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Expanded Medicaid Coverage Under Overhaul Law Needn't Wait 'Til 2014

By John Reichard, CQ HealthBeat Editor

April 9, 2010 -- While the health care overhaul law requires state Medicaid programs to expand their coverage in 2014 to include people with incomes up to 133 percent of the federal poverty line, that doesn't mean states have to wait until then to begin expanding their programs.

In a letter released late Friday by the Centers for Medicare and Medicaid Services, the agency notes that the law (PL 111-148) establishes a new Medicaid eligibility group and the option for states to begin providing medical assistance to those who qualify for the new group, effective April 1, 2010.

"Under the law, for the first time since the Medicaid program was established, states will receive federal Medicaid payments to provide coverage for the lowest income adults in their states, without regard to disability, parental status or most other categorical limitations, under their state Medicaid plans," says an April 9 letter to state Medicaid directors from Cindy Mann, director of the CMS Center for Medicaid and State Operations.
Mann said "this means that states do not have to wait until January 2014 to cover adults they have previously had no authority to cover under a state plan, including adults under age 65 who are neither disabled, pregnant, nor living with dependent children and who do not have other special circumstances."

When states have to begin covering the group in 2014, they will receive higher amounts to do so from the federal government. But "taking up the optional early expansion does not preclude or in any way affect receipt of the increased matching rate" in 2014, Mann added.

States that do choose to begin coverage now won't receive the increased levels of federal Medicaid payment temporarily available under the economic stimulus law.

States "can set the income eligibility standard for the new group at any level up to 133 percent of the federal poverty level," the letter says.

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