Frequently Asked Questions

Under the Affordable Care Act, an Expansion State is one that had eligibility standards for parents and nonpregnant childless adults (under either the State plan or a demonstration project) to at least 100 percent of the FPL as of the date of enactment of the Affordable Care Act. Specifically, a State is an expansion State if, on March 23, 2010, the State offered health benefits coverage Statewide to parents and non-pregnant, childless adults whose income is at least 100 percent of the poverty line, that includes inpatient hospital services, is not dependent on access to employer coverage, employer contribution, or employment and is not limited to premium assistance, hospital-only benefits, a high deductible health plan, or alternative benefits under a demonstration program authorized under section 1938 of the act. A State that offers health benefits coverage to only parents or only non-pregnant childless adults described in preceding sentence will not be considered to be an expansion State; both groups must have been covered as described above.

The law established a special Federal medical assistance percentage (FMAP) for expansion States. Expansion States are able to claim a special FMAP for the non-pregnant childless adults who are not "newly eligible." These States can also claim the enhanced FMAP for individuals who are "newly eligible" in 2014. CMS is in the process of a 50-State review of State coverage as of March 23, 2010.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 42.98 KB)

FAQ ID:93191

Yes, in order to be eligible for enhanced FMAP for "newly eligible" individuals, an individual must be in the new adult group. The adult group is comprised of individuals that could include parents. Specifically, the group is comprised of individuals described in section 1902(a)(10)(A)(i)(VIII) of the Act who beginning January 1, 2014:

• Are under age 65
• Are not pregnant
• Not entitled to/enrolled for benefits under Medicare (Part A and B)
• Not described in the "(I) to (VII) Groups" (referring to individuals described in section 1902(a)(10)(I) - (VII) of the Act)
• Whose income is determined using MAGI and does not exceed 133% of the FPL

This list does not preclude parents from being in the adult group, but whether the State can claim enhanced FMAP depends on whether the parents are considered "newly eligible" ; that is, an individual who is not under 19 years of age (or higher age as the State may have elected) and who is not eligible under the State plan or under a waiver of the plan for full benefits or for benchmark coverage or benchmark equivalent coverage under State rules in effect as of December 2009, or is eligible but would not have been enrolled for such benefits or coverage through a waiver under the plan that has a capped or limited enrollment.

Thus, for any parents who are in the adult group because, for example, their income is greater than the income standard for parents in the State's parent/caretaker relative group in January 2014, the State will be able to claim enhanced FMAP if they would not have been eligible under the eligibility criteria in effect under the plan or waiver as of December 1, 2009.

Our proposed rules on this definition were issued in August 2011 (available at http://www.gpo.gov/fdsys/pkg/FR-2011-08-17/html/2011-20756.htm ); final rules are forthcoming. As discussed in the proposed rule, CMS intends to establish a methodology for States to claim enhanced FMAP without having to maintain and apply its December 1, 2009 eligibility rules to each individual.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 42.98 KB)

FAQ ID:93201

Yes. The expansion state Federal Medical Assistance Percentage, or matching rate, described in section 1905(z)(2) of the Social Security Act is available to some states that expanded Medicaid coverage prior to enactment of the Affordable Care Act, but does not exclude those states from receiving the increased newly eligible match for expenditures for beneficiaries who meet the statutory qualifications. 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. States will receive the highest matching rate possible for a given population; being an expansion state will never disadvantage the state in terms of matching rates for that population.

The following are several examples of circumstances in which an expansion state will receive the newly eligible matching rate for some beneficiaries:

• States are considered expansion states if, as of March 23, 2010, they provided coverage that meets the standards specified in section 1905(z)(3) of the Act to both childless adults and parents up to at least 100 percent of the federal poverty level. If a state provided Medicaid coverage up to 100 percent of the federal poverty level but not above, expenditures for individuals between 100 and 133 percent of the federal poverty level would qualify for the newly eligible matching rate.
• States that qualify as expansion states may have offered less than full benefits, benchmark benefits, or benchmark-equivalent benefits. Individuals who received limited benefits under a Medicaid expansion will qualify as "newly eligible" individuals and the newly eligible matching rate will apply.
• States that qualify as expansion states based on the provision of state-funded coverage will receive the newly eligible matching rate for people previously covered by the state-only program, since they will be newly eligible for Medicaid coverage.

The expansion state matching rate is only available for expenditures for non-pregnant, childless adult populations described in the new low-income adult group. CMS will work with states to ensure that the correct matching rate is applied to expenditures for populations in expansion states that qualify as newly eligible.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 359.41 KB)

FAQ ID:94601

Beginning in 2014, the Affordable Care Act authorizes two types of increased federal medical assistance percentages (FMAPs) for state expenditures for low-income individuals in the new adult group (that is, the group described in section 1902(a)(10)(A)(i)(VIII) of the Social Security Act (the Act)) - the newly eligible FMAP and the expansion state FMAP. Under the statute, these two increased federal matching rates are only available to states that adopt the new adult group.

The newly eligible FMAP is available for medical assistance expenditures on behalf of "newly eligible" individuals, who are defined (in section 1905(y)(2) of the Act) as individuals between the ages of 19 and 64 who are enrolled in the new adult group and who would not have been eligible for full benefits, benchmark coverage (described in subparagraph (A), (B), or (C) of section 1937(b)(1) of the Act), or benchmark-equivalent coverage (described in section 1937(b)(2) of the Act) as of December 1, 2009. An individual may also be "newly eligible" if he or she would have been eligible but could not have been enrolled for such benefits or coverage because the applicable Medicaid waiver or demonstration had limited or capped enrollment as of December 1, 2009.

The newly eligible FMAP (described in section 1905(y)(1) of the Act) is 100 percent in calendar years 2014-2016, 95 percent in calendar year 2017, 94 percent in calendar year 2018, 93 percent in calendar year 2019, and 90 percent in calendar years 2020 and beyond. The expansion state FMAP (described in section 1905(z)(2) of the Act) is an alternate increased FMAP available to match the expenditures for certain adults in states that previously expanded Medicaid and, as a result, may not qualify for the newly eligible FMAP. More details about the expansion state FMAP are included in Question 5. In our August 17, 2011 eligibility NPRM, we proposed that methods for assigning the appropriate FMAP would not require that states undertake the process of using their old eligibility rules to determine if someone would have been eligible under December 2009 rules. We have been consulting with states to test different methodologies for accuracy and simplicity.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 52.92 KB)

FAQ ID:94071

As described above, the newly eligible FMAP applies to adults in the new low-income adult eligibility group who would not have been eligible for full benefits, benchmark benefits, or benchmark-equivalent benefits under the state's rules as of December 1, 2009. At the time of approval of the section 1115 demonstrations in effect as of that date, neither CMS nor states explicitly designated the coverage offered under demonstrations as "benchmark" or "benchmark-equivalent" coverage, even though the coverage offered to demonstration beneficiaries may have met such standards. Therefore, CMS is requesting that states that used section 1115 demonstrations to expand coverage to low-income adults as of December 1, 2009 provide CMS with an analysis of the benefit package that was offered so that CMS can determine whether the benefits provided could have met a benchmark or benchmark equivalent standard, as in effect in December 2009. A separate analysis should be undertaken for each demonstration benefit package, if different demonstration populations received different benefits under the demonstration.

In conducting the benefit analysis, it will be important for states to utilize a consistent methodology and provide CMS with sufficient data to substantiate their analyses. States' benchmark-equivalence analyses must be certified by a qualified actuary and must include information on the data, assumptions, and methodology used to calculate actuarial values, in accordance with regulations implementing section 1937 of the Act, which are already in effect at 42 C.F.R. 440.330-340. CMS is working with all affected states (that is, states with demonstrations covering adults in effect on December 1, 2009) and will provide them with guidance about the form and manner in which to provide information about eligibility and benefits in effect as of December 1, 2009. CMS will use the benefit analysis that states provide to determine the appropriate FMAP. If any state has questions about this process, they should contact their State Operations and Technical Assistance (SOTA) team representative.

It is also important to note that if the benefit analysis described above indicates that the newly eligible FMAP is not available for a particular population, states may nevertheless be able to claim the expansion state FMAP for certain non-pregnant adults enrolled in the new adult group (as described in Question 5). CMS will work with each state that expanded coverage to adults prior to the enactment of the Affordable Care Act to address questions and to ensure that the correct FMAP is applied to expenditures for each population.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 52.92 KB)

FAQ ID:94076

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, 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.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 52.92 KB)

FAQ ID:94081

No. As stated in the past, the Affordable Care Act does not provide for a phased-in or partial expansion. States that wish to take advantage of the enhanced federal matching funds for newly eligible individuals must extend eligibility to 133% of the federal poverty level (FPL) by adopting the new adult group. Arkansas has initiated discussions about "premium assistance" options for Medicaid beneficiaries; partial expansion is not part of these discussions.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 40.01 KB)

FAQ ID:93836

The Medicaid statute provides several options for states to pay premiums for adults and children to purchase coverage through private group health plans, and in some case individual plans; in most cases, the statute conditions such arrangements on a determination that they are "cost effective." Cost effective generally means that Medicaid's premium payment to private plans plus the cost of additional services and cost sharing assistance that would be required would be comparable to what it would otherwise pay for the same services. Similar provisions also apply in the Children's Health Insurance Program (CHIP).

Under all these arrangements, beneficiaries remain Medicaid beneficiaries and continue to be entitled to all benefits and cost-sharing protections. States must have mechanisms in place to "wrap-around" private coverage to the extent that benefits are less and cost sharing requirements are greater than those in Medicaid. In addition under the statutory options in the individual market beneficiaries must be able to choose an alternative to private insurance to receive Medicaid benefits.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 40.01 KB)

FAQ ID:93841

Some states have expressed interest in section 1115 demonstrations to provide premium assistance for the purchase of QHPs in the Exchange. Under section 1115 of the Social Security Act, the Secretary may approve demonstration projects that she determines promote the objectives of the Medicaid program. HHS will consider approving a limited number of premium assistance demonstrations since their results would inform policy for the State Innovation Waivers that start in 2017. As with all such demonstrations, HHS will evaluate each proposal that is submitted and consider it on a case by case basis relative to this standard.

With regard to premium assistance demonstrations, HHS will consider states' ideas on cost effectiveness that include new factors introduced by the creation of Health Insurance Marketplaces and the expansion of Medicaid. For example, states may quantify savings from reduced churning (people moving between Medicaid and Exchanges as a result of fluctuating incomes) and increased competition in Marketplaces given the additional enrollees due to premium assistance. As with all demonstration proposals, the actuarial, economic, and budget justification (including budget neutrality) would need to be reviewed and, if approved, the program and budgetary impact would need to be carefully monitored and evaluated.

To ensure that the demonstrations further the objectives of the program and provide information in a timely way, HHS will only consider proposals that:

• Provide beneficiaries with a choice of at least two qualified health plans (QHPs).
• Make arrangements with the QHPs to provide any necessary wrap around benefits and cost sharing along with appropriate data; this would be done within the context of premium assistance, for example through a supplemental premium. This ensures that coverage is seamless, that cost sharing reductions are effectively delivered and that there is accountability for the payments made.
• Are limited to individuals whose benefits are closely aligned with the benefits available on the Marketplace, that is, individuals in the new Medicaid adult group who must enroll in benchmark coverage and are not described in SSA 1937(a)(2)(B)(an example of a population that is described in SSA 1937(a)(2)(B) is the medically frail). Marketplace plans were not designed to offer broader benefits and could experience unexpected adverse selection due to enrollment of groups that are described in SSA 1937(a)(2)(B).
• End no later than December 31, 2016. Starting in 2017, State Innovation Waiver authority begins which could allow a range of State-designed initiatives.

In addition, a state may increase the opportunity for a successful demonstration by choosing to target within the new adult group individuals with income between 100 and 133 percent of FPL. Medicaid allows for additional cost-sharing flexibility for populations with incomes above 100 percent of FPL; this population is more likely to be subject to churning and would be eligible for advance premium tax credits and Marketplace coverage if a state did not expand Medicaid to 133 percent of FPL.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 40.01 KB)

FAQ ID:93846

No. As stated in the past, the Affordable Care Act does not provide for a phased-in or partial expansion. States that wish to take advantage of the enhanced federal matching funds for newly eligible individuals must extend eligibility to 133% of the federal poverty level (FPL) by adopting the new adult group. Arkansas has initiated discussions about "premium assistance" options for Medicaid beneficiaries; partial expansion is not part of these discussions.

Supplemental Links:

• This FAQ was released as part of a larger set. View the full set. (PDF, 40.01 KB)

FAQ ID:93851