Medicaid Expansion

In an effort to extend health care coverage, the ACA will give states the option of expanding Medicaid eligibility. Details of the Medicaid expansion are as follows:

• The expansion will allow for Medicaid coverage of all legal resident childless adults with an income at or below 133% of the federal poverty level, with a 5% income disregard. It is estimated that, as a result of the Medicaid expansion, up to 16 million additional individuals could become eligible for Medicaid, representing a 30% potential increase in the number of Medicaid enrollees.
• For states that choose to participate, the expansion will begin on January 1, 2014, unless states choose to expand their Medicaid eligibility early. In the meantime, states will be required to maintain their current levels of coverage under so-called “maintenance of effort” (MOE) provisions.
• For the newly eligible population, the ACA increases the rate of Federal Medical Assistance Percentages (FMAP) to states as follows: 

2014 through 2016	100% federally funded (FMAP)
2017	95% federally funded
2018	94% federally funded
2019	93% federally funded
2020 onwards	90% federally funded

• To receive full federal matching funds, states must expand Medicaid to 133% of the federal poverty level. States that wish to engage in only a partial expansion will not be eligible for enhanced FMAP rates.
• For states that expanded their Medicaid programs prior to December 1, 2009, the federal government will provide an alternate increased FMAP to match expenditures for adults who would otherwise be considered newly eligible.

The Supreme Court has ruled that states are not required to expand Medicaid eligibility, and that the federal government is not permitted to withhold full Medicaid funding from states that choose not to participate in Medicaid expansion. To date, 27 states and the District of Columbia have indicated that they intend to participate in Medicaid expansion, 20 states have indicated that they do not intend to participate, and 3 states remain undecided.