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2002 - Income Eligibility for Nonelderly Determined using Modified Adjusted Gross Income

 
Implementation Status 
Statutory Text 

Summary

Beginning January 1, 2014, stipulates that states must use modified adjusted gross income (MAGI) to determine Medicaid (and CHIP as revised by section 2101(d) of the Senate Manager’s Amendment) eligibility for most enrollees, including pregnant women, children, parents and other caretaker relatives, and the new adult group.  The MAGI-based income methodologies do not apply to eligibility determinations for certain exempted groups, including elderly and disabled populations.  Furthermore provides for the alignment of the MAGI methodology with that used to determine eligibility for subsidies under the Exchange.  Such methodology prohibits the use of income or expense disregards, as well as disallows asset or resource tests, for purposes of determining eligibility under a state plan or waiver program.  As revised by section 1004(e)(2) of the HCERA, provides for a 5% income disregard, effectively raising the Medicaid eligibility threshold to 138% of the FPL.

Implementation Status

 
Summary 
Statutory Text 

Prior to January 2013, CMS convened a number of ACA eligibility-related webinars in preparation for states’ upcoming transition to the MAGI-based income eligibility methodology, particularly as it pertained to the Medicaid Eligibility final rule released by CMS on March 16, 2012.  CMS also issued subsequent guidance in December 2012 to states on the MAGI conversion process and methodologies, as well as the timeframe for executing such conversion.

On January 14, 2013, CMS issued a proposed rule regarding, in part, Medicaid eligibility rules, appeals processes, EHBs and eligibility categories. CMS also posted an informational bulletin regarding the rule. The comment deadline was February 13, 2013.

In February 2013, CMS issued FAQ documents (see here and here) FAQ document addressing the transition to new MAGI-based methodologies, among other topics.

On February 20, 2013, CMS issued an informational bulletin to inform states of the verification plans required for both Medicaid and CHIP eligibility, the MAGI-based Eligibility Verification Plan Template, and a review of the final verification regulations.  As stated in the informational bulletin, CMS requested that states submit their MAGI-based eligibility verification plans by March 20, 2013.

On May 17, CMS issued a State Health Official letter titled “Facilitating Medicaid and CHIP Enrollment and Renewal in 2014.”  The letter offers optional strategies that states can employ to reduce the number of uninsured individuals, as well as optional tools to help states manage the transition to their new eligibility and enrollment systems and coverage of new Medicaid enrollees for 2014.  The letter describes five specific targeted enrollment strategies and provides guidance for states interested in adopting them, including implementing early adoption of the Modified Adjusted Gross Income (MAGI)-based rules.

On June 21, CMS unveiled a new Medicaid and CHIP Repository for 2014 State Plan Amendment (SPAs) filings. Among other things, states are filing SPAs to implement new MAGI-based eligibility levels, elect a streamlined application format and indicate alternative benefit plan (ABP) designs for adults. Additional instructions and background information are available at the new repository landing page here.

On August 9, 2013, CMS released FAQs related to these provisions of the law, with particular focus on telephonic applications; Medicaid and CHIP Eligibility Policy; and 75/25 Federal Matching Rate.  On August 15, CMS issued a letter to states (also see an accompanying bulletin), acknowledging the ACA-driven modifications in Medicaid and CHIP eligibility processes beginning in 2014 that will necessitate new approaches to measuring eligibility accuracy.  As such, CMS indicated it is implementing in place of the Payment Error Rate Measurement (PERM) and the Medicaid Eligibility Quality Control (MEQC) programs an “annual 50-state pilot program strategy with rapid feedback for improvement” beginning on January 1, 2014, for FYs 2014-16.

On September 27, CMS issued a SHO/SMD letter on the implications of the June 26, 2013 Supreme Court Defense of Marriage Act (DOMA) ruling to Medicaid and CHIP.  CMS notes that “…with respect to Medicaid and CHIP, a state is permitted and encouraged, but not required, to recognize same-sex couples who are legally married under the laws of the jurisdiction in which the marriage was celebrated as spouses for purposes of Medicaid and CHIP.”  The guidance also states that, consistent with the recent IRS ruling, CMS intends to “treat lawfully married couples as spouses for purposes of the MAGI calculation.”  Please refer to the related guidance  issued by CCIIO as noted in sections 1401 and 1412.

Note that October 2013 Medicaid and CHIP monthly application and eligibility data (as of December 3, 2013) are available here. The November 2013 Medicaid and CHIP monthly application and eligibility data (as of December 20, 2013) are available here. The December 2013 Medicaid and CHIP monthly application and eligibility data (as of January 22, 2014) are available here. In guidance released on November 29, 2013 regarding new flexibility extended to states to use account transfer flat files transmitted by the Federally Facilitated Marketplace (FFM) to enroll individuals in Medicaid and CHIP, addresses the interactions of this new flexibility with the mandatory transition to MAGI.

In December 2013, CMS posted information to Medicaid.gov here under “Medicaid Moving Forward 2014,” which includes, among other things, MAGI-based Medicaid and CHIP eligibility levels by state (see here).

On December 27, 2013, CMS issued a set of FAQs addressing questions regarding ACA funding for the new adult group, coverage of former foster care children, and CHIP financing questions.

In a February 21, 2014 SMD letter, CMS provided further guidance to states regarding the application of certain current Medicaid authorities, including estate recovery rules, on individuals who become eligible for Medicaid pursuant to the ACA and the transition to the Modified Adjusted Gross Income (MAGI) eligibility requirements for long-term services and supports (LTSS). In particular, the guidance addresses the application of liens; adjustments and recoveries; transfers of assets regulations; and post-eligibility income rules to MAGI individuals.

On February 28, 2014, CMS announced that between Oct. 1, 2013, and Jan. 31, 2014, state agencies determined 8,933,378 individuals to be eligible for Medicaid and CHIP. Of those eligibility determinations, 2,436,879 were in January 2014 (about 1.5 million in states expanding Medicaid and 0.9 million in states not expanding). This includes those newly eligible under ACA-authorized expansion, as well as existing eligibles and, in some states, renewals. The agency also indicates that “the determination number does not represent unique individuals, as an individual may have more than one eligibility determination,” among other caveats. State-by-state application and eligibility data for January begins on p. 5 of the report. Updated versions of previously issued reports are available here, under the “eligibility data” tab.

In guidance issued on March 31, CCIIO said that those applying for coverage during Marketplace open enrollment who are determined eligible for Medicaid or CHIP will not face individual mandate penalties for the months in 2014 leading up to their coverage effective dates. The agency indicates that those found to be eligible for Medicaid would qualify for the short coverage gap exemption from the mandate because Medicaid coverage would be effective on the application date, if not before. CCIIO adds that for CHIP, it is “exercising its authority to extend the hardship exemption” applicable to Marketplace enrollees (see Oct. 28, 2013, guidance), given that CHIP coverage effective dates do not necessarily coincide with application dates. Specifically, CCIIO elaborates, the “IRS and Treasury Department intend to publish guidance allowing an individual to claim a hardship exemption from the individual shared responsibility payment for the months in 2014 prior to the effective date of the individual’s CHIP coverage if the individual submits a coverage application prior to the close of the open enrollment period and is found eligible for CHIP.” On April 4, for the first time in its monthly Medicaid and CHIP reports, CMS included an estimate (report; blog post) of approximately 3 million having gained Medicaid or CHIP coverage through February 2014, compared with levels before Health Insurance Marketplaces were implemented on Oct. 1, 2013. The results reflect the change in state-reported Medicaid and CHIP enrollment between July-September 2013 – a baseline period prior to Marketplaces’ open enrollment – and February 2014 in 46 states and D.C. CMS said the increase reflects both newly eligible beneficiaries in states expanding Medicaid, as well as those who previously were eligible, including in states not expanding Medicaid. The aggregate Medicaid and CHIP enrollment figures were reiterated as part of a broader ACA enrollment announcement on April 17. In late April, CMS posted the 2013 Actuarial Report on the Financial Outlook of Medicaid, available here.

On May 30, CMS issued a letter to State Health Officials (SHOs) clarifying that its guidance from last September (see here) on states’ ability to assess same-sex couples’ marriage status also applies to the non-MAGI group. In this latest guidance to SHOs, CMS elaborates on the implications of the June 26, 2013 U.S. v. Windsor Supreme Court decision that overturned section 3 of the Defense of Marriage Act (DOMA), which effectively precluded federal recognition of same-sex marriages. Specifically, CMS states that “for populations whose Medicaid eligibility is determined using Supplemental Security Income (SSI) methodologies (but who are not necessarily eligible for SSI)…it is appropriate to recognize same-sex marriages that were celebrated in accordance with the laws of any state, territory, or foreign jurisdiction in which they took place…” However, “in view of the unique federal-state relationship that characterizes the Medicaid and CHIP programs, states may apply their own laws in deciding whether a couple is lawfully married,” CMS reiterates.

Of note, on July 17, CMS issued guidance regarding the conditions CMS intends to use to approve waivers authorizing states to use findings from the Supplemental Nutrition Assistance Program (SNAP) to support Medicaid eligibility determinations/re-determinations. The guidance discusses interactions with Medicaid eligibility using financial methodologies predicated on MAGI.

Statutory Text

 
Implementation Status 
Summary 

SEC. 2002. INCOME ELIGIBILITY FOR NONELDERLY DETERMINED USING MODIFIED GROSS INCOME. (a) IN GENERAL.—Section 1902(e) of the Social Security Act (42 U.S.C. 1396a(e)) is amended by adding at the end the following: ‘‘(14) INCOME DETERMINED USING MODIFIED ADJUSTED GROSS INCOME.—[As revised by section 1004(b)(1)(A) & 1004(e) of HCERA] ‘‘(A) IN GENERAL.—Notwithstanding subsection (r) or any other provision of this title, except as provided in subparagraph (D), for purposes of determining income eligibility for medical assistance under the State plan or under any waiver of such plan and for any other purpose applicable under the plan or waiver for which a determination of income is required, including with respect to the imposition of premiums and cost-sharing, a State shall use the modified adjusted gross income of an individual and, in the case of an individual in a family greater than 1, the household income of such family. A State shall establish income eligibility thresholds for populations to be eligible for medical assistance under the State plan or a waiver of the plan using modified adjusted gross income and household income that are not less than the effective income eligibility levels that applied under the State plan or waiver on the date of enactment of the Patient Protection and Affordable Care Act. For purposes of complying with the maintenance of effort requirements under subsection (gg) during the transition to modified adjusted gross income and household income, a State shall, working with the Secretary, establish an equivalent income test that ensures individuals eligible for medical assistance under the State plan or under a waiver of the plan on the date of enactment of the Patient Protection and Affordable Care Act, do not lose coverage under the State plan or under a waiver of the plan. The Secretary may waive such provisions of this title and title XXI as are necessary to ensure that States establish income and eligibility determination systems that protect beneficiaries. ‘‘(B) NO INCOME OR EXPENSE DISREGARDS.—Subject to subparagraph (I), no type of expense, block, or other income disregard shall be applied by a State to determine income eligibility for medical assistance under the State plan or under any waiver of such plan or for any other purpose applicable under the plan or waiver for which a determination of income is required. ‘‘(C) NO ASSETS TEST.—A State shall not apply any assets or resources test for purposes of determining eligibility for medical assistance under the State plan or under a waiver of the plan. ‘‘(D) EXCEPTIONS.— ‘‘(i) INDIVIDUALS ELIGIBLE BECAUSE OF OTHER AID OR ASSISTANCE, ELDERLY INDIVIDUALS, MEDICALLY NEEDY INDIVIDUALS, AND INDIVIDUALS ELIGIBLE FOR MEDICARE COST-SHARING.—Subparagraphs (A), (B), and (C) shall not apply to the determination of eligibility under the State plan or under a waiver for medical assistance for the following: ‘‘(I) Individuals who are eligible for medical assistance under the State plan or under a waiver of the plan on a basis that does not require a determination of income by the State agency administering the State plan or waiver, including as a result of eligibility for, or receipt of, other Federal or State aid or assistance, individuals who are eligible on the basis of receiving (or being treated as if receiving) supplemental security income benefits under title XVI, and individuals who are eligible as a result of being or being deemed to be a child in foster care under the responsibility of the State. ‘‘(II) Individuals who have attained age 65. ‘‘(III) Individuals who qualify for medical assistance under the State plan or under any waiver of such plan on the basis of being blind or disabled (or being treated as being blind or disabled) without regard to whether the individual is eligible for supplemental security income benefits under title XVI on the basis of being blind or disabled and including an individual who is eligible for medical assistance on the basis of section 1902(e)(3). ‘‘(IV) Individuals described in subsection (a)(10)(C). ‘‘(V) Individuals described in any clause of subsection (a)(10)(E). ‘‘(ii) EXPRESS LANE AGENCY FINDINGS.—In the case of a State that elects the Express Lane option under paragraph (13), notwithstanding subparagraphs (A), (B), and (C), the State may rely on a finding made by an Express Lane agency in accordance with that paragraph relating to the income of an individual for purposes of determining the individual’s eligibility for medical assistance under the State plan or under a waiver of the plan. ‘‘(iii) MEDICARE PRESCRIPTION DRUG SUBSIDIES DE- TERMINATIONS.—Subparagraphs (A), (B), and (C) shall not apply to any determinations of eligibility for premium and cost-sharing subsidies under and in accordance with section 1860D–14 made by the State pursuant to section 1935(a)(2). ‘‘(iv) LONG-TERM CARE.—Subparagraphs (A), (B), and (C) shall not apply to any determinations of eligibility of individuals for purposes of medical assistance for nursing facility services, a level of care in any institution equivalent to that of nursing facility services, home or community-based services furnished under a waiver or State plan amendment under section 1915 or a waiver under section 1115, and services described in section 1917(c)(1)(C)(ii). ‘‘(v) GRANDFATHER OF CURRENT ENROLLEES UNTIL DATE OF NEXT REGULAR REDETERMINATION.—An individual who, on January 1, 2014, is enrolled in the State plan or under a waiver of the plan and who would be determined ineligible for medical assistance solely because of the application of the modified adjusted gross income or household income standard described in subparagraph (A), shall remain eligible for medical assistance under the State plan or waiver (and subject to the same premiums and cost-sharing as applied to the individual on that date) through March 31, 2014, or the date on which the individual’s next regularly scheduled redetermination of eligibility is to occur, whichever is later. ‘‘(E) TRANSITION PLANNING AND OVERSIGHT.—Each State shall submit to the Secretary for the Secretary’s approval the income eligibility thresholds proposed to be established using modified adjusted gross income and household income, the methodologies and procedures to be used to determine income eligibility using modified adjusted gross income and household income and, if applicable, a State plan amendment establishing an optional eligibility category under subsection (a)(10)(A)(ii)(XX). To the extent practicable, the State shall use the same methodologies and procedures for purposes of making such determinations as the State used on the date of enactment of the Patient Protection and Affordable Care Act. The Secretary shall ensure that the income eligibility thresholds proposed to be established using modified adjusted gross income and household income, including under the eligibility category established under subsection (a)(10)(A)(ii)(XX), and the methodologies and procedures proposed to be used to determine income eligibility, will not result in children who would have been eligible for medical assistance under the State plan or under a waiver of the plan on the date of enactment of the Patient Protection and Affordable Care Act no longer being eligible for such assistance. ‘‘(F) LIMITATION ON SECRETARIAL AUTHORITY.—The Secretary shall not waive compliance with the requirements of this paragraph except to the extent necessary to permit a State to coordinate eligibility requirements for dual eligible individuals (as defined in section 1915(h)(2)(B)) under the State plan or under a waiver of the plan and under title XVIII and individuals who require the level of care provided in a hospital, a nursing facility, or an intermediate care facility for the mentally retarded. ‘‘(G) DEFINITIONS OF MODIFIED ADJUSTED GROSS IN- COME AND HOUSEHOLD INCOME.—In this paragraph, the terms ‘modified adjusted gross income’ and ‘household income’ have the meanings given such terms in section 36B(d)(2) of the Internal Revenue Code of 1986. ‘‘(H) CONTINUED APPLICATION OF MEDICAID RULES REGARDING POINT-IN-TIME INCOME AND SOURCES OF INCOME.—The requirement under this paragraph for States to use modified adjusted gross income and household income to determine income eligibility for medical assistance under the State plan or under any waiver of such plan and for any other purpose applicable under the plan or waiver for which a determination of income is required shall not be construed as affecting or limiting the application of— ‘‘(i) the requirement under this title and under the State plan or a waiver of the plan to determine an individual’s income as of the point in time at which an application for medical assistance under the State plan or a waiver of the plan is processed; or ‘‘(ii) any rules established under this title or under the State plan or a waiver of the plan regarding sources of countable income. ‘‘(I) TREATMENT OF PORTION OF MODIFIED ADJUSTED GROSS INCOME.—[As added by section 1004(e)(2) of HCERA] For purposes of determining the income eligibility of an individual for medical assistance whose eligibility is determined based on the application of modified adjusted gross income under subparagraph (A), the State shall— ‘‘(i) determine the dollar equivalent of the difference between the upper income limit on eligibility for such an individual (expressed as a percentage of the poverty line) and such upper income limit increased by 5 percentage points; and ‘‘(ii) notwithstanding the requirement in subparagraph (A) with respect to use of modified adjusted gross income, utilize as the applicable income of such individual, in determining such income eligibility, an amount equal to the modified adjusted gross income applicable to such individual reduced by such dollar equivalent amount.’’. (b) CONFORMING AMENDMENT.—Section 1902(a)(17) of such Act (42 U.S.C. 1396a(a)(17)) is amended by inserting ‘‘(e)(14),’’ before ‘‘(l)(3)’’. (c) EFFECTIVE DATE.—The amendments made by subsections (a) and (b) take effect on January 1, 2014.

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