Many are wondering whether Medicaid falls under the Affordable Care Act and, to answer that question, yes – Medicaid offers health coverage to people with low incomes or disabilities.
Federal rules mandate states provide certain “mandatory” services, such as hospital and physician care. But each state may choose whether or not to cover more, or less coverage and offer optional benefits.
The Affordable Care Act (ACA) allocates Medicaid funding to states for individuals who meet both income and nonfinancial eligibility requirements, with some basic rules being established by the federal government; each state decides whether and which populations it covers; some even offer special programs that provide medical aid to people not eligible for Medicaid.
Eligibility for health insurance programs and marketplace subsidies is determined using the modified adjusted gross income (MAGI) methodology, which includes specific rules about who counts as part of a household and what counts as income. MAGI also determines financial eligibility for Children’s Health Insurance Program (CHIP), premium tax credits, and cost sharing reductions available through health insurance marketplaces.
States vary on how to count or exclude certain sources of income and assets when determining Medicaid eligibility on pathways based on old age or disability. Generally speaking, personal property, one vehicle used exclusively for transportation and funds held in an irrevocable burial trust do not count toward Medicaid eligibility.
Medicaid covers an extensive array of services, from medical to behavioral health care as well as long-term services and supports, nutrition and housing needs. Payment methods available under Medicaid can include Fee for Service, Rate or Managed Care with physicians being reimbursed at rates that fall significantly lower than Medicare or private insurers – making taking on Medicaid patients potentially disincentive for some practices.
The Affordable Care Act (ACA) expanded Medicaid eligibility to adults who earn up to 133% of the Federal Poverty Level, and allows states to disregard up to 5% of an individual’s income when calculating eligibility. The expansion represents one of the most groundbreaking pieces of healthcare legislation ever passed and will enable millions of low-income Americans to gain comprehensive, high-quality health coverage at an affordable price. Furthermore, Essential Health Benefits have also been established under this act.
The costs of Medicaid vary between states due to state flexibility in designing their Medicaid programs, including what services are covered and how providers are paid. Cost per enrollee also varies due to differences in health and population characteristics – in general it costs less to provide people coverage under Medicaid than private plans.
Medicaid also offers benefits not available on the individual market, such as free care for children and coverage of chronic conditions. Furthermore, Medicaid pays part of Medicare Part B costs; thus providing low-income individuals and families a much-needed safety net.
The Affordable Care Act was intended to significantly expand Medicaid eligibility, particularly among adults. The federal poverty line income threshold has been set at 138% of this amount while each state can set their own limit; as a result, Medicaid expansion covers people who otherwise may not have had access to affordable private coverage such as low wage jobs for small firms or service industries that generally don’t provide benefits.
Medicaid taxes are calculated based on an individual’s modified adjusted gross income (MAGI). MAGI generally includes all forms of income except unemployment compensation and alimony from divorces or separations finalized before January 1, 2019, some states also exclude rental real estate income and royalties, according to IRS-approved deductions such as retirement savings plans, IRA contributions, health insurance premiums, or child care expenses.
The Social Security Act authorizes States to use certain health care-related taxes to fund their non-federal share of Medicaid payment rates for providers, however the federal government must oversee such arrangements to ensure they do not violate Medicaid’s hold harmless requirements. These regulations implement and clarify relevant statutory provisions while also addressing various concerns raised by States and providers with regards to these arrangements. In response to several comments received by CMS about such arrangements, several commenters encouraged CMS to allow States to continue using existing listing of permissible tax classes without further regulation by CMS.