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Fact Sheet: Medicaid Expansion

On January 1, 2014, Medicaid will be expanded to 133% of poverty ($14,404 for individuals; $29,327 for families of four) regardless of traditional eligibility categories like health status and family composition (thus including childless adults).

It is estimated that the expansion will increase the Medicaid population by approximately 17 million individuals.

Enhanced federal funding for those newly eligible for Medicaid starts at 100% federal and phases down to 90% federal by 2020.

Those newly eligible for Medicaid through the expansion are not required to receive regular Medicaid benefits - instead benefits modeled on private insurance packages called benchmark plans may be offered to the newly enrolled group. Benchmark plans generally offer fewer benefits than standard Medicaid, and have historically limited access for individuals with mental health and substance use conditions by having greater utilization management not including benefits like rehabilitation and intensive community services. Benchmark plans are managed care plans, which might be administered by the state or by a private insurer.

Most states have historically opted to not use benchmark plans for currently eligible Medicaid beneficiaries, but this may change with the influx of newly eligible individuals. With all states experiencing difficult budget climates, states will likely be looking to move some or all of its current and new beneficiaries into managed care plans.

Mental Health and Substance Use Benefits

The mental health and substance use benefits that are required of plans offered through the Exchanges will apply to those newly eligible for Medicaid through the expansion. Additionally, the federal parity requirements established by the Mental Health Parity and Addiction Equity Act of 2008 will also apply to those newly eligible for Medicaid, and all Medicaid managed care plans. Therefore, mental health and substance use benefits must be offered in the Medicaid expansion, and they must be offered at parity with medical services in the plan.

Other Important Medicaid Provisions

  • States have the option to expand Medicaid (with regular match) to childless adults beginning April 1, 2010. To date, Connecticut and DC have opted to expand their Medicaid programs early. Recent reports indicate Minnesota will opt in early as well.
  • State maintenance of effort requirement directs states to maintain their eligibility levels for adults until the Secretary of HHS deems the Exchanges to be fully operational (expected 2014) and for children in Medicaid and CHIP through September 2019. (This MOE does not apply to benefit levels.)
  • The existing Medicaid state plan option for covering home and community-based services is expanded to include individuals with higher incomes and to cover more services.

Next Steps

  • Advocate for benefit plans that will be developed for the expanded population to include robust mental health and substance abuse services. This will require meeting with your state Medicaid Director and Mental Health Commissioner to discuss the requirements of managed care companies who are seeking contracts for the Medicaid benchmark or standard plans.
  • Advocate for robust mental health and substance abuse services as essential benefits for the Exchanges, as these will be the basis for the essential benefits in the Medicaid expansion plans.
  • Advocate for appropriate outreach processes to identify and enroll individuals in traditional or managed Medicaid.
  • For more information on specific ways to get involved, please see MHA's Health Reform Strategy Brief.