HHS Details Limits to Medicaid Expansion

States that don't expand their Medicaid rolls to include residents at 133% of the federal poverty level won't get 100% of the matching federal funds made available under the Patient Protection and Affordable Care Act, the nation's governors were told Monday.

"Congress directed that the enhanced matching rate be used to expand coverage to 133% of FPL. The law does not provide for a phased-in or partial expansion. As such, we will not consider partial expansions for populations eligible for the 100% matching rate in 2014 through 2016," said a 17-page memorandum sent by Health and Human Services Secretary Kathleen Sebelius.

The memorandum, which touched upon what HHS said were 39 frequently asked questions about Medicaid expansion, market reforms, and healthcare exchanges, left the door slightly open for states that design demonstration programs.

"If a state that declines to expand coverage to 133% of FPL would like to propose a demonstration that includes a partial expansion, we would consider such a proposal to the extent that it furthers the purposes of the program, subject to the regular federal matching rate," said the notice, the 26th item buried on page 11 in the memo.

"For the newly eligible adults, states will have flexibility under the statute to provide benefits benchmarked to commercial plans and they can design different benefit packages for different populations. We also intend to propose further changes related to cost sharing."