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Monday, December 10, 2012

Feds to states: No new deadline on exchange question, no dice on partial Medicaid expansion

Posted By on Mon, Dec 10, 2012 at 5:16 PM

The U.S. Department of Health and Human Services today issued a letter clarifying a number of questions about the health-insurance exchanges and Medicaid expansion. There’s a lot to unpack, but a few highlights:

1) There will be no extension on the Dec. 14 deadline for states to decide whether they want to run their own exchange starting this year. States may apply at any time to run an exchange in future years.

2) There is no deadline for the Medicaid-expansion decision. However, those generous federal matching rates are only available in the coming years:

While states have flexibility to start or stop the expansion, the applicable federal match rates for medical assistance provided to “newly eligible individuals” are tied by law to specific calendar years outlined in the statute: states will receive 100 percent support for the newly eligible adults in 2014, 2015, and 2016; 95 percent in 2017, 94 percent in 2018, 93 percent in 2019; and 90 percent by 2020, remaining at that level thereafter.

3) States that say YES to Medicaid expansion can drop out of the expansion program down the road.

A state may choose whether and when to expand, and, if a state covers the expansion group, it may decide later to drop the coverage.

4) States will NOT get the generous federal matching rates via partial expansion.

No. Congress directed that the enhanced matching rate be used to expand coverage to 133% of FPL. The law does not provide for a phased-in or partial expansion. As such, we will not consider partial expansions for populations eligible for the 100 percent matching rate in 2014 through 2016.

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