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Update on state Medicaid expansion under the Affordable Care Act

Twenty states and the District of Columbia plan to expand their Medicaid program under ACA, according to information provided by the Commonwealth Fund. Under the ACA, as of Jan. 1, 2014, Medicaid eligibility will be expanded to reach all children and adults under age 65 with incomes at or below 133 percent of the federal poverty level. On June 28, 2012, the U.S. Supreme Court upheld the ACA; however, the Court’s ruling allows the ACA’s Medicaid expansion to proceed, but without a provision threatening non-compliant states with the loss of their existing Medicaid funding. As a result, states can either opt-in or opt-out of the Medicaid expansion provision.

According to information released by the Department of Health and Human Services, there will be no deadline for states to decide whether to participate in the Medicaid expansion; however, the longer states take to opt-in, the less that state will receive in federal matching funds. Specifically, ACA provides 100 percent federal-matching funding for covering newly eligible Medicaid recipients in states that choose to expand for 2014, 2015 and 2016. For later years, the federal match decreases until it reaches 90 percent for 2020 and subsequent years.

Arkansas, Indiana, Iowa and Michigan are currently pursuing alternative Medicaid expansion plans.

ArkansasArkansas submitted a Section 1115 Demonstration Waiver application to the U.S. Department of Health and Human Services (HHS) that, if approved by HHS, will allow the state to move forward with the Health Care Independence Program (the official name of the Private Option). According to the 1115 waiver application, Arkansas will use premium assistance to purchase qualified health plans (QHPs) offered in the individual market through the marketplace for individuals eligible for coverage under Title XIX of the Social Security Act. Eligible individuals are either (1) childless adults between the ages of 19 and 65 with incomes at or below 138 percent of the federal poverty level (FPL) who are not enrolled in Medicare or incarcerated or (2) parents between the ages of 19 and 65 with incomes between 17 percent and 138 percent FPL who are not enrolled in Medicare or incarcerated (collectively “Private Option beneficiaries”). Private Option beneficiaries will receive the Alternative Benefit Plan (ABP) through a QHP that they select and have cost-sharing obligations consistent with both the State Plan and with the cost-sharing rules applicable to individuals with comparable incomes in the marketplace.

Additionally, Arkansas will provide through its fee-for-service Medicaid program wrap-around benefits that are required for the ABP but not covered by QHPs—namely, non-emergency transportation and Early Periodic Screening Diagnosis and Treatment (EPSDT) services for individuals participating in the Demonstration who are under age 21 (including pediatric vision and dental services, as well as other EPSDT services to the extent such services are not covered under the QHP). EPSDT services are relevant to the Private Option because the ACA defines 19 and 20 year olds as children for purposes of service benefit requirements, but adults for purposes of eligibility.

indianaOn Sept. 3, the Centers for Medicare & Medicaid Services (CMS) approved a one-year extension of Indiana’s Section 1115 Healthy Indiana Plan (HIP) Demonstration. However, as a condition of approval, CMS is requiring the state to cut its income cap for eligibility by half, from 200 percent of the FPL to 100 percent of the FPL, in light of increased coverage options as a result of the new health insurance marketplaces. In addition, CMS is requiring Indiana to develop a transition plan to transfer coverage to people currently enrolled in the demonstration with incomes above that new eligibility level. According to staff from the Indiana Family and Social Services Administration, currently the HIP does not cover vision, dental or maternity services and that will not change with CMS’ one-year extension.

Iowa The final Iowa Wellness Plan and Iowa Marketplace Choice Plan 1115 Demonstration Waiver applications were submitted to CMS on August 20. Iowa is currently awaiting a response from CMS. The three components of the Iowa Health and Wellness Plan are: (1) the Iowa Wellness Plan serving eligible individuals with income up to and including 100 percent of the FPL and medically frail eligible individuals with income up to and including 133 percent of the FPL through a 1115 demonstration that promotes coordinated care, managed care and the development of accountable care organizations; (2) the Marketplace Choice Plan serving non-medically frail individuals with income 101 percent of the FPL up to and including 133percent of the FPL by offering premium assistance for eligible individuals to enroll in Qualified Health Plans (QHPs) through the health insurance marketplace; and (3) providing premium assistance for individuals with income up to and including 133 percent of the FPL who have access to cost-effective employer sponsored insurance (ESI) coverage under Iowa’s Health Insurance Premium Payment (HIPP) Program.


The Michigan Legislature passed H.B. 4714 on Sept. 3, and the bill was presented to the governor for approval on Sept. 11. The bill would provide for the expansion of the state Medicaid program as permitted under the ACA, effective on Jan. 1, 2014, and would require the state to seek waivers from the federal government to allow for modifications to the Medicaid program.

To learn which states plan to expand their Medicaid program under the ACA and which states plan to opt-out, click on the interactive U.S. map. The map also provides users with up-to-date information on state Medicaid expansion status under the ACA, as well as data on the impact of the expansion on the uninsured population in each state. Please be aware that the information on this map is fluid and will change as some states continue to consider legislation related to Medicaid expansion and others await federal approval of alternative Medicaid expansion plans.

Source: September ADEA State Update 

This content was originally published in the Oct. 2013 issue of Advocacy Brief.


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