Medicaid Expansion, Insurance Exchanges Taxing State Health Agencies

John Moore | Kaiser Permanente | August 29, 2013

Medicaid is set to expand next year, and state IT departments are grappling with pressing deadlines, new eligibility rules and millions of potential applicants as they ready systems to accommodate the changes.

The expansion of government health insurance program stems from the Affordable Care Act (ACA), which seeks to expand Medicaid coverage to more low-income Americans. The revised program will include people under age 65 with incomes below 133 percent of the federal poverty level (FPL). The Congressional Budget Office and the Joint Committee on Taxation estimate that ACA will boost enrollment in Medicaid and the Children's Health Insurance Program by 13 million people over the next decade.

Medicaid is funded by federal and state governments, with each state administering its own program. States technology personnel are now prepping Medicaid systems for more enrollees and dealing with a new mechanism for determining Medicaid eligibility. The Modified Adjusted Gross Income (MAGI) methodology will provide a standard means test for all participating states. State eligibility determination systems will need to incorporate MAGI.

To top things off, states face a January 1, 2014 deadline for getting their systems in order. That's when Medicaid expansion goes into effect. Some states, however, hope to have enrollment systems operational in October, so people can begin applying for the new program. That same month, open enrollment is also scheduled to begin for state-operated health benefits exchanges, another component of ACA. The exchanges provide health coverage options for small businesses and uninsured people who don't qualify for Medicaid.