How the Affordable Care Act Affects Medicaid

Background

The 2010 Affordable Care Act ( ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. ) includes provisions that improve and strengthen Medicaid. These include a state option to expand Medicaid eligibility, expansion of coverage for Medicaid-covered preventive services, an option to cover health homes, and, enrollment simplification requirements.

Eligibility expansion—under the ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. , states may expand Medicaid eligibility to cover adults without dependent children if their incomes are at or below 138 percent of the federal poverty The federal government defines “poverty” as income below specific amounts that the Bureau of the Census establishes. These thresholds, known as federal poverty levels (FPL), are adjusted annually for inflation and vary according to family size and the age of the head of the family. … level. States choosing this option receive enhanced federal funds to pay for it. This option eliminates an asset test for determining eligibility and uses a modified adjusted gross income (MAGI) standard to determine income eligibility. MAGI is defined as an individual’s or a couple’s gross income (for federal tax purposes), with adjustments that add back in foreign income and tax-exempt interest.

When people who qualify for Medicaid under the expansion option become eligible for Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… , they are required to give up their Medicaid expansion coverage. However, some of them will be still be eligible for coverage under traditional Medicaid rules because they meet a state’s income and asset requirements. Others may be able to get help with their Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… cost-sharing obligations through one of the Medicare Savings Programs A term used to refer collectively to several programs established under federal law to provide additional financial protections (such as assistance with premiums and/or cost-sharing) to low-income Medicare beneficiaries who meet income and asset criteria. The Medicare Savings Programs… ( MSPs A term used to refer collectively to several programs established under federal law to provide additional financial protections (such as assistance with premiums and/or cost-sharing) to low-income Medicare beneficiaries who meet income and asset criteria. The Medicare Savings Programs… ) (see also this chapter’s section on Health Care Coverage: Medicaid—Medicaid Assistance for Medicare Beneficiaries with Low Incomes). Thus, individuals with low incomes who are transitioning from the Medicaid expansion into Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… must receive timely outreach and education so that they are aware of and gain access to these important benefits.

Legal immigrants—legal immigrants who have lived in the U.S. for less than five years may only access Medicaid if they need emergency services or if the state pays 100 percent of their costs. The ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. allows legal immigrants who have not yet met that requirement to buy coverage and receive subsidies through the health insurance exchanges.

Selected U.S. territories—in general, territories must operate Medicaid within broad federal guidelines and under federally approved plans. But American Samoa and the Northern Mariana Islands have federal waivers that exempt them from federal eligibility rules. The remaining territories have some leeway in how they cover their Medicaid populations. Federal Medical Assistance Percentage (FMAP) for the territories is set by statute at 50 percent.

Preventive services—the ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. expands Medicaid coverage to include certain clinical preventive services and recommended vaccines, and also allows states to choose to make these services available to enrollees without cost-sharing. States that do so qualify for a 1-percentage-point FMAP increase.

Health homes—the ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. gives state Medicaid programs the option to enroll individuals with chronic conditions in a health home. Health homes are composed of a team of health professionals who provide a comprehensive set of medical services, including care coordination. To qualify, individuals must have at least two chronic conditions, have one chronic condition and be at risk for a second, or have one serious and persistent mental health condition.

Enrollment simplification—the ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. requires states to conduct a range of activities to reduce enrollment barriers in Medicaid. Examples include enrollment simplification requirements, making enrollment options for other low-income programs available on websites, and conducting more outreach to potentially eligible people.

States are required to:

  • create procedures that allow people to apply for, become enrolled in, or renew enrollment in Medicaid or a waiver program on a website that is linked to the state’s exchange website and the state’s Children’s Health Insurance Program (CHIP) website;
  • conduct outreach to and enroll members of vulnerable and underserved populations who are eligible for Medicaid or CHIP;
  • allow people to enroll or re-enroll using an electronic signature;
  • ensure that applicants for Medicaid under the state plan or a waiver, as well as those who apply for CHIP but are found ineligible, are screened for eligibility for a qualified exchange plan and any premium assistance;
  • create procedures for using the state’s website to enroll those who have been identified by the exchange as being Medicaid-eligible under a state plan or waiver, or as CHIP-eligible, without any further enrollment determination by the state; and
  • ensure the use of a secure electronic interface that can make eligibility determinations for Medicaid, CHIP, premium assistance, or enrollment in a qualified health plan; and
  • conduct outreach to and enroll members of vulnerable and underserved populations who are eligible for Medicaid or CHIP.

Payment provisions for health care-acquired conditions—the ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. does not allow Medicaid payments for certain health care-acquired medical conditions that can be prevented by providers. Applicable rules set minimum conditions under which providers will not be paid for certain preventable conditions in inpatient hospitals and other health care settings.

Disproportionate share hospital payments—the ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. reduces states’ disproportionate share hospital (DSH) allotments by amounts ranging from 25 percent to 50 percent once the state’s uninsured rate decreases by 45 percent. As the rate of uninsurance continues to decline, states’ DSH allotments will be reduced by corresponding amounts.

Medicaid and CHIP Payment and Access Commission—the ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. expands the duties of the Medicaid and CHIP Payment and Access Commission (MACPAC) to include coordinating with the Medicare Authorized in 1965 under Title XVIII of the Social Security Act, Medicare provides health insurance coverage for people age 65 and older and for some disabled people under age 65. This federal program consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), Part… Payment Advisory Commission (MedPAC), especially with respect to dually eligible beneficiaries. The ACA Comprehensive health care reform legislation passed by Congress and signed into law on March 23, 2010. also changes the MACPAC’s reporting requirements and provides funding for the body.

HOW THE AFFORDABLE CARE ACT AFFECTS MEDICAID: Policy

Participation and coverage

In this policy: FederalState

Federal and state governments should:

  • ensure that all people living at or below 138 percent of the federal poverty The federal government defines “poverty” as income below specific amounts that the Bureau of the Census establishes. These thresholds, known as federal poverty levels (FPL), are adjusted annually for inflation and vary according to family size and the age of the head of the family. … level are covered by Medicaid;
  • increase Medicaid participation among eligible people of all ages, and
  • ensure adequate provider participation in Medicaid, including participation by dental and long-term services and supports Also known as Long-term Care (LTC), LTSS encompass a broad range of assistance needed by people of all ages who have cognitive or mental impairments and who may lack the physical ability to function independently.  In their basic form, LTSS consist of help with self-care and… providers.

Expansion of eligibility and services

In this policy: State

All states should elect the option to expand Medicaid to cover uninsured populations with low incomes.

States should exercise available options to cover optional services, including the Program of All-Inclusive Care for the Elderly (known as PACE) and dental services for adults.

Enrollment expansion and outreach

In this policy: State

States should conduct robust outreach and enrollment activities to identify newly eligible individuals. These efforts must be tailored to meet the needs of culturally diverse populations, including legal immigrants.

Electing option to cover preventive services without cost-sharing

In this policy: State

States should elect to provide recommended screening services, immunizations, and certain medical or remedial services to Medicaid beneficiaries without requiring cost-sharing to promote maximum use of preventive services.