Historically, Medicaid eligibility has generally been limited to certain low-income children, pregnant women, parents of dependent children, the elderly, and individuals with disabilities; however, starting January 1, 2014, states have the option to extend Medicaid coverage to most non-elderly, nonpregnant adults with income up to 133% of the federal poverty (FPL). This expansion of Medicaid eligibility is one of a number of changes the Patient Protection and Affordable Care Act (ACA, P.L. The ACA Medicaid expansion (as initially enacted) established 133% of FPL as the new mandatory minimum Medicaid income eligibility level for most non-elderly, nonpregnant adults. The Supreme Court decision in National Federation of Independent Business (NFIB) v. Sebelius made the ACA Medicaid expansion optional rather than mandatory. The federal government funds a vast majority of the cost for the ACA Medicaid expansion. On June 28, 2012, the Supreme Court issued its decision in NFIB , and the Supreme Court held that the ACA Medicaid expansion violated the Constitution. If a state accepts the ACA Medicaid expansion funds, it must abide by the new expansion coverage rules. For instance, MAGI counting rules are used for determining eligibility for the ACA Medicaid expansion population, and individuals covered under the ACA Medicaid expansion are required to receive alternative benefit plan (ABP) coverage. Financing

The ACA provides different federal Medicaid matching rates for the individuals that will gain Medicaid coverage through the ACA Medicaid expansion. The federal government's share of most Medicaid expenditures is determined according to the FMAP rate, but exceptions to the regular FMAP rate have been made for certain states, situations, populations, providers, and services. The ACA adds a few FMAP exceptions for the ACA Medicaid expansion: the "newly eligible" FMAP rate, the "expansion state" FMAP rate, and the additional FMAP increase for certain expansion states. Additional FMAP Increase for Certain "Expansion States"

During 2014 and 2015, an FMAP rate increase of 2.2 percentage points is available for "expansion states" that (1) the Secretary of the Department of Health and Human Services (HHS) determines will not receive any FMAP rate increase for "newly eligible" individuals and (2) have not been approved to use Medicaid disproportionate share hospital (DSH) funds to pay for the cost of health coverage under a waiver in effect as of July 2009. State Decisions

On January 1, 2014, when the ACA Medicaid expansion went into effect, 24 states and the District of Columbia included the expansion as part of their Medicaid programs. Michigan implemented the expansion on April 1, 2014, and New Hampshire implemented the expansion on July 1, 2014. Alternative Models

Most states implementing the ACA Medicaid expansion will do so through an expansion of their current Medicaid program. However, some states are implementing the expansion through alternative models, such as premium assistance through the "private option" and health savings accounts. States Not Implementing the Expansion

State decisions not to implement the ACA Medicaid expansion could have implications for low-income individuals, large employers with low wage workers, and hospitals. However, most uninsured individuals with incomes under 100% of FPL living in states that decide not to implement the ACA Medicaid expansion will likely remain uninsured, because these individuals are not eligible for premium tax credits or the cost-sharing subsidies to purchase health insurance through the exchanges. Large Employers with Low-Wage Workers

Large employers with low-wage workers in states that do not implement the ACA Medicaid expansion might have greater exposure to employer penalties included in the ACA when the penalty goes into effect in 2015.
Historically, Medicaid eligibility has generally been limited to certain low-income children, pregnant women, parents of dependent children, the elderly, and individuals with disabilities; however, as of January 1, 2014, states have the option to extend Medicaid coverage to most non-elderly, low-income individuals.
The Patient Protection and Affordable Care Act (ACA; P.L. 111-148 as amended) established 133% of the federal poverty level (FPL) (effectively 138% of FPL with an income disregard of 5% of FPL) as the new mandatory minimum Medicaid income eligibility level for most non-elderly individuals. On June 28, 2012, the U.S. Supreme Court issued its decision in National Federation of Independent Business v. Sebelius, finding that the enforcement mechanism for the ACA Medicaid expansion violated the Constitution, which effectively made the ACA Medicaid expansion optional for states.
If a state accepts the ACA Medicaid expansion funds, it must abide by the expansion coverage rules. For instance, modified adjusted gross income (MAGI) counting rules are used for determining eligibility for the ACA Medicaid expansion population, and individuals covered under the ACA Medicaid expansion are required to receive alternative benefit plan (ABP) coverage.
The ACA provides different federal Medicaid matching rates for the individuals who receive Medicaid coverage through the ACA Medicaid expansion. The federal government's share of most Medicaid expenditures is determined according to the federal medical assistance percentage (FMAP) rate, but exceptions to the regular FMAP rate have been made for certain states, situations, populations, providers, and services. The ACA adds a few FMAP exceptions for the ACA Medicaid expansion: the "newly eligible" FMAP rate, the "expansion state" FMAP rate, and the additional FMAP increase for certain expansion states. Due to these ACA FMAP rates, the federal government pays for a vast majority of the cost of the ACA Medicaid expansion.
On January 1, 2014, when the ACA Medicaid expansion went into effect, 24 states and the District of Columbia had included the ACA Medicaid expansion as part of their Medicaid programs. Michigan and New Hampshire implemented the expansion on April 1, 2014, and July 1, 2014 (respectively). Pennsylvania recently received approval to implement the ACA Medicaid expansion beginning on January 1, 2015.
Most states implementing the ACA Medicaid expansion will do so through an expansion of their current Medicaid program. However, some states are implementing the expansion through an alternative method, such as the "private option" (i.e., premium assistance to purchase health insurance through the health insurance exchanges under the ACA) and health savings accounts.
State decisions not to implement the ACA Medicaid expansion could have implications for low-income individuals, large employers with low-wage workers, and hospitals. For example, most uninsured individuals with incomes under 100% of FPL will likely remain uninsured, and large employers with low-wage workers might have greater exposure to employer penalties included in the ACA. Also, Medicaid disproportionate share hospital (DSH) allotments will be reduced by the same across the nation whether or not states implement the expansion.