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HHS finalizes rule expanding Medicaid coverage

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The Department of Health and Human Services has published a final rule regarding the expansion of Medicaid under the Affordable Care Act.

Effective Jan. 1, the federal government will pay 100% of the cost of certain newly eligible adult Medicaid beneficiaries. These payments will be in effect through 2016 and phase down to a permanent 90% matching rate by 2020.

The ACA authorizes states to expand Medicaid to adult Americans under age 65 with incomes of up to 133% of the federal poverty level. Traditionally, mandatory Medicaid eligibility has been limited to low-income people who are children, parents or caretakers, pregnant women or seniors.

“More Americans will have access to health coverage, and the federal government will cover a vast majority of the cost,” HHS Secretary Kathleen Sebelius said in a news release. “Treating people who don’t have insurance coverage raises healthcare costs for hospitals, people with insurance and state budgets.”

Elected officials in some states have said they will not agree to expand Medicaid, citing budgetary constraints after the 100% federal funding begins to decrease.

The Congressional Budget Office last year projected about a third of those nationwide who would have been eligible for Medicaid will not be eligible — either because their state will opt out of the expansion, or will expand but to a more restrictive income threshold than the ACA has authorized.

In all, the CBO projected that 10 million to 11 million additional people will be enrolled in Medicaid and the Children’s Health Insurance Program as a result of the ACA. It projected a total of 29 million to 30 million newly insured people, through expanded Medicaid and the insurance exchanges for individuals, by about 2022. A recent report on insurance premiums by the Society of Actuaries put the number of newly insured at 32 million.

A PDF with more information about the improvements made to Medicaid in the runup to the expansion, visit www.medicaid.gov/State-Resource-Center/Events-and-Announcements/Downloads/MMF_Jan-Dec-2012_FINAL.PDF.

A PDF with the full text of the final rule is available at www.ofr.gov/OFRUpload/OFRData/2013-07599_PI.pdf.

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