As a result of the Affordable Care Act (ACA), states can choose to expand their Medicaid eligibility by increasing their income criteria to 133% of the national Federal Poverty Level (FPL) for individuals between the ages of 19 and 64. In conjunction to the increase of enrollment eligibility, the federal government will match 100% for the first three years for the newly enrolled. By expanding Medicaid, more individuals have access to adequate health care.
Federal Minimum for Medicaid Eligibility Pre-Affordable Health Care Act:
Who was Eligible?
- Poor children, pregnant women, parents, severely disabled, blind, and elderly
What was the Income Eligibility?
The minimum federal level to cover these individuals:
- Children and pregnant women up to 133% FPL
- Parents varies from 25%-200% FPL by state
- Severely disabled, blind, or low-income elderly are covered through Social Security
- Non-disabled adults without dependent children were generally excluded from Medicaid unless the state obtained a waiver for them
How Much Did the Federal Government Contribute?
- The federal government matching rate for Medicaid ranges from 50-83% for each state
The Establishment of Medicaid Expansion-Post ACA
The variety of eligibility requirements in each state explains the large difference of the large number of the uninsured. The purpose of expanding Medicaid is to reduce the number of the uninsured and the disparities in health coverage across states.
Who Qualifies and What is the Income Eligibility?
- Expanding Medicaid by changing enrollment requirements to the national floor of 138% FPL (threshold is 133%, but 5% of income is disregard) for ALL individuals –children, pregnant women, parents, and childless adults—is a state voluntary option.
- The 133% FPL means an average $15, 800 for individual or $26,813 for family of three
- For the first time, childless, non-disabled adults under 65 years of age with income below 133% of the FPL, can receive Medicaid without requesting for a waiver
How Much Does the Federal Government Contribute?
- The federal government will pay 100% for Medicaid for the first 3 years for newly admitted beneficiaries.
- After 2017, the federal match will go down to 98% and then down to a permanent 90% after 2020.
- States would then be responsible to finance the remaining 10% for newly admitted enrollees in subsequent years after 2020.
What Happens if States Do Not Expand?
- States that refuse to comply with then Medicaid expansion would not lose supplementary federal funding, which was originally declared in the ACA before the Supreme Court established that clause as unconstitutional.
- Individuals with incomes from 133%-400% FPL can still attain health insurance through the health exchanges at discounted cost sharing and premiums
The Importance of the Medicaid Expansion
Since Medicaid expansion is voluntary, a state that chooses to expand Medicaid can opt-out at any given time. According to the Congressional Budget Office, 17 million individuals are expected to gain Medicaid/CHIP coverage due to the Medicaid Expansion, but an estimate 6 million people who are eligible for the expansion will not be covered because of resistance from state governments to participate in the expansion.