When Congress enacted the Affordable Care Act, some states had already expanded coverage to adults at higher incomes. The expansion state designation under the statute provides an alternate increased FMAP to states that adopt the new adult group but where some individuals in the new group do not qualify for the newly eligible FMAP because they would have qualified for full benefits, benchmark benefits, or benchmark-equivalent benefits under the state's rules as of December 1, 2009. The expansion state FMAP may be available to qualifying states for expenditures for certain non-pregnant childless adults (those who are enrolled in the new adult group and who the state may require to enroll in benchmark coverage), to the extent that such individuals do not qualify for the newly eligible FMAP.
A qualifying expansion state (described in section 1905(z)(3) of the Act) is a state that, as of March 23, 2010 (the date of enactment of the Affordable Care Act), provided "health benefits coverage" either through Medicaid or a fully state-funded program to parents and nonpregnant childless adults up to at least 100 percent of the Federal Poverty Level (FPL). For purposes of this statutory definition, such health benefits coverage as of March 23, 2010 must have:
- Included inpatient hospital services.
- Not been dependent on access to employer coverage, employer contribution, or employment.
- Not been limited to premium assistance, hospital-only benefits, a high deductible health plan, or a health opportunity account
States seeking to confirm their status as expansion states should provide CMS with an analysis of the scope of coverage provided as of March 23, 2010, citing applicable demonstration special terms and conditions or state-based policies to establish eligibility levels and the coverage provided. As we have explained in a previously released FAQ (PDF, 242.79 KB), if a population covered by a state that qualifies as an expansion state meets the criteria for the newly eligible matching rate, the state will receive the newly eligible matching rate for that population. A state will always receive the more favorable FMAP if two FMAPs might be applicable for a particular population. For example, states that qualify as expansion states may be eligible for the newly eligible FMAP if the expansion offered less than full benefits, benchmark benefits, or benchmark-equivalent benefits, or if the expansion started after December 1, 2009. In such an instance, expenditures for adults in the new adult coverage group will be subject to the newly eligible FMAP. The expansion state FMAP (described in section 1905(z)(2) of the Act) is the regular FMAP rate increased by the number of percentage points equal to a "transition percentage" (which ranges from 50-100 percent) of the gap between the regular Medicaid FMAP and the increased "newly eligible" FMAP. In 2019 and beyond, the expansion state FMAP will be equal to the newly eligible FMAP, which means it will be 93 percent in 2019 and 90 percent in 2020 and thereafter.