Published on 24 April 2012
Medicaid Expansion under ACA: New CMS Rules on Medicaid Eligibility Expansion and Streamlined Enrollment

Medicaid enrollment is expected to increase dramatically starting in 2014 under the Affordable Care Act (ACA).  New final and interim final rules from the Centers for Medicare and Medicaid Services (CMS) significantly expand Medicaid eligibility for adults under age 65 and streamline existing Medicaid eligibility and enrollment processes.

These new federal policies will increase Medicaid enrollment by 15 million in 2014, 21 million by 2015, 24 million by 2016, and 28 million by 2019, according to projections by the CMS Office of the Actuary (OACT).  This means CMS expects national Medicaid enrollment to increase 40% by 2016, with some states seeing increases of well over 50%.  This is far higher than earlier, pre-rule estimates from the Congressional Budget Office (CBO), which had assumed about 16 million new Medicaid enrollees by 2016.

In addition to expanding Medicaid eligibility to most adults under 65 with incomes below 138 percent of the federal poverty level (FPL), the new CMS rules will also make it much easier for individuals to apply for Medicaid and thereafter continue enrollment.  This means far more individuals with longer, uninterrupted enrollment in Medicaid fee-for-service and Medicaid health plans.

CMS’ new Medicaid eligibility and enrollment rules:

  1. Expand Medicaid eligibility for non-disabled adults, per the ACA, using the modified adjusted gross income (MAGI) test and the 138 percent of FPL ceiling.
  2. Simplify Medicaid eligibility categories for existing non-MAGI eligibles, which are notoriously complex.
  3. Modernize eligibility verification rules, relying primarily on electronic data sources.
  4. Streamline Medicaid and Children’s Health Insurance Program (CHIP) application and renewal.
  5. Coordinate eligibility across Medicaid, CHIP, and the Health Insurance Exchange (HIX).

The final regulations provides states with increased flexibility but mandates that state Medicaid and CHIP agencies offer seamless, coordinated, and prompt eligibility determination processes for both the MAGI and non-MAGI eligibility groups.  The new rules are highly complex and will require massive systems and operational changes by state Medicaid agencies between now and January 2014.  The team at Sellers Dorsey is busy helping health plans, states, and other healthcare organizations adapt to these and changes under the ACA.

To better understand the new Medicaid rules, there are a couple helpful briefing documents.

The National Association of Medicaid Directors (NAMD) released a public memo providing a high level summary of some of the key changes from the proposed rule from the perspective of Medicaid directors. NAMD’s memo also includes detailed summary of CMS’ responses to NAMD’s comments on the proposed regulation.  To read or download a copy of the NAMD brief, click here (PDF).

An issue brief from the State Health Reform Assistance Network provides a summary, focusing on key areas where CMS has changed or expanded upon previous requirements for states, as well as a section-by-section summary of the ACA Medicaid eligibility regulations.  To read or download this brief, click here (PDF).

About Author

An expert on Medicaid, Medicare, and health reform, Kip Piper, MA, FACHE, is a consultant, speaker, and author. Kip Piper advises health plans, hospitals and health systems, states, and pharma, biotech, medical device, HIT, and investment firms. With 30 years’ experience, Kip is a senior consultant with Sellers Dorsey, top specialists in Medicaid and health reform. He is also a senior advisor with Fleishman-Hillard and TogoRun. For more, visit KipPiper.com. Follow on Twitter @KipPiper, Google +, Facebook and connect on LinkedIn.

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