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CMS won't reward 'partial' Medicaid expansion

December 11, 2012
by Dennis Grantham, Editor-in-Chief
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Partial or phased-in state Medicaid expansions not eligible for 'enhanced' federal match, Sibelius says

In a statement approving the formation of health insurance exchanges in six states--Colorado, Connecticut, Massachusetts, Maryland, Oregon, and Washington--the Obama Administration yesterday clarified that it intends to stick to the Medicaid expansion goal outlined in the Affordable Care Act:  to extend Medicaid coverage under the Medicaid expansion to families with incomes at or below 133% of the poverty level.

The administration’s position was made clear in a December 10 letter by Secretary of Health and Human Services Kathleen Sebelius, who stated that “the law does not create an option for enhanced match for a partial or phased-in Medicaid expansion to 133 percent of poverty,” but that “ we will consider waivers at the regular matching rate now and, in 2017 when the 100 percent federal funding for the expansion group is slightly reduced, broad-based State Innovation Waivers.”  

The new guidance from CMS apparently puts to rest ideas advanced by some state governors who, fearing the costs of a sudden increase in their states' Medicaid enrollment, proposed a gradual or phased approach to implementing the ACA's Medicaid expansion.

In a related list of frequently asked questions also released on December 10, CMS offered a series of clarifications on the implementation of state insurance exchanges, market reforms, and Medicaid. CMS said that State-Based Exchange applications are due by December 14, while State Partnership Exchange applications are due by February 15, 2013. Any state may apply at any time to run its own exchange in future years.

To help states manage the costs of qualifying individuals for coverage under the Medicaid expansion, CMS also explained that it is providing 90 percent federal matching funds for state efforts to develop systems that coordinate coverage between its Medicaid expansion and insurance exchange populations. This “90/10” funding for eligibility systems remains available through December 31, 2015 for states regardless of their decisions on Medicaid expansion, while a “75/25” federal match for the costs of maintaining and operating such systems remains available indefinitely.