Final Rule Released for Medicaid Expansion

The Department of Health and Human Services released Friday its final rules for the expansion of the Medicaid program under the Patient Protection and Affordable Care Act.

The final rule, which becomes effective Jan. 1, 2014, expands access to the Medicaid and the Children's Health Insurance Program (CHIP), establishes eligibility and enrollment provisions for health insurance exchanges, simplifies the application and renewal processes for the program, eliminates obsolete eligibility categories, and establishes a single income standard for determining eligibility.

"The Medicaid improvements in the Affordable Care Act will help simplify the system and ensure all Americans have the affordable high-quality coverage they need," said Department of Health and Human Services Secretary Kathleen Sebelius in a press statement.

The final rule comes just as the federal Department of Justice prepares to defend later this month the ACA in a Supreme Court case. The Medicaid expansion, which could add as many as 17 million people to its rolls, is among the challenges to the ACA. The state of Florida has formally challenged the authority of Congress to expand the Medicaid program.

Highlights of the final rule include:

• The creation of four major eligibility groups: children, pregnant women, parents and caretaker relatives, and a new adult group comprising individuals aged 19 to 64 years old who aren't eligble for Medicare or Medicaid and whose household income is at or below 133% of the federal poverty level ($14,856 for an individual and $30,656 for a family of four).
• Establishment of the modified adjusted gross income (MAGI) standard for determining financial eligibility for most Medicaid and CHIP enrollees.
• Creation of a federal data services hub to link states with federal data sources such as the Social Security Administration and the Department of Homeland Security.
• Design of a single, online application to allow families to enroll in a coverage program.
• Provision of two ways for health insurance exchanges to perform Medicaid-eligibility evaluations. The HIX can conduct complete eligibility determinations for Medicaid, or make a preliminary assessment and then rely on the state Medicaid agency for a final decision.
• A guarantee that the federal government will pay 100% of the cost of the Medicaid expansion for the first three years and at least 90% after that.

A portion of the 268-page final rule is issued on an interim basis. HHS will consider additional public comments for 45 days for several provisions, including certain data reporting requirements and timeliness standards for making eligibility determinations.