Getting into Gear for 2014: Shifting New Medicaid Eligibility and Enrollment Policies into Drive
Medicaid and CHIP Eligibility as of January 1, 2014
A number of income sources, such as child support and Social Security benefits, which are currently counted for Medicaid eligibility, are excluded from taxable income and MAGI-based determinations. States also take a different approach to determining the size of family, often based on who is applying for benefits. But under the new MAGI rules, household size will be based on the tax-filing unit, with all individuals claimed as dependents included when determining that taxpayer’s family size.
Despite the attempt at coordination, there will be cases in which the definitions of household and income will not align across the various coverage programs. For example, Medicaid/CHIP eligibility will still be based on monthly income, whereas eligibility for premium credits in the Marketplace will be based on annual income. Additionally, certain types of income, such as educational grants, are not included when determining eligibility in Medicaid, but are when determining eligibility for Marketplace coverage. The household composition, such as for married couples, may also be counted differently in Medicaid. However, there is a safe harbor provision for individuals and families who are determined ineligible for Medicaid by the Medicaid agency, but are found to have income below 100 percent of the FPL based on the methods used by the Marketplace. In such cases, Medicaid eligibility will be determined using the tax definition (i.e., what was used by the Marketplace), allowing the applicant(s) to secure coverage in Medicaid and avoid a gap in coverage.
Note that not all states apply earnings disregards or other deductions and may simply use a gross income standard.
CMS provided states with the option of using the HHS-standardized method or a state-proposed alternative for calculating the MAGI-equivalent standards. Most states used a standard model that simulated the average value of disregards and deductions for families with net income within 25 percentage points of a state’s upper eligibility limit. This value is expressed as a percentage of the FPL and added to the state’s existing eligibility level to create the new MAGI-equivalent standard. Alternatively, states could take this same approach using their own administrative data on the use of disregards and deductions. States could also work with HHS to develop their own methodology to more adequately fit unique circumstances, for example, to account for unusual disregards. Of the 46 MAGI conversion plans available, just three (3) states (AK, NE, and NV) chose this alternative approach. C. Mann, Director of Centers for Medicaid and CHIP Services letter to State Health Officials and State Medicaid Directors, SHO #12-003 (December 28, 2012).
In an attempt to simplify eligibility categories, the ACA collapses many of the existing ones into three broad groups: parents, pregnant women, and children under age 19. States will set income eligibility standards for parents, pregnant women, and children subject to federally specified minimums and maximums. The minimum eligibility level for parents is tied to states’ historical eligibility levels for Aid to Families with Dependent Children, while the minimum level for pregnant women and children generally is 133 percent of the FPL, although may be higher in some states for pregnant women.
In order to equalize their eligibility thresholds, states would need to use a “less restrictive methodology” for determining income, effectively disregarding the income between the two converted thresholds for the older children. This option, under section 1902(r)(2), is no longer available with the switch to the new MAGI methodology on January 1, 2014.
While the new mandatory minimum eligibility threshold is 133 percent of the FPL, the standard five percentage point of the FPL disregard is included to represent the highest threshold at which an older child may be eligible for Medicaid.
Louisiana Department of Health and Hospitals. “Changes to Medicaid Eligibility Criteria Effective January 1.” Friday, August 16, 2013 available at: http://www.dhh.louisiana.gov/index.cfm/newsroom/detail/2854
Connecting People to Coverage through Streamlined Enrollment Processes
Colorado and Maine are using a two-step process, where those who may be eligible for premium tax credits are directed to additional questions that will need to be answered to determine eligibility for premium tax credits in the marketplace. These states are considered by CMS to have a single, streamlined application.
If a Marketplace is operated by a non-governmental agency, the authority to conduct final Medicaid determinations is limited to MAGI-based determinations. In some cases in which the Marketplace is operated by a governmental agency, the Marketplace may be able to make non-MAGI determinations or enter into contracts with government agencies to do so.
Verification Plan Template - Guidance and Instructions; Phase I – MAGI-based Eligibility.
CMS eligibility audits through the Payment Rate Error Measurement (PERM) review and Medicaid Eligibility Quality Control (MEQC) evaluate whether eligibility determinations are made in accordance with state policy. Verification plans and other documents describing state policies and procedures are the basis for conducting the audits.
These states are counted under the "Self-Attestation Accepted at Application without Additional Verification" column, as this is the process they will use for the majority of their population.
Section 1137 of the Social Security Act requires states to have in effect an income and eligibility verification system. 42 CFR 435.948(a)(1) requires states to verify information (to the extent the agency determines such information is useful), related to wages, net earnings from self-employment, unearned income and resources from the State Wage Information Collection Agency (SWICA), the Internal Revenue Service (IRS), the Social Security Administration (SSA), the agencies administering the State unemployment compensation laws, the State administered supplementary payment programs under section 1616(a) of the Act, and any State program administered under a plan approved under Titles I, X, XIV, or XVI of the Act.
New Options to Facilitate Enrollment and Renewal
C. Mann, Director of Centers for Medicaid and CHIP Services letter to State Health Officials and State Medicaid Directors, SHO #13-003 (May 17, 2013).
Note that Pennsylvania is adopting the early MAGI option in its Medicaid program only.
M. Heberlein, et al., “Medicaid Coverage for Parents under the Affordable Care Act,” Georgetown University Center for Children and Families (June 2012).
The option was in Arkansas’ waiver application, but because the state could not secure the 100 percent federal match for these adults for their full-year of coverage, the state chose not to go forward. The newly eligible matching rates is only applicable for individuals who meet the statutory eligibility requirements, and as such is not available to those individuals who remain enrolled but whose income or other eligibility criteria changes over the year in ways that would make them no longer eligible under the category. New York had pre-existing waiver approval to extend 12-month continuous eligibility to parents and New Mexico included the policy for all adults in its recently approved waiver, but neither state has yet implemented it.
J. Guyer, et al., “Fast Track to Coverage: Facilitating Enrollment of Eligible People into the Medicaid Expansion,” Kaiser Commission on Medicaid and the Uninsured (November 2013).