Modern Era Medicaid: Findings from a 50-State Survey of Eligibility, Enrollment, Renewal, and Cost-Sharing Policies in Medicaid and CHIP as of January 2015
Medicaid and CHIP Eligibility
As enacted, the ACA expanded Medicaid eligibility to adults with incomes at or below 138 percent of the federal poverty level (FPL) ($27,310 for a family of three in 2014), although this core provision was effectively made a state option by the Supreme Court’s 2012 ruling on the ACA. However, other eligibility changes in the law were unaffected by the Court’s decision, including establishing a new minimum coverage level of 138 percent of the FPL for children of all ages in Medicaid, helping to align Medicaid coverage across children. The ACA also changed the method for determining financial eligibility for Medicaid for children, pregnant women, parents, and adults and CHIP to a standard based on modified adjusted gross income (MAGI).1 This new approach is intended to prevent gaps in coverage between programs by largely adopting the rules for determining eligibility for subsidies to purchase Marketplace coverage. While these changes went into effect on January 1, 2014, some states continued to refine the conversion of their pre-ACA eligibility levels to MAGI-based standards. The findings below reflect eligibility levels for parents and other non-disabled adults, children, and pregnant women in Medicaid and CHIP as of January 1, 2015. They highlight Medicaid’s expanded role for low-income adults under the ACA and its continued role as a primary source of coverage for children and pregnant women.
Parents and Adults
As of January 1, 2015, 28 states set their Medicaid income eligibility levels for parents and other adults to at least 138 percent of the FPL, reflecting their implementation of the ACA Medicaid expansion (Figures 1 and 2). This count includes New Hampshire and Pennsylvania, which made decisions during 2014 to expand. Most states adopted the expansion consistent with federal rules and options provided under the ACA, but four states (AR, IA, MI, and PA) obtained Section 1115 waivers to expand Medicaid in ways that extend beyond the flexibility provided by the law.2 There is no deadline for states to expand Medicaid and additional states may decide to expand in the coming year. Two expansion states extend Medicaid income eligibility for adults to higher levels. Specifically, in the District of Columbia, parents with incomes up to 221 percent of the FPL and other adults with incomes up to 215 percent of the FPL are eligible, and Connecticut covers parents with incomes up to 201 percent of the FPL. Minnesota became the first state to implement a Basic Health Program (BHP) established by the ACA and transferred coverage for Medicaid enrollees with incomes between 138 and 200 percent of the FPL to the BHP as of January 1, 2015.
Among states that have implemented the Medicaid expansion, there have been increases in income eligibility levels for adults compared to pre-ACA levels. In these states, the median income eligibility level for parents rose from 106 percent of the FPL to 138 percent of the FPL. Increases in income eligibility levels for childless adults were even more significant, rising from a median of 0 to 138 percent of the FPL, reflecting the historic exclusion of childless adults from Medicaid prior to the ACA (Figure 3).
Medicaid income eligibility levels for parents remain very low, and, with only one exception, childless adults are ineligible for Medicaid in the 23 states that are not adopting the Medicaid expansion at this time. Fourteen states limit parent eligibility levels to less than half of the poverty level, and only four of the non-expansion states set their income eligibility levels for parents at or above 100 percent of the FPL, including Maine and Wisconsin, which both reduced eligibility levels for parents from pre-ACA levels (Figure 4). Wisconsin is also the only non-expansion state providing full Medicaid coverage to any childless adults, although eligibility at 100 percent of the FPL remains below the expansion level.3 In the other non-expansion states, where Medicaid income eligibility limits for adults are below poverty, many adults earn too much to qualify for Medicaid, but not enough to qualify for tax subsidies to purchase Marketplace coverage, which are not available to those with incomes below 100 percent of the FPL. Other Kaiser Family Foundation analysis finds that nearly four million poor uninsured adults fall into a coverage gap as a result of these limited eligibility levels.4 While this study reports FPL equivalents, it also is important to note that 17 non-expansion states base eligibility for parents on dollar thresholds. Most of these states do not routinely update these dollar-based standards, resulting in eligibility levels that erode over time relative to the cost of living.
Children and Pregnant Women
Coverage for children in Medicaid and CHIP remains strong and steady with the median income eligibility limit at 255 percent of the FPL. As of January 1, 2015, 28 states cover children with family incomes at or above 250 percent of the FPL, with 19 extending coverage to 300 percent of the FPL or higher (Figure 5). Only two states (ID, ND) limit children’s eligibility to below 200 percent of the FPL. Underlying these upper limits, eligibility levels reflect the ACA’s new minimum Medicaid eligibility level of 138 percent of the FPL for children of all ages. This change resulted in the shift of older children (ages 6 up to 19) with incomes between 100 and 138 percent of the FPL from CHIP to Medicaid in 18 of the 36 states maintaining separate CHIP programs, while California, New Hampshire, and Vermont have transitioned all of the children from their separate CHIP programs to Medicaid. States still receive enhanced federal CHIP matching funds for children transferred from CHIP to Medicaid under this requirement. Enrollment remains open for children in all states with separate CHIP programs, except for Arizona, which froze enrollment in its separate CHIP program prior to the ACA. The ACA established protections that prohibit states from applying any restrictions in eligibility or enrollment for children through September 2019.
States have continued to take up options that expand children’s access to coverage. Consistent with the ACA’s vision of a seamless continuum of coverage options, 21 states eliminated waiting periods in CHIP, including California which transitioned its separate CHIP program into Medicaid, and seven states reduced their waiting periods to 90 days or less, consistent with new federal rules. Illinois expanded CHIP coverage in 2013, with the expansion group between 209% and 317% FPL subject to a three-month waiting period. Reflecting this state action, as of January 1, 2015, 33 states do not have a waiting period that requires that a child be without group coverage for a specified period of time before enrolling in CHIP (Figure 6). In addition, more than half of all states (28) have taken up the option, established in 2009, to eliminate the five-year waiting period for lawfully-residing immigrant children, with Kentucky, Ohio and, West Virginia recently adopting the option. Additionally, seven states provide fully state- or locally-funded coverage to some children regardless of their immigration status. Under the ACA, all states must provide Medicaid coverage to former foster youth up to age 26 if they were in foster care in the state and enrolled in Medicaid on their 18th birthday. Nearly a quarter of states (12) have chosen to extend this coverage to former foster youth from other states. Six states have maintained programs that allow families with incomes over the upper limit for children’s coverage to buy into Medicaid or CHIP for their children, although this number has declined from its peak of 15 in 2011, reflecting the fact that higher income families now have new coverage options through the Marketplaces.
Nearly two-thirds of states (33) cover pregnant women with incomes at or above 200 percent of the FPL (Figure 7). This count reflects the reinstatement of CHIP coverage for pregnant women with incomes up to 205 percent of the FPL in Virginia during 2014. Ohio, West Virginia, and Wyoming also recently took up the option to eliminate the five-year waiting period for lawfully residing immigrant pregnant women, increasing the total number of states that have adopted this option since it was established in 2009 to 23. Further, 15 states cover income-eligible pregnant women regardless of immigration status through CHIP’s unborn child option, while four states provide fully state-funded coverage to some immigrant pregnant women.
Even with the Medicaid expansion, income eligibility levels for parents and other adults remain lower than those for children and pregnant women. The differences between parents and other adults and children and pregnant women are even starker among states that have not implemented the Medicaid expansion. In the non-expansion states, the median Medicaid income eligibility level is 45 percent of the FPL for parents and 0 percent of the FPL for other adults, compared to 138 percent of the FPL for parents and adults in expansion states and the significantly higher median Medicaid and CHIP eligibility levels for children and pregnant women in both expansion and non-expansion states (Figure 8).