---
kind: "section"
citation: "42 C.F.R. § 457.1015"
title: "42"
number: "457.1015"
heading: "Cost-effectiveness."
url: "https://uscodex.org/cfr/42/457.1015"
---

# §457.1015. Cost-effectiveness.

- (a) **Definition.** For purposes of this subpart, “cost-effective” means that the State's cost of purchasing family coverage that includes coverage for targeted low-income children is equal to or less than the State's cost of obtaining coverage under the State plan only for the eligible targeted low-income children involved.
- (b) **Cost comparisons.** A State may demonstrate cost-effectiveness by comparing the cost of coverage for the family to the cost of coverage only for the targeted low-income children under the health benefits package offered by the State under the State plan for which the child is eligible.
- (c) **Individual or aggregate basis.**
  - (1) The State may base its demonstration of the cost-effectiveness of family coverage on an assessment of the cost of family coverage for individual families, done on a case-by-case basis, or on the cost of family coverage in the aggregate.
  - (2) The State must assess cost-effectiveness in its initial request for a waiver and then annually.
  - (3) For any State that chooses the aggregate cost method, if an annual assessment of the cost-effectiveness of family coverage in the aggregate reveals that it is not cost-effective, the State must assess cost-effectiveness on a case-by-case basis.
- (d) **Reports on family coverage.** A State with a waiver under this section must include in its annual report pursuant to [§ 457.750](/cfr/42/457.750.md), the cost of family coverage purchased under the waiver, and the number of children and adults, respectively, covered under family coverage pursuant to the waiver.

## Notes

### Source

Source: 66 FR 2686, Jan. 11, 2001, unless otherwise noted.

### Authority

Authority: 42 U.S.C. 1302.

### Source

Source: 65 FR 33622, May 24, 2000, unless otherwise noted.