Download the report here:
Summary of FMAP for the Newly Insured.pdf
Summary of Final Federal Rules on FMAP (Federal Medical Assistance Percentage) to the States for the Newly Insured Medi-Cal Eligibles.
42 CFR 433, CMS 2327 FC, RIN 0938-AR 38
Under the ACA (Affordable Care Act), states receive 100% FFP (federal financial participation) for the new Medicaid eligibility categories for the first three years (2014, 2015 and 2016), then slowly phasing down, 95% in 2017, 94% in 2018, 93% in 2019, to 90% FFP in 2020 and thereafter. The new regulations implement this and give states guidance on how to document who are the new and who are the existing eligibles.
This is reasonably straightforward for new eligibility categories, such as the MIAs (medically indigent adults), but it also applies to other existing groups of Medicaid elgibles, such as: medically needy share of cost (Medicaid spend down), disability applicants, individuals newly eligible due to the elimination of the assets test, pregnant women, parents with incomes between the state’s 12/09 eligibility standards (e.g. for California 100% of FPL) and 133% of FPL, and 18-21 year old adults between 100 and 133% of FPL. For these latter groups, states will be eligible for 100% match for new eligibles between the 12/1/09 Medicaid (Medi-Cal) threshold eligibility and the ACA’s MAGI (Modified Adjust Gross Income) eligibility. The new regulations are summarized below.
- 42 CFR 433.10 (6) establishes the new matching rates at 100% for 2014-16, phasing down to 90% in 2020 and thereafter for newly eligible individuals.
- 42 CFR 433.10 (7 and 8) set the matching for expansion states (like Massachusetts, Vermont and New York that covered expansion eligibles pior to passage of the ACA); California is not one of those.
- 42 CFR 433.204 defines newly eligible individuals as an adult between the ages of 18 and 64 who is eligible under 42 CFR 435.119 and would not have been eligible for full scope benefits under the state’s plan (threshold methodology) in effect on December 1, 2009.
- 42 CFR 433.206 defines the threshold methodology.
- A state’s Medicaid income eligibility limits and the average value of all state income disregards are combined to calculate the state’s income threshold. CMS will make a calculation and submit it to each state, which may either use the federal calculation or develop and submit its own calculation to CMS for approval.
- When a parent, guardian or other caretaker relative applies, the state determines whether their income is above the threshold and below the federal MAGI limit (138% of FPL), if so the state receives 100% FFP. If their income is below the threshold, the state receives its regular FMAP (50% in California).
- An individual, who under the old rules was otherwise eligible for Medi-Cal, but only for partial benefits (e.g. pregnancy only or Medi-Cal share of cost, also known as Medicaid spend down, but not emergency only benefits) would be eligible for 100% FFP for the new full scope benefits under the new rules.
- Individuals who are MAGI (Modified Adjust Gross Income) eligible, but are also applying for disability coverage, will be eligible for 100% FFP during the period after their application until their disability is determined.
- States also receive 100% FFP for persons with excess resources (e.g. bank account, car or property) who would have been ineligible under the state’s 12/1/09 Medicaid plan, but are eligible under the ACA due to the elimination of the assets test. For example a family with $6,000 in savings for their child’s college education would have been ineligible for Medi-Cal for the parents, but their children would be eligible for Healthy Families or Medi-Cal; effective 1/1/14, the parents will be eligible for Medi-Cal or the Exchange. There are no requirements that the families’ eligibility is assessed under the new rules, then the old rules. The numbers of newly eligble families are determined by statistically valid sampling conducted post eligibility determination. This can be done based on a state data sample prior to 1/1/14 or a data sample post 1/1/14.
- The state can also secure 100% FFP for spend down eligibles if an individual’s income was greater than the state’s medically needy income level (spend down) level but eligible for full scope Medicaid coverage. For example, families with spend down (share of cost) incomes between 67% and 138% of FPL will be new Medicaid (Medi-Cal) eligibles under the ACA and the state will receive 100% FFP. On the other hand, a family with income at 150% of FPL who have spend down (share of cost) Medicaid eligibility will be Exchange eligible. If they choose to stay on Medicaid spend down, the state will only receive a 50/50 match.
Summary: Assuming I understand these regulations correctly, it works as follows.
- For the MIAs (18-64), the state receives 100% FFP.
- For those applying for disability, the state receives 100% FFP for all care until an individual is determined eligible for disability coverage.
- For those parents, guardians and other caretaker adults with incomes above the 12/1/09 eligibility threshold and under 138% of FPL, the state receives 100% FFP.
- For those who would be ineligible due to resources but would now be eligible due to the MAGI no assets test, the state receives 100% FFP.
- For current spend down (share of cost) eligibles with incomes up to 138% of FPL, the state receives 100% FFP.
This assumes that California adopts the Medicaid expansion option as it has strong incentives to do.
Under the federal rules and guidance, there will be no need for states to conduct dual eligibility tests, one under the 12/1/09 standards and another under the new 1/1/14 standards. The financial impact of the asset test will be assessed by a statistically random sample. The financial impact of the new MAGI income eligibility test is that income is assessed individually. To make this concrete, let’s assume the state’s income level is 100% of FPL and let’s assume the average disregards for persons with incomes from 75% to 100% of FPL is 5%, California would receive 100% FFP for parents and other caretaker adults with incomes from 105% (the Medicaid “threshold”) to138% of FPL (the ACA limit). The complexities of the old 12/1/09 standards and income disregards are eliminated by simply averaging the income disregards for people whose incomes fall within 25% below the state’s old income level.