CMS: States Could Adopt Medicaid Expansion, Then Drop It

No deadline exists for states to decide whether or not they will voluntarily participate in the Medicaid expansion under the Affordable Care Act (ACA), according to reports from the National Conference of State Legislatures (NCSL) annual summit in Chicago this week.
by | August 6, 2012

States face no deadline for deciding when and if they will expand Medicaid under the Affordable Care Act (ACA), according to the Centers for Medicare and Medicaid Services (CMS), and states that initially choose to participate could later drop that coverage.

Asked about comments made by Cindy Mann, deputy director for CMS, during the National Conference of State Legislatures (NCSL) summit in Chicago Monday, a CMS spokesperson confirmed to Governing that states can choose when and if they want to expand Medicaid.

The spokesperson also said that a state could initially expand its coverage to the ACA's new standards but then later choose to reduce it, the first public confirmation that CMS will give states that option.

Mann reportedly said at the NCSL summit Monday that no deadline had been established for states to decide on the Medicaid expansion, according to tweets from those in attendance. She was participating in a NCSL discussion on the fallout of the Supreme Court's decision on the health-care reform law.

These have been some of the key questions for states since the Court decided to essentially make the Medicaid expansion optional. The National Association of Medicaid Directors (NAMD) included inquiries about a timetable in its list of 30 questions to CMS, sent to clarify the implications of the Court's ruling, a scenario that few predicted prior to the decision.

Under the law, Medicaid is set to expand to 133 percent of the federal poverty level in 2014. However, Chief Justice John Roberts determined that the federal government could not withhold existing Medicaid funding for states that declined to expand their eligibility, thus removing the White House's enforcement mechanism and leaving the choice to expand to the states.

By making the expansion optional, many wondered if that meant states could wait longer to decide whether or not to participate or if they could initially join and then change their minds. Monday's comments from CMS are some of the first specific guidance from the office since the Court's ruling.

A Government Accountability Office report released last week concluded that states needed more information to assist in making their decision, and CMS officials informed the report's authors that new guidance would be forthcoming.

As Governing has detailed, state decisions on the expansion could determine whether millions of low-income Americans will receive health insurance. Billions of federal dollars are also at stake, as CMS would cover almost all of the costs for the newly eligible population.

Several governors have said since the Court's ruling that they will not voluntarily expand their Medicaid program, but many have taken a wait-and-see approach. It remains to be seen how a promise of more flexibility, as CMS's comments seem to indicate, will affect state action.

This story was updated at 2:15 p.m. Monday.


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