold established by the ACA new adult group eligibility rules (approximately 138 percent FPL when accounting for the statutory income disregard under Section 1902(e)(14)). The new adult group includes childless adults and parents who were not covered under traditional Medicaid eligibility categories.

Mandatory ABP for new adult group

Section 1937(a)(2) requires that the new adult group be covered through an ABP. The ABP must include all ten EHBs, meet MHPAEA parity, and meet all other Section 1937 requirements. States adopting the expansion have flexibility in choosing the benchmark (often the state's own state plan benefit package under the Secretary-approved option) but must satisfy the ABP framework.

Supreme Court ruling making expansion optional

In National Federation of Independent Business v. Sebelius (2012), the Supreme Court held that the federal government could not coerce states to adopt the Medicaid expansion by threatening to withdraw existing Medicaid funding. The expansion became effectively optional for states.

Enhanced federal match

Section 1905(y) of the Social Security Act provides enhanced federal medical assistance percentage (FMAP) for the new adult group in expansion states:

• 100 percent FFP for the initial years of expansion (2014 through 2016)
• Gradually declining match in subsequent transition years
• 90 percent FFP for 2020 and subsequent years

The 90 percent enhanced match makes expansion a strong financial proposition for states. The federal government pays 90 cents of every dollar of new adult group medical assistance costs, compared to substantially lower standard Medicaid FMAPs for other populations.

National adoption status

As of 2026, most states have adopted full ACA Medicaid expansion. Several states have adopted expansion through state-specific demonstrations or limited approaches. Georgia is among the states that have not adopted full expansion.

Georgia's approach to ABPs and the coverage gap

Non-expansion status

Georgia has not enacted ACA Medicaid expansion. The state has not adopted Section 1902(a)(10)(A)(i)(VIII) coverage of the new adult group. This decision leaves a coverage gap for low-income adults in Georgia:

• Adults above traditional Medicaid eligibility thresholds (parents are typically eligible only up to very low income levels, and childless adults are generally not eligible at all under traditional Medicaid)
• And below 100 percent of federal poverty level (the eligibility floor for federal exchange premium tax credit subsidies under IRC Section 36B)

Adults in this gap have no affordable coverage option and remain uninsured at high rates.

Pathways to Coverage program

In response to the coverage gap and ongoing policy debate about expansion, Georgia established the Pathways to Coverage program under a Section 1115 demonstration waiver approved by CMS. Pathways to Coverage provides limited expansion coverage to adults up to 100 percent of FPL who meet work and reporting requirements.

Key features of Pathways to Coverage:

• Income eligibility: up to the income limit established by the Section 1115 demonstration
• Work requirement: a required number of qualifying activity hours per month (employment, education, vocational training, community service, certain other activities)
• Reporting requirement: monthly reporting of qualifying activity hours
• Premium requirement for some enrollees (the structure varies)
• Benefit package: ABP-like benefit structure including EHB categories

The Pathways to Coverage program operates under Section 1115 demonstration authority rather than under Section 1937 ABP framework directly. However, the benefit package design uses ABP-like structure with coverage of EHB categories.

Hypothetical full expansion in Georgia

If Georgia were to adopt full ACA Medicaid expansion in the future:

• The new adult group up to 138 percent FPL would be covered
• Coverage would be through an ABP under Section 1937
• The ABP would include all ten EHBs
• MHPAEA parity would apply
• EPSDT would apply to enrollees under 21
• Cost-sharing limits under 42 CFR 447 would apply
• Federal government would pay 90 percent of the cost under Section 1905(y)
• The coverage gap would close

Estimates suggest Georgia full expansion would cover hundreds of thousands of additional Georgians and bring substantial federal Medicaid funding to the state. The policy debate continues at the state legislative level.

Traditional state plan benefit package

For populations currently eligible under traditional Medicaid pathways (children, pregnant women, parents below traditional thresholds, ABD, dual eligibles, individuals receiving LTSS, etc.), Georgia provides the standard state plan benefit package, not an ABP. The Section 1937 ABP framework does not apply to these populations in Georgia.

CMS oversight

CMS State Medicaid Director Letters

CMS has issued guidance through State Medicaid Director Letters and Informational Bulletins on ABP implementation:

• Comprehensive guidance on ABP coverage requirements (issued 2012)
• EHB guidance for Medicaid (issued 2013)
• Subsequent Informational Bulletins on specific implementation issues

CMS Center for Medicaid and CHIP Services

The CMS Center for Medicaid and CHIP Services (CMCS) reviews and approves ABP state plan amendments, monitors compliance with EHB requirements and MHPAEA parity, and provides technical assistance to states.

CMS Region IV

For Georgia, CMS Region IV (Atlanta) provides regional oversight including ABP-related state plan amendments and Section 1115 demonstrations such as Pathways to Coverage.

Worked examples

Example 1: Marcus age 28 Atlanta Pathways enrollment

Marcus is a 28-year-old single adult in Atlanta with income at 75 percent of federal poverty level. He works part-time in a retail job. He has been uninsured for several years and now qualifies for Pathways to Coverage based on his income and work activity.

Enrollment and benefit experience:

Marcus applies through Georgia Gateway and submits documentation of his work hours. The state verifies eligibility and enrolls Marcus in Pathways to Coverage. He receives a benefit package structured around the EHB framework:

• Inpatient and outpatient hospital services
• Physician services and other ambulatory care
• Emergency services
• Behavioral health services (mental health and substance use disorder)
• Prescription drug coverage
• Preventive services (without cost-sharing)
• Laboratory and imaging services
• Limited dental and vision services

Marcus must continue monthly reporting of qualifying activity hours through Georgia Gateway. If he fails to report or fails to meet the monthly qualifying activity threshold, his eligibility can be suspended.

This benefit package illustrates how Pathways uses an ABP-like structure under Section 1115 demonstration authority. The framework is not identical to a Section 1937 ABP but shares many design features including EHB coverage and adherence to mental health parity.

Example 2: Sarah age 35 Macon medically frail

Sarah is a 35-year-old in Macon with severe major depressive disorder, generalized anxiety disorder, and PTSD. She has been hospitalized twice in the past 12 months for acute exacerbations. She has limited ability to work consistently. Her income places her in the coverage gap (above traditional parent Medicaid limits but with no qualifying child for traditional family Medicaid).

Pathways to Coverage and exemption considerations:

Sarah might consider applying to Pathways to Coverage. However, her significant mental health conditions raise the question of whether she would qualify as medically frail.

Under Section 1937(c)(2)(B), medically frail individuals (including those with disabling mental disorders) cannot be required to enroll in an ABP without their consent. In a Section 1937 ABP context, this would mean Sarah is exempted from mandatory ABP enrollment.

In Pathways to Coverage (operating under Section 1115 rather than Section 1937), the demonstration includes specific provisions regarding medically frail individuals. The work and reporting requirements include exemptions for medically frail individuals who cannot meet activity requirements due to their condition.

Sarah's most direct path to comprehensive coverage in Georgia is likely ABD Medicaid based on her disability determination. The Disability Adjudication Section would evaluate her under federal SSA disability standards. If determined disabled, she would qualify for ABD Medicaid with the traditional state plan benefit package, which is generally more comprehensive than ABP-like packages and is well-suited to ongoing severe behavioral health needs.

Example 3: Ahmed age 42 Savannah expansion-eligible hypothetical

Ahmed is a 42-year-old single father working full-time as a delivery driver in Savannah. His income places him just above the standard Medicaid parent threshold and just above the federal poverty level, putting him in the coverage gap. His daughter (age 8) is enrolled in PeachCare for Kids. Ahmed has no health insurance, his employer does not offer affordable coverage, and his income is too high for traditional Georgia parent Medicaid (which generally covers parents only at much lower income levels).

Current situation: Ahmed falls into the coverage gap. Traditional parent Medicaid is too narrow. Pathways to Coverage is limited to a lower income threshold. Federal exchange subsidies under IRC Section 36B require income at or above 100 percent FPL, and at Ahmed's income level marketplace coverage costs would be unaffordable without expansion.

If Georgia adopted full ACA Medicaid expansion:

• Ahmed would be eligible for the new adult group under Section 1902(a)(10)(A)(i)(VIII) at any income up to 138 percent FPL
• He would be enrolled in an ABP under Section 1937
• The ABP would cover all ten EHBs including ambulatory care, hospitalization, prescription drugs, mental health and substance use disorder services (with MHPAEA parity), preventive services (without cost-sharing), and other covered services
• Ahmed would have access to comprehensive preventive care, treatment of any chronic conditions, and emergency and inpatient care if needed
• Federal government would pay 90 percent of the cost (enhanced FMAP under Section 1905(y))

This example illustrates the population that would benefit from full expansion and the role of ABPs in structuring the expansion benefit package. Hundreds of thousands of Georgians are estimated to be in similar situations.

Example 4: Janet age 8 Augusta EPSDT preservation

Janet is an 8-year-old in Augusta enrolled in PeachCare for Kids (Georgia's CHIP program). PeachCare for Kids is Georgia's CHIP program. Although CHIP and ABPs are distinct programs, both rely on EHB-like benchmark coverage frameworks for separate state CHIP programs.

Janet has been newly diagnosed with type 1 diabetes following a comprehensive EPSDT screening at her annual well-child visit. Treatment requires multiple daily insulin injections, continuous glucose monitoring, frequent endocrinology follow-up, nutrition counseling, and ongoing diabetes self-management education.

EPSDT preservation:

Under EPSDT, Janet has access to any medically necessary service to correct or ameliorate her diabetes (a condition discovered through screening). This includes:

• Endocrinology specialist visits
• Continuous glucose monitor (CGM) devices and supplies
• Insulin pumps if medically necessary
• Insulin and other prescription medications
• Diabetes self-management education
• Nutrition counseling
• Mental health services to address diabetes-related psychological needs
• Hospitalizations as needed for DKA or other complications

EPSDT wrap-around ensures that any of these services not specifically in the benefit package are still covered. This is the broadest medical coverage standard in federal law and provides comprehensive protection for children with chronic conditions.

Example 5: David age 55 Albany pharmacy coverage

David is a 55-year-old hypothetical enrollee in a future Georgia ABP (under hypothetical full Medicaid expansion). His ABP includes prescription drugs as one of the ten Essential Health Benefits. David takes several daily medications including lisinopril for hypertension, atorvastatin for hyperlipidemia, sertraline for depression, and gabapentin for diabetic neuropathy.

Coverage under Section 1937(b)(5):

David's ABP must comply with Section 1937(b)(5) prescription drug requirements:

• All federally rebated drugs (drugs covered under Section 1927 federal rebate program) must be covered
• Federal upper limits apply to certain multi-source drugs
• Drug utilization review requirements apply
• Manufacturer rebates are collected
• Generic substitution rules apply

The ABP can implement a preferred drug list (PDL) and require step therapy or prior authorization for certain medications, but must provide a formulary exceptions process for medical necessity.

For one of David's medications (a brand-name version of a drug with multiple generic alternatives), the ABP requires step therapy: he must try a generic alternative first. David's physician documents that David previously tried the generic with intolerable side effects. The formulary exceptions process approves the brand-name medication based on medical necessity.

For David's other medications, the ABP covers them on the PDL without prior authorization.

This example illustrates how prescription drug coverage operates under the ABP framework and how the formulary exceptions process protects access when medical necessity is established.

Example 6: Tasha age 32 Columbus pregnancy mid-coverage

Tasha is a 32-year-old in Columbus who has been enrolled in Pathways to Coverage for the past 18 months. She works 25 hours per week as a customer service representative, earning approximately $14 per hour. She discovers she is 12 weeks pregnant.

Section 1937(c)(2)(A) exemption:

Under Section 1937(c)(2)(A), pregnant women whose eligibility is based on pregnancy are exempted from mandatory ABP enrollment. Although this is a Section 1937 protection and Pathways operates under Section 1115, both frameworks recognize that pregnant women retain the right to comprehensive coverage.

Tasha's options:

Tasha can transition to pregnancy Medicaid, which in Georgia covers pregnant women at substantially higher income levels than standard Medicaid. Pregnancy Medicaid provides the comprehensive state plan benefit package without the work and reporting requirements of Pathways.

Tasha's benefits under pregnancy Medicaid include:

• Comprehensive prenatal care (obstetric visits, ultrasounds, prenatal vitamins, screening tests)
• Labor and delivery coverage (vaginal or cesarean)
• Postpartum care (Georgia extended postpartum coverage to 12 months)
• Newborn coverage (automatically eligible for first year)
• Other medically necessary services

Tasha's transition to pregnancy Medicaid ensures comprehensive maternal and infant care without disruption. The 12-month postpartum extension provides ongoing coverage for postpartum medical and mental health needs.

Common misconceptions

"ABPs always provide less coverage than traditional Medicaid"

Partial truth. ABPs must cover the ten EHBs and meet MHPAEA parity. The benefit package may differ from the traditional state plan benefit package, but it cannot be less than the EHBs. For some services (especially habilitative services and behavioral health under parity), ABPs may provide more or differently-structured coverage than traditional state plans.

"Children in ABPs get less than traditional Medicaid"

False. EPSDT applies to children in ABPs as a wrap-around. Children receive any medically necessary service to correct or ameliorate conditions discovered through screening, whether or not such service is in the ABP benefit package. This is the broadest medical coverage standard in federal law and ensures children retain comprehensive coverage regardless of ABP enrollment.

"Georgia has adopted ABPs broadly"

False. Georgia has not adopted ACA Medicaid expansion. ABP usage in Georgia is limited to specific populations and the Pathways to Coverage program. Pathways operates under Section 1115 demonstration authority and uses an ABP-like benefit structure but is not a Section 1937 ABP strictly.

"ABPs allow states to dramatically cut Medicaid benefits"

Partial truth. ABPs allow states to use benchmark coverage rather than the traditional state plan benefit package, but the floor (EHBs plus mental health parity plus EPSDT wrap-around) is substantial. States cannot reduce coverage below this floor.

"If Georgia expanded, current Medicaid enrollees would lose their benefits"

False. Existing Medicaid enrollees in traditional categories (children, pregnant women, ABD, dual eligibles, individuals receiving LTSS, etc.) would continue to receive the standard state plan benefit package. The ABP framework would apply specifically to the new adult group created by expansion. Traditional populations are protected by the Section 1937(c) exemptions.

"Medically frail individuals cannot enroll in an ABP"

False. Medically frail individuals cannot be REQUIRED to enroll in an ABP without their consent. They retain the right to the standard state plan benefit package. However, they CAN voluntarily enroll in an ABP if it meets their needs. The exemption is a right, not a prohibition.

"ABPs and CHIP separate state plans are the same"

Partial truth. Both ABPs (under Section 1937) and CHIP separate state plans (under Title XXI) can use benchmark coverage frameworks. They are distinct programs with different statutory authorities and different requirements, but share some design features including EHB coverage.

Practical guidance for Georgia families

Understanding which benefit package applies to you

Most Georgia Medicaid enrollees in traditional eligibility categories receive the standard state plan benefit package, not an ABP. This includes:

• Children in Medicaid (PeachCare for Kids uses a CHIP benchmark framework, distinct from but related to ABP)
• Pregnant women
• Parents below traditional thresholds
• Aged, blind, and disabled (ABD) Medicaid enrollees
• Dual eligibles
• Individuals receiving long-term services and supports
• Section 1915(c) HCBS waiver participants

Pathways to Coverage participants receive an ABP-like benefit package under Section 1115 demonstration authority.

If Georgia adopts full ACA expansion in the future, new adult group enrollees would receive an ABP.

If you are enrolled in Pathways to Coverage

Maintain your monthly reporting of qualifying activity hours through Georgia Gateway. Failure to report or failure to meet the monthly qualifying activity threshold can result in suspension of coverage. If you are unable to meet the activity requirement due to medical conditions, illness, caregiving responsibilities, or other circumstances, inquire about exemptions and good-cause provisions.

If you become pregnant while enrolled in Pathways, transition to pregnancy Medicaid for more comprehensive maternal and infant coverage.

If you experience a significant medical condition that may qualify you as medically frail (severe mental health condition, serious chronic medical condition, significant disability), consult with a healthcare advocate or Georgia Legal Services about your options for transitioning to ABD Medicaid (if you meet disability standards) or other pathways with the standard state plan benefit package.

If you are concerned about benefit limitations

If your benefit package limits coverage of a service you believe is medically necessary, you have multiple options:

• For prescription drugs: Use the formulary exceptions process to request coverage of non-PDL medications based on medical necessity.
• For services subject to prior authorization: Work with your provider to document medical necessity and submit prior authorization requests with comprehensive supporting documentation.
• For services denied or limited: Appeal through the DCH or CMO appeals process. Section 1932(b)(4) and 42 CFR 438.400-438.424 establish appeal rights including internal appeal, external review, and state fair hearing.
• For mental health and substance use disorder service limitations that appear to violate MHPAEA parity: Document the parity concern and consult with DCH, CMS, or a parity advocacy organization. MHPAEA parity is enforceable and parity violations should be reported.

If you have children in an ABP

Children are entitled to EPSDT services as a wrap-around to any ABP. If your child needs a service that is not in the ABP benefit package, you have the right to request coverage under EPSDT based on the "correct or ameliorate" standard. If the request is denied, you have appeal rights including external review and state fair hearing.

Final notes

For Georgia families navigating Medicaid coverage and benefit packages, understanding the federal Section 1937 Alternative Benefit Plan framework is essential. Section 1937 of the Social Security Act, added by the Deficit Reduction Act of 2005 and substantially modified by the Affordable Care Act of 2010, authorizes states to provide Medicaid coverage to specific populations through ABPs that must cover the ten Essential Health Benefits, meet MHPAEA mental health parity requirements, be at least actuarially equivalent to one of four federal benchmark plans, preserve EPSDT for children, and exempt certain vulnerable populations from mandatory enrollment.

Georgia has not adopted ACA Medicaid expansion. The Section 1937 ABP framework therefore applies in Georgia only to specific populations, with the Pathways to Coverage program operating under Section 1115 demonstration authority using an ABP-like benefit structure. If Georgia were to adopt full expansion in the future, the new adult group up to 138 percent of federal poverty level would be covered through an ABP meeting all Section 1937 requirements, with the federal government paying 90 percent of the cost under Section 1905(y) enhanced FMAP.

Understanding the ABP framework helps Georgia families understand current coverage options, the role of Pathways to Coverage, and the implications of policy debates about full expansion. The framework also provides analytical structure for understanding benefit design choices and exemption rights for vulnerable populations.

Brevy at brevy.com is your digital ally helping you navigate Georgia Medicaid benefit packages, the ABP framework, the Pathways to Coverage program, and the Essential Health Benefits structure. This information is not legal-financial advice and is not a substitute for individualized counsel. For your specific situation, contact DCH at 1-866-211-0950, the Pathways to Coverage program, Georgia Legal Services Program at 404-377-0701, or consult with a qualified health benefits counselor or advocate.

::: accordion

What is Section 1937 of the Social Security Act?

Section 1937 of the Social Security Act, added by the Deficit Reduction Act of 2005 and substantially modified by the Affordable Care Act of 2010, authorizes states to provide Medicaid coverage to specific populations through Alternative Benefit Plans (ABPs) rather than the traditional state plan benefit package. ABPs must cover the ten Essential Health Benefits, meet mental health parity, be actuarially equivalent to a federal benchmark, and preserve EPSDT for children.

What are the ten Essential Health Benefits?

The ten EHB categories under Section 1302(b) of the ACA are: ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services (including behavioral health treatment), prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, and pediatric services including oral and vision care.

Which populations are exempted from mandatory ABP enrollment?

Section 1937(c) exempts populations including: pregnant women, individuals whose eligibility is based on blindness or disability, dual eligibles (Medicare and Medicaid), terminally ill in hospice, medically frail individuals (including those with disabling mental disorders, chronic substance use disorders, serious and complex medical conditions, or significant functional impairments), aged individuals, individuals in institutional care, individuals receiving long-term services and supports, Section 1931 medically needy, Section 1925 transitional medical assistance, TANF cash assistance recipients, and breast and cervical cancer treatment beneficiaries.

How does EPSDT apply to children in ABPs?

Under Section 1937(b)(7) and 42 CFR 440.345, EPSDT is preserved for children under age 21 enrolled in ABPs as a wrap-around to the ABP benefit package. Children receive any medically necessary service to correct or ameliorate physical or mental conditions discovered through screening, whether or not such service is in the ABP benefit package.

What is the Pathways to Coverage program?

Pathways to Coverage is Georgia's limited Medicaid expansion program under Section 1115 demonstration authority. It covers low-income adults who meet qualifying monthly activity requirements and monthly reporting requirements. The benefit package uses an ABP-like structure including Essential Health Benefits coverage. :::

Find personalized help navigating Georgia Medicaid benefit packages and the ABP framework at brevy.com.

::: cta Need help understanding Georgia Medicaid benefit packages, Pathways to Coverage, or the ABP framework? These resources can help.

• DCH Medicaid Member Services: 1-866-211-0950
• DCH Pathways to Coverage program (contact through DCH Member Services)
• DFCS Customer Service: 1-877-423-4746
• Georgia Gateway: gateway.ga.gov
• DCH Office of Appeals (contact through DCH Member Services)
• HealthCare.gov: 1-800-318-2596
• Georgia Legal Services Program: 404-377-0701
• Atlanta Legal Aid Society (contact through Georgia Legal Services Program)
• Georgia Watch consumer advocacy
• AARP Georgia: 1-866-295-7283
• 211 Georgia: dial 211
• Georgia Council on Aging
• Mental Health America of Georgia
• National Alliance on Mental Illness Georgia: 770-234-0855
• CMS Region IV (Atlanta): federal Medicaid oversight :::