KFF: States Adopt 5 New ACA Options to Improve Care

How is the Affordable Care Act Leading to Changes in Medicaid Today?

State Adoption of Five New Options

Kaiser Commission on Medicaid and the Uninsured Policy Brief  May 2012


One primary goal of the Affordable Care Act (ACA) is to significantly reduce the number of uninsured through a Medicaid expansion and the creation of new health insurance exchanges. In addition, the law provides states a range of new opportunities and federal financing alternatives for their Medicaid programs. This brief provides an overview of five key Medicaid options provided by the ACA and state take up of these to date. As of May 2012, nearly every state (43 states and DC) has taken steps forward with at least one of the five options (Table 1). To date, most state participation has been in funding to upgrade Medicaid eligibility systems (28 states and DC) and test integrated care models for dual eligible beneficiaries (26 states).


1. Getting an early start on the Medicaid expansion. Starting April 2010 the ACA provided states a new state plan option to cover adults with incomes up to 133% FPL to get an early start on the 2014 Medicaid expansion. Since April 2010, eight states (CA, CT, CO, DC, MN, MO, NJ, WA) have received  approval to expand Medicaid to adults early through the new option and/or a Section 1115 waiver.


2. Increased federal funding to upgrade Medicaid eligibility systems. In April 2011, the federal government approved a temporary funding opportunity, under which states can receive a 90% federal funding match for the design, development, and implementation of major upgrades or new Medicaid eligibility systems, up from the regular 50% administrative matching rate. As of January 1,  2012, 29 states had approved or submitted plans to overhaul or build new systems, and most of the  remaining states indicated interest in pursuing an upgrade during 2012.


3. New federal Medicaid funding for disease prevention. Medicaid Incentives for Prevention of Chronic Disease (MIPCD), established by the ACA and administered by CMS, provides a total of $85 million over five years (January 1, 2011-December 31, 2015) to test the effectiveness of providing

financial and non-financial incentives to Medicaid beneficiaries who participate in prevention programs and demonstrate changes in health risk and outcomes. As of January 1, 2012, ten states  (CA, CT, HI, MN, MT, NH, NV, NY, TX, WI) received the first round of MIPCD grant awards.


4. Health homes for individuals with chronic conditions. The ACA provides states with a new option to reform the delivery system for beneficiaries with chrchronic conditions by providing “health home” services and authorizes a temporary 90% federal match rate for these services. As of April 2012, CMS has approved six state plan amendments (SPA) in four states to provide health home services: two in MO; two in RI, one in NY, and one in OR. There are two additional health home SPAs under review in NC and WA, and CMS is reviewing draft proposals in five states (AL, IA, IL, OH, OK). In addition, CMS has approved funding requests from 15 states for planning activities to develop a  health home SPA.


5. Integrating financing and care for dual eligible beneficiaries. As provided by the ACA, in April 2011, the Center for Medicare and Medicaid Innovation, working with the CMS Medicare-Medicaid Coordination Office, awarded design contracts of up to $1 million each to 15 states to develop

service delivery and payment models integrating care for beneficiaries dually eligible for Medicare and Medicaid. In addition, as of April 2012, 26 states (including the 15 with design contracts) have submitted proposals to test models of integrated care and financing for dual eligible beneficiaries.


For details included in the whole article, see http://www.kff.org/medicaid/upload/8312.pdf