US states are restarting yearly Medicaid and Children’s Health Insurance Program (CHIP) eligibility reviews. The Kaiser Family Foundation reported on February 22, 2023 ("10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision"): "Primarily due to the continuous enrollment provision, Medicaid enrollment has grown substantially compared to before the pandemic and the uninsured rate has dropped. But, when the continuous enrollment provision ends, millions of people could lose coverage that could reverse recent gains in coverage. As part of the Consolidated Appropriations Act, 2023, signed into law on December 29, 2022, Congress set an end of March 31, 2023 for the…
Medicaid Overview
"Medicaid is a joint federal-state program that finances the delivery of primary and acute medical services, as well as long-term services and supports (LTSS), to a diverse low-income population, including children, pregnant women, adults, individuals with disabilities, and people aged 65 and older."State participation in Medicaid is voluntary, although all states, the District of Columbia, and the territories<sup>1</sup> choose to participate. States must follow broad federal rules to receive federal matching funds, but they have flexibility to design their own versions of Medicaid within the federal statute’s basic framework. This flexibility results in variability across state Medicaid programs.The federal government…
Medicaid Enrollment
"The ACA Medicaid expansion has significantly increased Medicaid enrollment and federal Medicaid expenditures. In FY2017, an estimated 12 million individuals were newly eligible for Medicaid through the ACA Medicaid expansion (i.e., expansion adults), and total Medicaid expenditures for the expansion adults were an estimated $71 billion. Enrollment for the expansion adults is projected to be 13 million in FY2026, and expenditures for the expansion adults are projected to be $120 billion in FY2026 (with the federal government paying $108 billion and states paying $12 billion)."Between FY2014 and FY2015, the average per enrollee costs for expansion adults is projected to have…
Financial Eligibility for Medicaid
"Medicaid is also a means-tested program that is limited to those with financial need. However, the criteria used to determine financial eligibility—income and sometimes resource (i.e., asset) tests—vary by eligibility group."For most eligibility groups the criteria used to determine eligibility are based on modified adjusted gross income (MAGI) income counting rules. There is no resource or asset test used to determine Medicaid financial eligibility for MAGI-eligible individuals.26"While MAGI applies to most Medicaid-eligible populations, certain populations such as older adults and individuals with disabilities are statutorily exempt from MAGI income counting rules. Instead, Medicaid financial eligibility for MAGI-exempted populations is based…
Categorical Eligibility for Medicaid
"Medicaid categorical eligibility criteria are the characteristics that define the population qualifying for Medicaid coverage under a particular eligibility pathway; in other words, the nonfinancial requirements that an individual must meet to be considered eligible under an eligibility group. Medicaid covers several broad coverage groups, including children, pregnant women, adults, individuals with disabilities, and individuals 65 years of age and older (i.e., aged). There are a number of distinct Medicaid eligibility pathways within each of these broad coverage groups."Historically, Medicaid eligibility was limited to poor families with dependent children who received cash assistance under the former Aid to Families with…
Medicaid Expenditures
"The cost of Medicaid, like most health expenditures, historically increased at a rate significantly faster than the overall rate of U.S. economic growth, as measured by gross domestic product. In the past, much of Medicaid’s expenditure growth has been due to federal or state expansions of Medicaid eligibility criteria, such as the ACA Medicaid expansion."Medicaid expenditures are influenced by economic, demographic, and programmatic factors. Economic factors include health care prices, unemployment rates (see the “Medicaid Enrollment” section for a discussion of the impact of the unemployment rate on Medicaid enrollment, which also impacts expenditures), and individuals’ wages. Demographic factors include…
Medicaid Financing
"The federal government and the states jointly finance Medicaid.47 The federal government reimburses states for a portion (i.e., the federal share) of each state’s Medicaid program costs. Because federal Medicaid funding is an open-ended entitlement to states, there is no upper limit or cap on the amount of federal Medicaid funds a state may receive. In FY2018, Medicaid expenditures totaled $616 billion. The federal share totaled $386 billion and the state share was $230 billion.48" Source: U.S. Congressional Research Service. Medicaid: An Overview (R43357; June 24, 2019). https://crsreports.congress.gov/product/pdf/R/R43357
State Share of Medicaid Financing
"The federal government provides broad guidelines to states regarding allowable funding sources for the state share (also referred to as the nonfederal share) of Medicaid expenditures. However, to a large extent, states are free to determine how to fund their share of Medicaid expenditures. As a result, there is significant variation from state to state in funding sources."States can use state general funds (i.e., personal income, sales, and corporate income taxes) and other state funds (e.g., provider taxes,53 local government funds, tobacco settlement funds, etc.) to finance the state share of Medicaid. Federal statute allows as much as 60% of…
Federal Share of Medicaid Financing
"The federal government’s share of most Medicaid expenditures is established by the federal medical assistance percentage (FMAP) rate, which generally is determined annually and varies by state according to each state’s per capita income relative to the U.S. per capita income.49 The formula provides higher FMAP rates, or federal reimbursement rates, to states with lower per capita incomes, and it provides lower FMAP rates to states with higher per capita incomes."FMAP rates have a statutory minimum of 50% and a statutory maximum of 83%.50 For a state with an FMAP of 60%, the state gets 60 cents back from the…
Medicaid Expansion Under the ACA
"Since January 1, 2014, states have had the option to extend Medicaid coverage to most non-elderly, nonpregnant adults with income up to 133% of FPL. Twenty-four states and the District of Columbia implemented the ACA Medicaid expansion at that time. Since then, the following seven states have implemented the expansion: Michigan (April 1, 2014), New Hampshire (July 1, 2014), Pennsylvania (January 1, 2015), Indiana (February 1, 2015), Alaska (September 1, 2015), Montana (January 1, 2016), and Louisiana (July 1, 2016). (See Figure 1.)"Virginia is expected to begin coverage of the ACA Medicaid expansion on January 1, 2019. Maine adopted the…
