Medicaid Expansion Underway, Mandates Begin in 2014


One of the cornerstones of the health care reform law is a massive expansion of the Medicaid program.

Starting in 2014, all states will be required to expand eligibility of their Medicaid programs to all adults at or below 133% of poverty, regardless of whether they have children or are disabled. States can now choose to open up programs to these new enrollees early.

This is the first time in the history of the Medicaid program that states can receive federal funds for providing coverage for adults based solely on income levels.

In April, officials at the Centers for Medicare and Medicaid Services released the first details on how the new eligibility requirements will work. States that choose to begin enrolling these newly eligible adults before 2014 will receive federal matching payments at the regular Federal Medical Assistance Percentage (FMAP) rate.

Starting in 2014, they will receive an increased matching rate for certain people in the new eligibility group, according to CMS. The agency plans to issue separate guidance on this issue later.

The immediate impact on states will probably vary based on whether they are already covering some of the newly eligible adults with their own funds. In those states, the new federal money will mean an immediate savings. States that don't already offer expanded coverage will be spending new money to pick up their share of covering new beneficiaries.

Another question is how the expansion of the Medicaid program will impact access to care. In many states, Medicaid pays physicians at rates well below Medicare levels, and some estimates suggest that, around the country, only about half of primary care physicians even accept new Medicaid patients.

Under the Health Care and Education Reconciliation Act passed as part of health reform, Congress raised Medicaid payments up to Medicare levels for primary care providers starting in 2013 and 2014.

A survey of 944 primary care physicians conducted by UnitedHealth Group found that 67% think that new Medicaid patients will struggle to find a suitable primary care physician if the Medicaid expansion is not accompanied by other reforms, such as payment increases. If payment is increased to at least Medicare levels, about half of physicians (49%) said they would be willing to take on new Medicaid patients.

“Having a Medicaid insurance card is not the same as having a primary care doctor that will treat you,” Simon Stevens, executive vice president of UnitedHealth Group and chairman of the UnitedHealth Center for Health Reform and Modernization, said during a news conference to discuss Medicaid expansion. “Unfortunately, that disconnect between Medicaid benefits and health care access has in some places been growing in recent years.”

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