NC: CMS Director Says States May Delay or Drop Out of Medicaid Expansion

CMS Director Says States May Delay or Drop Out of Medicaid Expansion

National Council  August 10, 2012

Cindy Mann, Deputy Administrator at the Centers for Medicare and Medicaid Services (CMS) announced this week that states may take up the health reform law’s Medicaid expansion and later drop out. She also said that states may delay their implementation of the Medicaid expansion and still receive the higher federal matching rate included in the Affordable Care Act.

Mann’s comments are the latest guidance from CMS on how it intends to interpret the Supreme Court’s recent ruling to uphold the health law but prohibit the federal government from withdrawing Medicaid funding from those states that opt not to participate in the expansion. The ruling essentially made the Medicaid expansion voluntary by removing its only enforcement mechanism. It also raised many questions about the degree of flexibility that states will have as they decide how and whether to participate in the expansion.

One big remaining question for states is whether they will be permitted to do a partial expansion and still receive the higher federal matching rate. In addition, some states have argued that the Court’s decision should also invalidate the law’s Maintenance of Effort provisions, which prevent states from reducing Medicaid eligibility until the expansion takes place in 2014. In a letter last month, Health and Human Services Secretary Kathleen Sibelius emphasized that the Court’s ruling applied only to the Medicaid eligibility expansion and did not affect other areas of the law.

For more resources on the Medicaid expansion, please see our blog.