Medicaid Eligibility and Enrollment: 2014

Under the provisions of the Patient Protection and Affordable Care Act (ACA), the expansion of Medicaid to low-income adults and the launch of new Medicaid eligibility and enrollment processes will begin to go into effect in early 2014. In the past 12 months, states have prepared for these changes, but according to a new report by The Kaiser Commission on Medicaid and the Uninsured, the readiness varies considerably among the 50 states. Kaiser compiled this report from data released by the Centers for Medicare & Medicaid Services (CMS).

Under the ACA, states will be transforming their processes to align eligibility requirements for Medicaid, Children’s Health Insurance Program (CHIP), and premium tax credits in the new health insurance marketplaces. Streamlining and modernizing the application experience and moving toward a coordinated enrollment system across health coverage programs will also be a part of this endeavor.

Medicaid Expansions

As a result of a Supreme Court ruling on the ACA, implementation of the Medicaid expansion is now up to each state. As of press time, 26 states, including Washington, DC, are moving forward with this Medicaid expansion. These 26 states include Hawaii, Washington, Oregon, California, Nevada, Arizona, Colorado, New Mexico, North Dakota, Minnesota, Iowa, Illinois, Arkansas, Michigan, Ohio, West Virginia, Kentucky, Maryland, Delaware, New Jersey, New York, Connecticut, Rhode Island, Massachusetts, Vermont, and Washington, DC.

There are currently no deadlines in place for implementation; however, states that delay the Medicaid expansion will miss out on the opportunity to receive the 100% federal funding for newly eligible individuals available between 2014 and 2016.

Expanded Eligibility

In 2014, the ACA will expand Medicaid to nearly all adults with incomes at or below 138% of the federal poverty level (FPL).

The ACA also changes how financial eligibility will be determined for Medicaid beneficiaries; beginning in January, financial eligibility for parents, pregnant women, children, and the expansion adults will be based on Modified Adjusted Gross Income (MAGI). Thus, states will need to convert their preexisting Medicaid and CHIP eligibility levels to be MAGI-equivalent.

The use of MAGI will help to: (1) maintain Medicaid and CHIP eligibility levels for children through October 1, 2019; (2) establish minimum eligibility thresholds for parents, pregnant women, and other adults; (3) determine the income levels at which premiums will apply; and (4) calculate the availability of the enhanced matching rate for newly-eligible adults.

The Coverage Gap

In 21 of the 25 states not expanding Medicaid coverage, eligibility levels for parents will be below 100% of the FPL. In the 25 states not expanding coverage, the median eligibility level for parents will be just 47% of the FPL. Also, adults without dependent children will generally remain ineligible for full Medicaid coverage.

In addition, in the 25 states not expanding, nearly 5 million poor adults will fall into the “coverage gap,” leaving them uninsured. Those in this gap earn too much to qualify under their state’s current Medicaid eligibility guidelines and earn too little to qualify for premium tax credits to purchase coverage through the new marketplaces. More than one-third of individuals who fall into this coverage gap reside in Texas (22%) and Florida (16%).

Medicaid and CHIP coverage for children will remain strong in the coming year, with the median eligibility level at 255% of the FPL. The shift from CHIP to Medicaid must occur regardless of whether the state is expanding Medicaid to adults.

As for pregnant women, 2 states will be reducing eligibility for this group. Oklahoma and Virginia will reduce eligibility for pregnant women from 185% to 133% of the FPL and 200% to 143% of the FPL, respectively. Louisiana has also indicated plans to reduce eligibility; however, the CMS data as of November 15, 2013, did not reflect this. Overall, the median eligibility for pregnant women as of January will be 203% of the FPL, with 31 states, including Washington, DC, covering pregnant women at or above 200% of the FPL.

Coverage for parents and childless adults will lag behind that of pregnant women and children. For parents in states moving forward with Medicaid expansion, the median eligibility will be 138% of the FPL, and for parents in states not moving forward with expansion, it will be 47% of the FPL. For childless adults in states moving forward with the expansion, the median eligibility will be 138% of the FPL, while childless adults in states not expanding will see 0% of the FPL.

The Enrollment Process

Under the ACA, the application process, coordinating of enrollment, and moving toward paperless verification needs to be streamlined and simplified. States have the option to use the US Department of Health and Human Services (HHS) application or a state alternative version can be developed. According to the Kaiser report, most states (43 vs 7) will use a state alternative for their online application; however, not as many states (30 vs 20) will use a state alternative for their paper application.

All of these Medicaid provision have been impacted by the health insurance exchange Web site issues that have plagued the ACA over the past 2 months. This has carried over into delaying the Medicaid expansion and coordination. Some states have reported success in enrolling people in Medicaid and several have gotten a jumpstart thanks to the enrollment strategies offered by CMS.