The Need For Medicaid Reform PDF Download

The Patient Protection and Affordable Care Act (PPACA), signed into law on March 23, 2010, made significant changes to the way eligibility for the Medicaid program will be determined and who the program will cover. Under PPACA, eligibility for Medicaid--a joint federal-state program that finances health care for certain categories of low-income individuals--must be expanded to non-elderly individuals with incomes at or below 133 percent of the federal poverty level (FPL) beginning on January 1, 2014. Through this expansion, states will provide Medicaid coverage to eligible low-income parents and childless adults. PPACA also requires the establishment of American Health Benefit Exchanges (referred to as exchanges)--marketplaces where eligible individuals can purchase private health insurance in each state. The Centers for Medicare & Medicaid Services' (CMS) Office of the Actuary has estimated that, as a result of the expansion, the number of Medicaid enrollees will increase by 14.9 million in 2014 and by 25.9 million in 2020. State governments will play a key role in implementing many aspects of this reform, which must be in place by the beginning of 2014. Specifically, states will need to make major changes to the way they conduct Medicaid eligibility determinations for individuals and families. States also will need to develop streamlined eligibility and enrollment systems that allow for the coordination of enrollment across Medicaid, the Children's Health Insurance Program (CHIP), and exchanges. At the same time, states will need to address the financial implications of implementing this Medicaid expansion and accompanying enrollment systems. The federal government will initially provide states with full funding to cover the cost of adults who are newly eligible for Medicaid due to the expansion. Congress asked us to report on the actions states are taking to implement the Medicaid expansion. This report addresses the following questions: 1. What are states' responsibilities for implementing the Medicaid expansion provisions under PPACA? 2. What actions have selected states taken to prepare for the Medicaid expansion provisions of PPACA and what challenges have they encountered? 3. What are states' views on the fiscal implications of the Medicaid expansion on state budget planning?