What is an Alternative Benefit Plan, and does it include NEMT?
An Alternative Benefit Plan (ABP) is the benchmark-style Medicaid package states must use for the adult expansion group and may use for some others. Even when the plan itself leaves out transportation, federal law requires the state to assure emergency and non-emergency rides to covered care. The exceptions come from section 1115 waivers. Iowa's drops NEMT for most expansion adults through December 31, 2026.
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What an ABP is
An Alternative Benefit Plan is a Medicaid benefit package built on a benchmark plan instead of the traditional state plan. Section 1937 of the Social Security Act created the option, and 42 CFR part 440, subpart C carries it out. Adults in the Medicaid expansion group must be enrolled in one. States may also use ABPs for other groups, with limits.
A state builds its ABP on one of four benchmarks:
- The standard Blue Cross Blue Shield preferred provider plan offered to federal employees.
- The coverage generally available to the state’s own employees.
- The HMO plan with the largest commercial, non-Medicaid enrollment in the state.
- Coverage the Secretary of Health and Human Services approves as meeting the group’s needs.
Whatever the base, an ABP must include at least the ten essential health benefit categories, family planning, and access to the full EPSDT benefit for members under 21.
The transportation rule for ABPs
Transportation is not on the essential health benefit list, so it has its own rule. 42 CFR 440.390 says that if a benchmark plan does not include transportation to and from medically necessary covered services, the state must still assure that emergency and non-emergency transportation is covered for its members.
Congress later wrote substantially the same duty into section 1937 itself, through section 209 of the Consolidated Appropriations Act, 2021. CMS’s 2023 transportation guide adds that a state may limit ABP rides in amount, duration, and scope, as long as the limits are reasonable and do not undercut the assurance of transportation itself.
Where waivers took rides out
Both states below run their programs for expansion adults under a section 1115 waiver, and both left NEMT out for part of the group.
| State | Who is affected | Who keeps rides | Status |
|---|---|---|---|
| Iowa | Iowa Health and Wellness Plan members (expansion adults) | Members found medically frail, and rides to EPSDT services | The NEMT waiver sunsets December 31, 2026. From January 1, 2027, NEMT covers everyone in the group. |
| Indiana | HIP Basic and HIP Plus members, whose benefits are based on approved ABPs | HIP State Plan members (medically frail, low-income parents and caretakers, 19 and 20 year old dependents, transitional medical assistance) and HIP Maternity | HIP runs under a demonstration approved from January 1, 2021 through December 31, 2030 |
Medically frail adults are exempt from mandatory ABP enrollment under federal rules. That is why both states keep rides for them.
Checking a rider’s coverage
- Read the benefit plan, not just “Medicaid”. In Indiana, the eligibility system names the HIP benefit plan, and only some HIP plans include NEMT.
- Ask about medical frailty. A rider in HIP Plus with a serious condition may qualify for a State Plan option that includes rides. The member works that out with the state and their health plan.
- Watch the date. For Iowa, expansion adult ride requests that would have been turned down in 2026 become covered on January 1, 2027. The same adults also face new rules that year, covered in the guide to Medicaid work requirements and NEMT.
Setting up newly covered riders
A rider who gains a ride benefit often has a regular appointment, such as weekly therapy. In HealthRide you schedule that trip once as a recurring series, and it keeps coming back on the board. See recurring trips.
Frequently asked questions
- Do all Medicaid expansion adults get NEMT?
- Most do, because every ABP must come with the transportation assurance. The gaps come from section 1115 waivers. Iowa waives NEMT for most expansion adults until its waiver ends on December 31, 2026, and Indiana's HIP Basic and HIP Plus benefit plans do not list non-emergency transportation.
- Is NEMT an essential health benefit?
- No. Transportation is not one of the ten essential health benefit categories that every ABP must include. The ride requirement sits in its own rule, 42 CFR 440.390, which makes the state assure emergency and non-emergency transportation to covered care even when the plan leaves it out.
- Who is exempt from being placed in an ABP?
- Federal rules exempt groups such as people who are medically frail, pregnant women, people who are blind or disabled, Medicare enrollees, hospice patients, and the medically needy. Exempt adults in the expansion group must be given the option of an ABP that includes every benefit in the approved state plan.
- Do 19 and 20 year olds in an ABP get EPSDT rides?
- Federal rules say yes. An ABP must give members under 21 access to the full EPSDT benefit, and federal EPSDT rules require the state to offer help with transportation. Iowa's waiver leaves rides to EPSDT services in place. Indiana covers EPSDT for all 19 and 20 year olds in its Healthy Indiana Plan, HIP Basic included.
