HHS Proposes Coverage Rules for Medicaid Expansion

The U.S. Department of Health and Human Services has outlined for the first time the coverage that states must offer new Medicaid enrollees if they decide to expand the program.
by | November 20, 2012
 

Amid a flood of new Affordable Care Act (ACA) regulations following President's Obama's reelection, the U.S. Department of Health and Human Services (HHS) has outlined for the first time the coverage that states must offer new Medicaid enrollees if they decide to expand the program under the law.

Most of the newly eligible enrolles will be childless adults, a population not covered by many states' current Medicaid programs. So, if states expand, they'll have to design a new benefit plan for that new population. HHS also explained how states can make sure those new Medicaid plans satisfy the ACA's requirements for essential health benefits (minimum coverage limits in 10 core areas) that will apply to all health insurance plans.

Here's how they can do it, according to a letter that Cindy Mann, director of the HHS Center for Medicaid and CHIP Services, sent to state Medicaid directors Tuesday:

  • First, as under the Social Security Act, states can choose a Medicaid benchmark plan as a baseline for the new population's coverage, as they have already done for existing Medicaid plans. The potential benchmarks are: the federal employee health plan, the state employee health plan, the largest HMO plan in the state or a state-designed plan that is approved by HHS.
  • Conveniently, three of those potential Medicaid benchmarks (the federal employee plan, the state employee plan and the HMO plan) are also essential health benefits benchmarks under other HHS guidance. So, if a state selects one of those as its Medicaid benchmark, HHS will consider the broader essential health benefits requirements to be met.
  • If a state goes with a state-designed, HHS-approved plan, however, the state will still select an essential health benefits benchmark and then add any coverage from that benchmark to its new Medicaid plan that's needed to ensure the essential health benefits requirements are met.

States can begin submitting their Medicaid benchmarks in the first quarter of 2013. The new Medicaid coverage plans will be in effect during the first year of the expansion (through Dec. 31, 2015), and then HHS will evaluate whether any changes need to be made.

The Medicaid expansion, which June's Supreme Court ruling made optional for states, is expected to cover up to 17 million people starting in 2014 if all 50 states elect to expand. Several GOP governors have said that they will not in the months since the ruling, although final decisions will be made during next year's legislative sessions.

Mann's letter to state Medicaid directors is below.

 

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