Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



Newsletter Article


Governors Want Answers on Expansion, but CMS Still Analyzing Court Ruling

By Rebecca Adams, CQ HealthBeat Associate Editor

July 30, 2012 --The top federal Medicaid official said Monday that it will probably take states “several months” to decide whether they want to expand their Medicaid programs in 2014.

Cindy Mann, the deputy administrator of the Centers for Medicare and Medicaid Services (CMS), said that she wants to be careful about responding to the hundreds of questions state officials and health policy experts have pelted her with since June 28 when the Supreme Court ruled that states would not lose any existing federal Medicaid money if they refuse to expand Medicaid as the health care law envisions.

The law (PL 111-148, PL 111-152) called for states to expand coverage for anyone who earns less than 138 percent of the federal poverty level. Under the law as written, it would have cost states all of their federal matching rates for their current and expanded Medicaid programs if they turned it down. But the court decided that states would not have to lose matching funds for the existing programs, thus giving them a penalty-free option of not expanding the federal-state health program for the poor.

Mann said that she wants to think through all of the questions comprehensively rather than answer each inquiry in a piecemeal way.

“We’re still sorting through the implications of the Supreme Court decision,” Mann said at a forum sponsored by the Bipartisan Policy Center.

She reminded the audience that “there is not a particular deadline by which a state has to declare its intention” about whether it plans to expand Medicaid, unlike the deadlines states face this November for informing federal officials about whether they plan to create their own state-based exchanges. Mann noted that in many states, legislators will want to weigh in on the decision. And in many states, their legislatures do not reconvene until January.

Governors in five states have said that they intend to expand Medicaid, while those in a half dozen others said that they do not plan to expand the program. The rest are undecided, with many governors saying that they plan to wait until after the November elections to announce a decision.

Expansion Implementation Proceeding
In the meantime, Mann said the federal government is moving ahead on efforts to push states to establish new eligibility systems, expand integrated care and coordinate with other coverage programs to create a seamless system.

Whether or not a state chooses to expand Medicaid, Mann is trying to get out the word that under the current Medicaid system, a higher federal matching rate of 90 percent, compared to the average of 57 percent for many other Medicaid expenses, is still available to states if they update their eligibility systems.

CMS officials are also encouraging states to experiment with integrated models of delivering care, through initiatives similar to accountable care organizations (ACOs) or medical home projects. States do not have to get a waiver to test out these models. CMS officials sent out a letter on July 10 to state Medicaid directors explaining their goals.

Mann said that in the past two months, CMS has created state operational technical assistance (SOTA) teams so that each state will work with a specific group of close advisors from the regional and federal CMS offices. The goal, said Mann, was to have a “consistent group of people who know what’s going on in that state.”

At a panel discussion following Mann’s remarks, National Governors Association Executive Director Dan Crippen said that governors are not just weighing whether expanding Medicaid makes sense in the short term. For the first three years, the federal government is expected to pick up all of the costs for the newly eligible population. But Crippen said governors are nervous about whether Congress may, in future budget deals, reduce Medicaid matching rates.

That wariness, and the desire of the Obama administration to see states expand their programs, may lead to some negotiations and dealmaking between CMS officials and some states.

Crippen said that there is the “potential for more flexibility, our code word,” as governors discuss the future of Medicaid in their states with federal officials.

Matt Salo, the director of the National Association of State Medicaid Directors, predicted that state officials would “use any kind of leverage, any kind of advantage” they have to get better deals and more control over their Medicaid programs than they normally would.

Meg Murray, the CEO of the Association for Community Affiliated Plans, which represents Medicare and Medicaid managed care plans, predicted that state officials might ask for the ability to charge higher cost-sharing, such as co-payments for people in Medicaid in exchange for agreeing to expand the program. The insurers that Murray represents support the Medicaid expansion.

One question is whether federal officials will allow states to partially expand Medicaid, in other words, to expand coverage to a group earning less than 133 percent of the federal poverty level. Crippen predicted that federal officials will see it as in their interest to take a hard line and push states to cover the entire expansion group in order to get the full federal matching rate of 100 percent initially.

“My best guess is HHS will say no” to questions about whether states could supplement premiums for adults who earn, for example, 100 percent of the poverty level rather than 133 percent. Crippen said that a recent estimate by the Congressional Budget Office about the number of people who would be covered by the Medicaid expansion was reasonable, given what CBO analysts know now, but that there are “important questions that HHS is grappling with that the estimate somewhat begs.”

Crippen said that to provide a more precise estimate, CBO analysts would have to have information in regulations that “we haven’t seen and don’t know when we’ll see.”

CMS Guidance on Integrated Care (pdf) 

Rebecca Adams can be reached at [email protected].

Publication Details