The Patient Protection and Affordable Care Act (ACA), enacted to significantly overhaul the U.S. healthcare system, brought about numerous changes to Medicaid. A key aspect of this landmark legislation is its intricate relationship with Medicaid, particularly concerning the expansion of coverage. Understanding whether Medicaid is part of the Affordable Care Act requires examining the core provisions of the ACA and how they interact with existing Medicaid programs.
The Affordable Care Act and Medicaid Expansion
Perhaps the most prominent change introduced by the ACA to Medicaid was the expansion of eligibility. The ACA aimed to broaden health insurance coverage by enabling states to extend Medicaid eligibility to adults with incomes up to 133 percent of the federal poverty level (FPL). Due to an income disregard, this effectively translates to 138 percent FPL in many discussions. This expansion was initially mandated for all states. However, a pivotal Supreme Court decision in National Federation of Independent Business v. Sebelius in June 2012 altered the landscape, making Medicaid expansion an optional choice for states. Despite this shift to state autonomy, a significant majority of states, over three-quarters, have chosen to implement this expansion, demonstrating its widespread acceptance and impact on healthcare access.
Beyond Expansion: Other ACA Provisions Impacting Medicaid
While Medicaid expansion is a central pillar of the ACA’s influence on Medicaid, the ACA’s reach extends further. The law was designed to increase the number of insured Americans through multiple avenues, not solely Medicaid. It established premium tax credits to assist individuals in purchasing private health insurance through the Health Insurance Marketplaces. Furthermore, the ACA enacted crucial reforms within the private insurance market, most notably eliminating exclusions based on pre-existing conditions and setting annual limits on out-of-pocket expenses. The ACA also allowed young adults to remain on their parents’ health insurance plans until the age of 26 and initially included an individual mandate, requiring most people to have minimum essential health coverage (though this mandate has since been repealed).
Further Medicaid and CHIP Provisions within the ACA
The ACA also incorporated several other provisions directly affecting Medicaid and the State Children’s Health Insurance Program (CHIP). One notable measure was the maintenance-of-effort requirement. This provision prevented states from tightening Medicaid eligibility criteria below the levels in place when the ACA was enacted. This requirement was in effect until 2014 for adults and 2019 for children, ensuring stability in coverage during the ACA’s initial implementation. Additionally, the ACA standardized the minimum Medicaid eligibility threshold for children at 133 percent FPL across states. This standardization necessitated some states to transition older children from separate CHIP programs into Medicaid to align with the new federal guidelines. Before the ACA, Medicaid eligibility levels for children varied by age, with different FPL thresholds for infants and younger children compared to older children.
To further enhance access and streamline processes, the ACA included provisions to simplify eligibility determination, enrollment, and renewal procedures for Medicaid, CHIP, and subsidized marketplace coverage. A key aspect of this simplification was the requirement for a single, streamlined application process for these programs. These changes, among others, have contributed to increased enrollment and spending in Medicaid across all states, irrespective of whether they expanded Medicaid eligibility for non-disabled adults.
Disproportionate Share Hospital (DSH) Payment Adjustments
Finally, the ACA also addressed federal funding for Disproportionate Share Hospital (DSH) payments. The ACA anticipated that the expansion of health coverage would lead to a reduction in uncompensated care provided by hospitals. Based on this assumption, the ACA included provisions for reductions in federal DSH payments. However, these reductions have faced multiple delays and are currently scheduled to take effect in FY 2024.
In conclusion, Medicaid is undeniably and significantly intertwined with the Affordable Care Act. The ACA not only aimed to expand Medicaid coverage but also incorporated numerous provisions that reformed and reshaped the program alongside broader healthcare market changes. Understanding the ACA necessitates recognizing its profound impact on Medicaid and the millions of Americans who rely on it for healthcare coverage.
