2014 Medicaid Eligibility Transition Toolkit for States

Charting the Road to Coverage Issue Brief and Toolkit July 2012 2014 Transition Toolkit for States Prepared by Mary Henderson, Abigail Arons, and Alice Weiss, National Academy for State Health Policy TOOLKIT TABLE OF CONTENTS Overview... 2 Issue Brief: Analysis of Changes and Implications for Selected and CHIP Groups in 2014... 3 Instructions for Matrix... 17 Example Matrix (State A eligibility crosswalk)... 19 Blank Matrix (for eligibility crosswalk)...see Separate Excel File ABOUT THE PROGRAM State Health Reform Assistance Network, a program of the Robert Wood Johnson Foundation, provides in-depth technical support to states to maximize coverage gains as they implement key provisions of the Affordable Care Act. The program is managed by the Woodrow Wilson School of Public and International Affairs at Princeton University. For more information, visit www.rwjf.org/coverage. ABOUT NASHP The National Academy for State Health Policy (NASHP) is an independent academy of state health policymakers. We are dedicated to helping states achieve excellence in health policy and practice. A non-profit and nonpartisan organization, NASHP provides a forum for constructive work across branches and agencies of state government on critical health issues. Our funders include both public and private organizations that contract for our. For more information, visit www.nashp.org. ABOUT THE ROBERT WOOD JOHNSON FOUNDATION The Robert Wood Johnson Foundation focuses on the pressing health and health care issues facing our country. As the nation's largest philanthropy devoted exclusively to health and health care, the Foundation works with a diverse group of organizations and individuals to identify solutions and achieve comprehensive, measureable and timely change. For 40 years the Foundation has brought experience, commitment, and a rigorous, balanced approach to the problems that affect the health and health care of those it serves. When it comes to helping Americans lead healthier lives and get the care they need, the Foundation expects to make a difference in your lifetime. For more information, visit www.rwjf.org. Follow the Foundation on Twitter www.rwjf.org/twitter or Facebook www.rwjf.org/facebook. ACKNOWLEDGEMENTS The authors wish to thank our consultant Jim Jones, of Sellers Dorsey, who offered excellent feedback and creative thinking on drafts of the toolkit. We also acknowledge Anne Gauthier, Senior Program Director at NASHP, who gracefully lead our team and gave great editorial advice and assistance. For more information, please contact Mary Henderson at mhenderson@nashp.org or 202-903-0101. The State Health Reform Assistance Network is a national program of the Robert Wood Johnson Foundation

Overview The Patient Protection and Affordable Care Act (ACA) and the final eligibility rules issued by the Centers for Medicare and Services (CMS) make major changes to the medical assistance program eligibility landscape starting in 2014. 1 States are responsible for transitioning their current medical assistance programs to reflect these changes, chiefly by consolidating and expanding their non-disabled, non-elderly groups, and by updating income standards to reflect the new Modified Adjusted Gross Income (MAGI) methodology. The 2014 Transition Toolkit is designed to assist states in systematically identifying issues and decisions they will face as they convert to 2014. The toolkit was originally provided to two states by the National Academy for State Health Policy (NASHP) as part of the State Health Reform Assistance Network that is funded by the Robert Wood Johnson Foundation. NASHP has updated the toolkit to be applicable to any state and to reflect the final eligibility rules. The toolkit includes: Issue Brief: A brief, Analysis of Changes and Implications for Selected and CHIP Groups in 2014, provides a detailed overview of the final federal eligibility rules, transition issues and decision points that states will spot as they fill out the Matrix. The brief is also written to be useful with or without the other components of the toolkit. Instructions: Step-by-step instructions on how to fill out the Matrix. Blank Matrix: Crosswalk matrix for states to fill out Example Matrix: A completed matrix for Sample State A for reference. The blank matrix is intended to allow states to systematically crosswalk their eligibility categories from current groups to the coverage groups that will exist in 2014. Organized by the four new MAGI categories (i.e., children, parents and caretaker relatives, pregnant women, and other adults), the matrix compares current income eligibility, federal financial participation and benefit design of the eligibility groups with the required or optional health coverage landings in 2014. States have great variety in their current eligibility categories. The example matrix for Sample State A reflects features that are likely to be common in many states. It also reflects the 2014 options available for each 2012 eligibility category without presuming any decisions by Sample State A officials. The blank matrix is intended to be manipulated to meet the user s needs. Establishing the 2014 options on the matrices involved the following analysis for each 2012 category: Which of the four MAGI groups (i.e., children, parents and caretaker relatives, pregnant women, and other adults) will be appropriate for this category? Is this category subject to a Maintenance of Effort provision after 2014? Would the optional expanded group be an option for this category? Would the Basic Health Program be an option for this category? If not eligible for other minimum essential coverage, could this group access advanced premium tax credits on the exchange? Would maintaining the current (2012) program be required or an option for this category? This analysis covers the major options available in 2014, but is not intended to discourage more creative thinking among the states. 1 Patient Protection and Affordable Care Act, P.L. 111-148, as amended by the Health Care and Education Reconciliation Act, P.L. 111-152; Center for Medicare & Services (CMS), HHS, Final rule; Interim Final Rule, Program; Changes under the Affordable Care Act, 77 F.R. 17144 (March 23, 2012) [the eligibility rule ]. 2 2014 Transition Toolkit for States

Issue Brief Analysis of Changes and Implications for Selected and CHIP Groups in 2014 ISSUE BRIEF TABLE OF CONTENTS Introduction... 4 Summary... 4 Background... 5 Shifting to Modified Adjusted Gross Income (MAGI) Methodology... 5 Consideration of Uninsured in 2014... 5 Issues by Population... 6 Children, Ages 0 19... 6 Considerations for transitioning children to 2014:... 7 Maintenance of effort.... 7 Required enrollment.... 7 Increased mandatory income limit for children age 6 to 19 in.... 7 19 and 20 year-old young adults.... 7 Former foster children covered.... 7 Categorical and Section 1931 eligibility.... 8 Pregnant Women... 8 Transitional considerations for pregnant women:... 9 Flexibility to increase eligibility income limit.... 9 Coverage for pregnant women under CHIP.... 9 Impact on other eligibility groups.... 9 Decision points:... 9 Determine how to count pregnant women in household composition.... 9 Determine new eligibility standards and benefit packages for pregnant women... 9 Parents and Caretaker Relatives... 10 Transitional considerations for parents and caretaker relatives:... 11 eligibility for adults at or below 133% FPL... 11 Transitional Medical Assistance (TMA)... 11 Caretaker relatives age 65 and over.... 11 Decision points:... 11 Determine the definition of caretaker relative.... 11 Decide whether to eliminate deprivation standard in the definition of dependent child... 11 Determine coverage options for parents and caretaker relatives above 133% FPL... 12 Other Adults... 12 Transitional considerations for adults:... 13 Adult eligibility and enhanced FMAP... 13 The standard for newly eligible and enhanced FMAP... 13 Implications for the Breast and Cervical Cancer Program... 13 Decision points:... 13 Determine future of covered adults at or below 133% FPL... 13 Determine options for covering adults above 133% FPL... 14 Determine structure of Family Planning waiver or option... 14 Additional Considerations... 14 Express Lane as a tool for simplifying the transition... 14 Relationship to other programs... 15 Presumptive... 16 Conclusion... 16 3 2014 Transition Toolkit for States

INTRODUCTION The Patient Protection and Affordable Care Act (ACA) has prompted the Centers for Medicare and Services (CMS) to promulgate and CHIP eligibility rules designed to simplify and collapse eligibility categories in preparation for the changes in that will become effective under the ACA in 2014. 2 The eligibility final rule coordinates closely with two other rulemakings on the operation of health insurance exchanges and eligibility for the Advanced Premium Tax Credit and Cost-Sharing Reductions (APTC/CSR) that will be available to subsidize private insurance through the exchanges. 3 The eligibility rule requires states to reorganize their existing eligibility structures in light of the new federal structure. The changes in eligibility categories apply primarily to low-income children and adults whose eligibility is not tied to being elderly, disabled, or needing long term and supports. In addition to implementing changes in categories, states will use a new income methodology, the Modified Adjusted Gross Income (MAGI) methodology, to determine and CHIP eligibility for most low-income children and adults beginning in 2014. The MAGI methodology also applies primarily to groups whose eligibility is not tied to being elderly, disabled, or needing long term and supports. In the eligibility rule, CMS consolidated most existing eligibility categories that will be affected by the shift to MAGI into four groups: 1. Children Under Age 19 2. Pregnant Women 3. Parents and Caretaker Relatives 4. Adults To assist state agencies as they plan the transition from their current categories to these MAGI-related categories, the National Academy for State Health Policy (NASHP) has prepared the 2014 Transition Toolkit for States, comprised of two matrices and this issue brief. One matrix is a blank document that administrators can fill in like a worksheet, and the other is an example of a completed matrix for a sample hypothetical state. Organized by the four new consolidated categories, the matrices compare the eligibility groups of today to their required or optional health coverage landings in 2014 in terms of income eligibility, federal financial participation, and benefits. Also organized by eligibility group, this issue brief is intended as a deeper analysis to help states think through the issues and decisions points they identify using the matrices. The bulk of the analysis and writing for this brief and toolkit were written before the recent Supreme Court decision in National Federation of Independent Businesses, et al. v. Sebelius, No. 11-393 (June 28, 2012), which upheld the ACA, but also held that states that do not expand coverage with their enhanced matching funds to 133 percent of the federal poverty level may not be subject to the withholding of all their federal funds, but rather only the funds related to the expansion. We have reviewed the content and adapted where needed to take the decision into account. At the time of this writing the brief does not benefit from CMS guidance related to the decision. For the purpose of this material, we interpret the decision as applying only to adults who would be newly eligible adults covered with 100 percent federal funds in 2014 in the new adult group. In addition, because the Court s decision addressed only the consequences for failing to comply with the expansion, and because the statute and regulations establish the group as a mandatory category, this toolkit and brief treats them as a mandatory category as well. NASHP prepared this issue brief and related toolkit as part of the State Health Reform Assistance Network (State Network), funded by the Robert Wood Johnson Foundation. NASHP initially undertook similar analyses for two individual states to assist them in systematically identifying issues and decision points they must address as they prepare for the transition to 2014. NASHP built off these state-specific products to develop a more general product that all states would find useful. The work was further informed by the recent promulgation of the final eligibility rule. SUMMARY This issue brief analyzes key considerations for states as they transition their current and CHIP eligibility structure to a new structure for 2014. The background section sets the context for the transition for states. The next section provides a 2 Patient Protection and Affordable Care Act, P.L. 111-148, as amended by the Health Care and Education Reconciliation Act, P.L. 111-152; Center for Medicare & Services (CMS), HHS, Final rule; Interim Final Rule, Program; Changes under the Affordable Care Act, 77 F.R. 17144 (March 23, 2012). [Hereinafter the eligibility rule ]. 3 Internal Revenue Service, Health Insurance Premium Tax Credit, Notice of Proposed Rulemaking, 1.36B-2(c), 76 F.R. 50931 (August 17, 2011) [Hereinafter, IRS NPRM ]; Department of Health and Human Services, Patient Protection and Affordable Care Act; Establishment of Exchanges and Qualified Health Plans; Exchange Standards for Employers, Final Rule, Interim Final Rule 77 F.R. 18310 (March 27, 2012) [Hereinafter, Exchange final rule ]. 4 2014 Transition Toolkit for States

synthesis of the minimum and maximum eligibility levels for the four major eligibility groups and highlights many of the decision points that arise for states in the transition process. The following section highlights a few important tools states could use to simplify the transition and assist with enrollment in 2014. The brief concludes with an enumeration of several issues not covered that states will need to consider, and recommendations on how states can use this toolkit as a framework for analysis to apply to additional issues as they arise. BACKGROUND Shifting To Modified Adjusted Gross Income (MAGI) Methodology In 2014, states will use the MAGI methodology for calculating eligibility for and CHIP for most people under 65. The categories exempt from the MAGI methodology are those categories covering individuals who are categorically eligible (without need for an income determination); blind; disabled; age 65 or over where age is a condition of eligibility; or seeking coverage based on the need for long term and supports, Medicare cost-sharing assistance, or medically-needy coverage. The MAGI methodology differs in several ways from the methodology related to the Aid to Families with Dependent Children (AFDC) program that states use today to determine and CHIP eligibility for most children and adults under 65. The AFDC-related methodology includes significant disregards of income, whereas MAGI uses an income calculation based on modified adjusted gross income as defined in tax regulations and a flat disregard of an amount equivalent to a 5 percentage point increase of the applicable income limit expressed as a percentage of the Federal Poverty Level (FPL). MAGI also uses (with some important exceptions) a household composition definition based upon the taxpayer and his or her dependents. Forthcoming guidance from CMS and researchers will assist states with developing a method for converting current income eligibility limits to MAGI-equivalents. 4 The change in the definition of household composition and the task of converting the maximum eligibility levels for various groups to their MAGI equivalents are both important topics for states that are beyond the scope of this brief. The focus here is instead on the transition issues and decision points with respect to establishing eligibility and benefits in light of federal matching dollars that states will need to consider as they envision how the people in various adult and child categories of today will be served in the new consolidated MAGI-related categories of children, pregnant women, parents and caretaker relatives, and adults of 2014. Consideration of Uninsured in 2014 Even as the ACA provides for expanded eligibility levels and the new APTC/CSR to make private insurance more affordable through the exchange, many households will remain uninsured after 2014. Although the ACA is projected to reduce the number of uninsured by assisting over 30 million people, an estimated 26 million people will still be uninsured because they will remain unable to afford coverage or access the assistance of the ACA. 5 Many of the uninsured will be exempt from the requirement to purchase coverage. Individuals will be exempt if: The cost exceeds 8 percent of their income; They are exempt from filing taxes due to low income; They are Native Americans; They are incarcerated individuals; or They are undocumented immigrants. 6 In addition, an individual who qualifies for minimum essential coverage without help from the APTC/CSR is disqualified from receiving the APTC/CSR through the exchange. Minimum essential coverage includes many public sources of coverage, and also employer-sponsored insurance (ESI) that provides a certain minimum value and is affordable. 7 The IRS s proposed interpretation of affordability could cause more people to be excluded from the APTC/CSR than first expected. The IRS had proposed that ESI be considered affordable if the contribution for the taxpayer s self-only coverage is less than 9.5 percent of household income. 8 If finally adopted, this would have effectively excluded family members from the APTC/CSR even when the taxpayer s contribution toward ESI for family (e.g., self and spouse, self and child(ren), or self, 4 See, Center for Medicare and Services, Conversion of Net Income Standards to Equivalent Modified Adjusted Gross Income Standards and Solicitation of Public Input. Retrieved June 29, 2012, http://www.medicaid.gov/state-resource-center/events-and-announcements/downloads/magi-incomeconversion.pdf. 5 Congressional Budget Office, Updated Estimates for Insurance Coverage Provisions of the Affordable Care Act, 3 (March 2012). Retrieved March 23, 2012 from http://www.cbo.gov/sites/default/files/cbofiles/attachments/03-13-coverage%20estimates.pdf. 6 ACA 1501. 7 IRS NPRM 1.36B-2(c), 76 F.R. 50940 50941. 8 IRS NPRM, 76 F.R. at 50935. 5 2014 Transition Toolkit for States

spouse and child(ren)) coverage is, in reality, unaffordable. In the final rule, the IRS left the issue open, indicating it would determine the definition of affordability for family members at a later time. 9 Both lawfully residing and undocumented immigrants are groups that will remain largely uninsured. Undocumented immigrants, in addition to being ineligible for CHIP and (except for emergency ), will not be eligible for the APTC/CSR. Undocumented immigrants will also not be able to purchase coverage at full price through the exchange. Lawfully residing immigrants will continue to be ineligible for in situations where their citizen counterparts are not. Lawfully residing immigrants are eligible to purchase coverage through the exchange and benefit from the APTC/CSR. However, the ACA did not change the requirements in or CHIP with respect to legal immigrants. Most lawfully residing low-income immigrant adults will remain subject to a 5-year waiting period for. States will continue to have the option to provide coverage to lawfully-residing pregnant women and children regardless of their date of entry into the United States. States may also use CHIP funding to provide prenatal care to pregnant women, regardless of their immigration status. Because of the denial of federally-funded for most lawful immigrants, many states provide state-funded health coverage assistance to specified immigrant populations. 16 states provide some form of completely state-funded health care to immigrants who are unable to access, with both the population covered and the benefits provided being broad or quite narrow, depending on the state. 10 In short, whether citizen or immigrant, not everyone will have access to affordable coverage through the ACA. This reality will influence state decisions on whether to retain or add optional non-magi or state-funded programs that might continue to be a critical safety net for needy individuals still unable to afford coverage in 2014. MEDICAID ELIGIBILITY ISSUES BY POPULATION CATEGORY CHILDREN, AGES 0 19 Under current law, states are required to provide coverage to children ages 0 through 5 with family income at or below 133 percent FPL, and to children ages 6 through 18 with family income no greater than 100 percent FPL. At their option, 28 states provide to infants ages 0 to 1 at income levels of 185 percent FPL or higher. 11 In addition, the option under 1902(r)(2) of Title XIX of the Social Security Act (SSA) to disregard blocks of income has effectively allowed states to increase eligibility limits for children (as well as adults) of any age up to any state-defined limit. This option will no longer be available after December 31, 2013. All states provide coverage for children above the eligibility limits using CHIP, with its enhanced federal matching dollars. CHIP is available to children under 19 in households with incomes up to a maximum standard of 200 percent FPL or 50 percentage points above the limit, whichever is higher. Under the ACA s maintenance of effort provision, states are not permitted to use standards, procedures, or methodologies that reduce eligibility for children in either CHIP or until after September 30, 2019. 12 Thereafter, children must be covered if their household income is at or below at least the minimum eligibility level described in the box below. When states shift to the MAGI methodology, children eligible for or CHIP must retain eligibility, and states must take into account existing disregards when converting current income eligibility levels into a MAGI-equivalent income standard. The minimum and maximum income standards set out below reflect the new final and CHIP eligibility rules. The standards maintain current federal minimum eligibility standards, while also maintaining until December 31, 2013 the flexibility under current authority for states to increase eligibility by disregarding income or resources. States are expected to convert the maximum eligibility levels to a MAGI-equivalent eligibility limit. 9 77 F.R. 30377, 30380 (May 23, 2012). 10 National Immigration Law Center, Table: Medical Assistance Programs for Immigrants in Various States (Update to Guide to Immigrant for Federal Programs, July 2011. Retrieved April 20, 2012, http://www.nilc.org/guideupdate.html. See also National Immigration Law Center, How are Immigrants Included in Health Care Reform? (April 2010). Retrieved April 20, 2012, http://www.nilc.org/immigrantshcr.html. 11 Statehealthfacts.org, Income Limits for Children s Regular and Children s CHIP-funded Expansions as a Percent of Federal Poverty Level (FPL), January 2012 (Kaiser Family Foundation). Retrieved April 14, 2012, http://www.statehealthfacts.org/comparereport.jsp?rep=76&cat=4. [Hereinafter, State Health Facts, Children s and CHIP Income Limits] 12 The maintenance of effort provisions from the ACA are found in the SSA 1902(gg) and 2105(d). The Supreme Court did not discuss maintenance of effort in National Federation of Independent Businesses v. Sebelius. The Court expressly limited the holding to noncompliance with the expansion and stated, Today s holding does not affect the continued application of 1396c [of Title 42 of the U.S. Code, authorizing the Secretary to withhold funding for noncompliance with law] to the existing program. (slip opinion, at 56). 6 2014 Transition Toolkit for States

ELIGIBILITY FOR MEDICAID AND CHIP CHILDREN GROUP IN 2014 (Final eligibility rule, 435.118) Minimum income level: 133% FPL or, for children 0 1, a higher amount that was less than 185% FPL and effective on December 19, 1989, or had authorizing legislation as of July 1, 1989. Maximum income level: The highest income level that was in effect on March 23, 2010 or December 31, 2013, or, for children 0 1, 185% FPL, if higher (converted to MAGI equivalent). CHIP (Final eligibility rule, 457.310) Minimum income level: Above. Maximum income level: The higher of: (1) 200% FPL, (2) 50 percentage points above the applicable income level (converted to MAGI equivalent) as of March 31, 1997, or (3) the effective income standard (converted to MAGI equivalent) in effect as of December 31, 2013. Notes Maintenance of effort applies to this group through September 30, 2019. for individuals at higher income levels (including children) may also be provided in 2014 through the new optional group described in 435.218 of the regulations. No asset or resource test applies in 2014. Considerations for Transitioning Children to 2014: Maintenance of effort Under the ACA s maintenance of effort provision, states must maintain eligibility standards for children under and CHIP until September 30, 2019. Any child who loses eligibility due to the loss of income disregards in the shift to a MAGI-equivalent income standard must be eligible in a separate CHIP plan at least through the date of the child s next renewal. 13 CMS considers premiums to be a condition of eligibility and therefore the state may not raise premiums beyond an inflation-adjustment unless it had been specifically authorized to do so under its state plan. 14 Required enrollment Under the ACA, states may not enroll parents and caretaker relatives in unless the children under 19 (or, at state option taken as of March 23, 2010, under 20 or 21) that live with them are enrolled in, CHIP or other minimum essential coverage. 15 Increased mandatory income limit for children age 6 to 19 in The rule increases the mandatory eligibility limit for children ages 6 to 19 to 133 percent FPL. Currently, 42 states cover children ages 6 to 19 with incomes above 100 percent FPL with enhanced CHIP matching dollars, either through CHIP-financed expanded programs, separate CHIP programs, or a combination of the two. 16 Under the final rule, children with incomes between 100 percent and 133 percent FPL in separate CHIP programs must be shifted to the program. The enhanced CHIP match will remain available for these children. 19 and 20 year-old young adults Under current law states must provide coverage to children until they turn 19, but have the option to provide coverage to young adults up to ages 20 or 21. This existing option does not change in 2014. However, under the maintenance of effort provisions discussed above, states that elected to cover 19 and 20 year-old young adults will be required to continue to cover them in the children s category until September 30, 2019. 17 In states that did not elect to cover 19 and 20 year-olds, these young people would be covered as part of the new adult group and be counted toward the enhanced Federal Medical Assistance Percentage (FMAP) for the newly eligible. Former foster children covered States are currently required to provide to children in foster care or to those receiving adoption assistance under Title IV-E of the SSA until they turn age 18. 18 states have opted for a Foster Care Transition Program to 13 Final eligibility rule, 457.310(d). 14 Details on the restriction on premium increases because of maintenance of effort are set out in CMS s State Director Letter, SMDL # 11-001, Questions 13 14 (February 25, 2011). Retrieved April 12, 2012, http://www.cms.gov/smdl/downloads/smd11001.pdf. 15 42 CFR 435.119(c); SSA, 1902(k)(3)). 16 State Health Facts, Children s and CHIP Income Limits. 17 SSA 1902(gg)(2). 7 2014 Transition Toolkit for States

continue eligibility for children who have aged out of foster care until they turn 19, 20 or 21. 18 Under the ACA, after 2014 states will be required to provide full, including Early Periodic Screening, Diagnosis and Treatment (EPSDT) to former foster children who were receiving at the time they aged out of foster care, until they are 26 years old. 19 They will be treated as non-magi because they will not need an income determination. Categorical and Section 1931 eligibility Children who are categorically eligible for and not subject to a financial eligibility determination, for example because they receive Supplemental Security Income (SSI), are in foster care, or receive adoption assistance, will not shift to a MAGI determination. They will continue to be categorically eligible and not be subject to a separate income determination. Children eligible under 1931 of Title XIX (children in families who would have met the state s July 1996 AFDC-related eligibility criteria) and their parents will shift to a MAGI determination. PREGNANT WOMEN Under current law, states are required to provide benefits to pregnant women (including 60 days postpartum) with family incomes at or below 133 percent FPL. However, 36 states provide, at their option, to pregnant women with incomes up to 185 percent FPL or higher. 20 Currently, states are required to provide full benefits only to those women with family incomes up to historic AFDC eligibility levels. For women with incomes between that level and 133 percent FPL or the optional higher income standard the state adopts, states are only required to cover pregnancy-related. Further, pregnant women are excluded from the new adult group under the ACA and therefore unable to access those benchmark benefits. As a result, there is concern that -eligible pregnant women could be left with less generous benefits than those in the new adult group. In the preamble to the final rule, CMS responded to this concern by clarifying that pregnancy-related as defined in 440.210(a)(2) must include for conditions that might complicate a pregnancy. The ACA statute preserves states flexibility to provide either full or pregnancy-related under 42 CFR 440.210(a)(2) and 440.250(p). 21 However, if a state chooses to deny coverage for a service to pregnant women that the state covers for other adults, CMS will require an explanation of the basis of that decision when reviewing a state plan amendment submitted for the Secretary s approval. 22 ELIGIBILITY FOR MEDICAID PREGNANT WOMEN GROUP IN 2014 For (Final eligibility rule, 435.116(d)(4)) Minimum income level: The AFDC income standard in effect as of May 1, 1988. Maximum income level: The highest income level that was in effect for pregnant women on March 23, 2010 or December 31, 2013, if higher, converted to MAGI-equivalent. For Pregnancy-Related Services (Final eligibility rule, 435.116(c)) Minimum income level: 133% FPL or such higher income standard up to 185 percent FPL, if any, as the State had established as of December 19, 1989... or, as of July 1, 1989, had authorizing legislation to do so. 435.116(c)(1) Maximum income level: The higher of: 185% FPL or the highest income level that was in effect for pregnant women on March 23, 2010 or December 31, 2013, if higher, converted to MAGI-equivalent. Notes Pregnancy-related include those and for other conditions that might complicate the pregnancy, 42 CFR 440.210(2). In the preamble to the final rule, CMS stated that given how intertwined the health of the mother is with her expected child, [i]f a State proposes not to cover certain or items for pregnant women that it covers for other adults, the State must describe in a State plan amendment its basis for determining that such are not pregnancy-related. (77 F.R. at 17149) Maintenance of effort applies to pregnant women through December 31, 2013. However, in the case of pregnant women covered by CHIP through eligibility for their unborn child, it is likely that the maintenance of effort provision for children would apply through September 30, 2019. 18 Sonya Schwartz and Melanie Glascock, Improving Access to Health Coverage for Transitional Youth (Portland, ME: National Academy for State Healthy Policy, 2008), 9. Retrieved April 12, 2012, http://www.nashp.org/sites/default/files/transitional_youth.pdf. 19 SSA 1902(a)(10)(A)(i)(IX). 20 Statehealthfacts.org, Income Limits for Pregnant Women as Percent of Federal Poverty Level (FPL), January 2012, (Kaiser Family Foundation). Retrieved April 13, 2012, http://www.statehealthfacts.org/comparereport.jsp?rep=77&cat=4. 21 42 CFR 440.250(p) permits states to provide for pregnant women that are greater in amount, duration or scope than for the rest of those on population. 22 77 F.R. at 17148-49. 8 2014 Transition Toolkit for States

Transitional Considerations for Pregnant Women: Flexibility to increase eligibility income limit States may establish higher eligibility levels for pregnant women for either full or for pregnancyrelated by obtaining a state plan amendment (SPA) before December 31, 2013 that increases disregards for the household. This expansion would be financed at the state s regular FMAP rate. Coverage for pregnant women under CHIP States that provided coverage on March 23, 2010 for some pregnant women through the CHIP program s unborn child option would likely be required to continue that option until September 30, 2019 under the maintenance of effort requirement. States that do not provide CHIP coverage for pregnant women will continue to have that option for the future. 23 Impact on other eligibility groups The income standard a state chooses for pregnant women will affect other eligibility groups. The highest income level for the pregnant women group also sets the income eligibility standard for the family planning option. In addition, the level established for the pregnant women group will also affect the number of newborns that will be covered for their first 12 months, although most infants born to eligible pregnant women would likely be covered under the state s or CHIP programs in any event. Decision Points: Determine how to count pregnant women in household composition When determining eligibility for a pregnant woman, a state must count the pregnant woman plus her expected child(ren) in determining the household size. By contrast, when determining eligibility for a person in the pregnant woman s household, a state has the option to count the pregnant woman as either one person, two people, or herself plus the number of children she is expected to deliver. This was clarified in the final rule at 435.603(b). Determine new eligibility standards and benefit packages for pregnant women While states are required to establish eligibility for full benefits for pregnant women below the historic AFDC level, states will want to consider coverage and benefit options for pregnant women with incomes above that limit. In considering the seven options below, note that Essential Health have been defined to include maternity and newborn care, and thus these benefits would be included in all of the options. 24 These options would likely be used in some combination based on a state s circumstances and policy decisions. 1. benefits. States have the option to provide full benefits to pregnant women up to any statedefined limit by disregarding blocks of income. If a state wishes to increase the income standard for full benefits for pregnant women, it may have to do so with a state plan amendment before December 31, 2013, after which it will no longer be able to implement disregards of income. 2. Pregnancy-related benefits. States may offer pregnancy-related to pregnant women in the pregnant women group with incomes up to a level higher than the full income limit. In this case, the state would need to specify the income limits for both levels of benefits. As with increasing the income limit for full benefits, if a state wishes to increase the income standard for pregnancy-related benefits, it would likely have to do so with a state plan amendment before December 31, 2013. 3. Optional group. States may include pregnant women in the new optional group for those with incomes above 133 percent FPL. 4. Basic Health Program. States may include pregnant women in the state s Basic Health Program (BHP), if any, for those with incomes up to 200 percent FPL. 5. Subsidized exchange coverage. Pregnant women with incomes above (or BHP) levels could be left to access the exchange to purchase private coverage subsidized by the appropriate APTC/CSR. 6. Medically needy program. States may maintain a medically needy program for pregnant women who are ineligible for and unable to afford other coverage; this program would use non-magi income methodology. 7. CHIP coverage option for pregnant women. States may cover through CHIP the unborn child of pregnant women who are not eligible for due to non-financial criteria. 23 For more information on this option, see, J. Garner, State Health Official Letter, SHO # 09-006 (Center for and State Operations, May 11, 2009). Retrieved April 9, 2012 from http://downloads.cms.gov/cmsgov/archived-downloads/smdl/downloads/sho051109.pdf. 24 Center for Consumer Information and Insurance Oversight, Essential Health Bulletin, (December 16, 2011). Retrieved March 22, 2012 from http://cciio.cms.gov/resources/files/files2/12162011/essential_health_benefits_bulletin.pdf. 9 2014 Transition Toolkit for States

The above options would combine for pregnant women. For example, a state might provide full for pregnant women up to 200 percent FPL, then provide pregnancy-related coverage through the pregnant women group for those who have incomes up to a higher state-defined level. Alternatively, a state that adopts the BHP, might provide full for pregnant women with incomes at or below 133 percent FPL and the BHP for those with incomes up to 200 percent FPL. In this scenario, the APTC/CSR would be available to eligible women above 200 percent. While there are many options in structuring benefits for pregnant women, in any scenario a medically needy program could be available for women who are unable to afford employer-sponsored insurance or insurance through the exchange. Likewise, the CHIP option could be available for those pregnant women who do not meet the non-financial criteria for. PARENTS AND CARETAKER RELATIVES The new parent and caretaker relative group will serve individuals that states currently cover as 1931 parents and caretaker relatives (parents and caretaker relatives in families who would have met the state s July 1996 AFDC-related eligibility criteria). Other parents and caretaker relatives with incomes above current 1931 limits but below 133 percent FPL will go into the adult group. In addition, the ACA retains the existing law on the Transitional Medical Assistance (TMA) and medically needy programs which are discussed at greater length below. Currently, states must provide full to parents and caretaker relatives with household incomes up to the 1996 AFDC income eligibility levels; the ACA does not change this requirement. States also have had the option to disregard blocks of income under both 1931 and 1902(r)(2) of Title XIX in order to provide to parents and caretakers at higher income levels. Presently, states vary widely on the extent to which covers parents and caretaker relatives. Although 12 states currently provide coverage to parents and caretaker relatives in households with incomes above 133 percent FPL, 15 states limit eligibility to below 100 percent FPL, and seven of these have limits below 50 percent FPL. 25 Although the ACA will result in many parents and caretaker relatives with incomes under 133 percent FPL receiving coverage for the first time, these individuals will be covered in the adult group, and states will have the option to provide a benchmark benefit package rather than full. Other parent and caretaker relatives that states currently cover, such as those covered under an 1115 waiver program, will also go into the adult group. The adult group is discussed in detail in the next section. Current federal law requires states to provide TMA to parents, caretakers and their children for at least 6 months after eligibility for under 1931 is lost due to an increase in earnings or loss of disregards. States have the option of extending TMA for an additional 6 months for those with incomes below 185 percent FPL. The current authorization for this six or 12 month extension expires December 31, 2012, and its future is unclear. Even if allowed to expire, a permanent transitional provision would remain, providing four months of transitional for those who lose eligibility due to increased child or spousal support or due to increased earnings. 26 Further considerations regarding TMA are discussed below. Finally, the ACA left intact current law that parents and caretaker relatives who are over-income for may still become eligible under the optional medically needy program if they have high medical bills and spend down to a protected income level. The final rule made it clear that participation in the medically needy program does not disqualify an individual from enrolling in an optional program, should the state create one. 27 States should also note that medically needy groups will continue to use a non-magi income methodology. 25 Statehealthfacts.org, Income Limits for Working Adults at Application as a Percent of the Federal Poverty Level (FPL) by scope of Benefit Package, January 2012 (Kaiser Family Foundation). Retrieved March 19, 2012, http://www.statehealthfacts.org/comparereport.jsp?rep=54&cat=4. 26 SSA 1902(e) provides for the four months of transitional ; whereas 1925, the authorization for which is set to expire, provides for the 6 to 12 months of TMA. 27 See preamble to final eligibility rule, 77 F.R. at 17147. 10 2014 Transition Toolkit for States

ELIGIBILITY FOR MEDICAID PARENT AND CARETAKER RELATIVES GROUP IN 2014 (Final eligibility rule, 435.110(c)) Minimum income level: The AFDC income standard in effect as of May 1, 1988. Maximum income level: The highest of: The income level (taking into account disregards) that was in effect for 1931 families on March 23, 2010 or December 31, 2013, if higher, converted to a MAGI equivalent standard, or The state s July 16, 1996 AFDC income standard increased by no more than the percentage increase in the Consumer Price Index for all urban consumers between July 16, 1996 and the effective date of such increase. Notes Parents or caretaker relatives above the income level established in the state according to the rules above but at or below 133% FPL will qualify for the new adult group and count toward the state s enhanced FMAP if they are newly eligible. States may also provide to those above 133% FPL (or above the state standard, if higher than 133% FPL) by including them in the Optional group described in the eligibility rule at 435.218. Transitional Considerations for Parents and Caretaker Relatives: eligibility for adults at or below 133 Percent FPL Parents and caretaker relatives with incomes below 133 percent FPL but above the maximum limit of the parent and caretaker relative group will be eligible for in the new adult group. Those that are newly eligible would be part of the calculation in determining the enhanced FMAP the state will receive for those who are newly eligible. Transitional Medical Assistance (TMA) CMS has indicated it will address TMA in future guidance. Current reauthorization for TMA (which was included in the recent payroll tax cut bill) is scheduled to sunset December 31, 2012. The distinction between TMA and other coverage in 2014 could affect the benefits families receive, because states must offer full benefits under TMA but may opt for lesser benchmark benefits under other categories, such as the adult group. States should also consider that fewer people may be eligible for TMA after 2014, because the ACA s new MAGI income calculation excludes child support payments from being counted as income and disallows the use of earned income disregards. As a result, no TMA would be associated with these factors after January 1, 2014. Given these circumstances and the fact that TMA has not yet been addressed by CMS, it remains unclear how TMA eligibility will play out in a post-2014 eligibility environment. Caretaker relatives age 65 and over The final rule clarified that the exemption from MAGI for those age 65 and over applies only when age is a condition of eligibility. This means that states must use MAGI in determining eligibility for caretaker relatives age 65 and over if they are eligible as a caretaker relative. This avoids having to use the old AFDC methodology for this small subset of people. If the person later becomes ineligible as a caretaker, eligibility would then be reconsidered under age-based eligibility methodology. 28 Decision Points: Determine the definition of caretaker relative The final rule at 435.4 specifies the degree of relation to the child that defines the caretaker relative, and provides states the option of including additional relatives, the domestic partner of the parent or caretaker relative, or other adults taking primary responsibility for the child. States may want to consider revisiting current definitions of caretaker relatives for to promote consistency with other laws relating to private insurance coverage or to promote other policies, including supporting extended family members who raise children, marriage equity, or other goals. Decide whether to eliminate deprivation standard in the definition of dependent child Any state that has not already eliminated the requirement that eligible parents be taking care of children deprived of parental support or care due to unemployment, incapacity, death or continued absence, may wish to consider doing so. Under current law, state programs may require that children meet this deprivation standard if their parents are to be determined 28 Final eligibility rule, 435.603(j); see also the preamble to the final eligibility rule, 77 F.R. at 17157-58. 11 2014 Transition Toolkit for States

eligible for coverage. In those states, a determination that a child is not deprived of parental support or care may prevent a parent from being eligible for entirely. Under the ACA in 2014, whether or not a parent meets the deprivation standard may only impact whether the parent falls in the parent group or the adult group. This raises the question whether the administrative burden to states of determining deprivation outweighs the benefit. Both CMS and states will want to consider the FMAP consequences of eliminating the deprivation requirement, where the parents could be newly eligible, but technically fall in the parent s group. States will also want to account for the potentially different benefit package in the parent group compared to the adult group. Determine coverage options for parents and caretaker relatives above 133 Percent FPL Parents and caretaker relatives will be required to enroll their children and themselves into some form of minimum essential coverage, unless they are otherwise exempt from that requirement. States could consider the same options for this group as for other adults above 133 percent FPL, as discussed in the next section. OTHER ADULTS Under current law, other adults under 65 might receive benefits through various pathways: under a 1115 waiver, a family planning waiver or option, the breast and cervical cancer program, or the option to provide limited benefits to people with tuberculosis. In 2011, using 1115 waivers, eight states provided full benefits to childless adults, and 17 states provided more limited benefits to childless adults. However, in six of the latter states, enrollment was closed. 29 As of March 1, 2012, 22 states provide family planning under a 1115 waiver and seven states provide family planning through a state plan amendment using the new option under 2303 of the ACA. Nineteen states cover family planning for individuals under age 19, and 13 states provide family planning to men as well as women. 30 Family planning and supplies are covered at a 90 percent FMAP rate. 31 All 50 states provide under the Breast and Cervical Cancer program. 32 Under this program, people without insurance who are screened for breast and cervical cancer through a CDC-funded program and who require treatment are eligible for. CDC-funded screening is limited to women at or below 250 percent FPL. CDC screens women ages 18 to 64 for cervical cancer and ages 40 to 64 for breast cancer. States also have the option to enroll people infected with tuberculosis in using the same income and resource standards as for people with disabilities. CMS recently issued a bulletin encouraging states to adopt this option. 33 MEDICAID ELIGIBILITY FOR ADULT GROUP IN 2014 Minimum income level: 133% FPL. (Final eligibility rule, 435.119) Maximum income level (Optional group): Established by state. (Final eligibility rule, 435.218(b)(iv)) Maximum income level (Family Planning option): No higher than for pregnant women. (SSA 1902(ii)) Maximum income level (Breast and Cervical Cancer Program): 250% FPL set by CDC for screening; no income determination needed by. (SSA 1902(aa)) Note Maintenance of effort applies through December 31, 2013. There is an exception to maintenance of effort if the state certifies a budget deficit for non-pregnant, non-disabled adults with incomes above 133% FPL. 29 M. Heberlain, T. Brooks, J. Guyer, S. Artiga, and J. Stephens, Performing Under Pressure: Annual Findings of a 50-State Survey of, Enrollment, Renewal, and Cost-Sharing Policies in and CHIP, 12 (Kaiser Commission on and the Uninsured, January 2012). 30 Guttmacher Institute, Family Planning Expansions, (as of March 1, 2012). Retrieved March 20, 2012 from http://www.guttmacher.org/statecenter/spibs/spib_smfpe.pdf. 31 See C. Mann, Family Planning Services Option and New Benefit Rules for Benchmark Plans, State Health Official Letter, July 2, 2010. 32 Statehealthfacts.org, Breast and Cervical Cancer Treatment Coverage Expansions, 2002, (Kaiser Family Foundation). Retrieved April 30, 2012, http://www.statehealthfacts.org/comparetable.jsp?ind=457&cat=10&sub=109. 33 C. Mann, State Option to Enroll Tuberculosis (TB) Infected Individuals into the Program, CMCS Informational Bulletin (June 16, 2011). 12 2014 Transition Toolkit for States

Transitional Considerations for Adults: Adult eligibility and enhanced FMAP Adults under 65 who are not pregnant, not eligible under another mandatory eligibility group, not eligible for Medicare, and have household incomes at or below 133 percent FPL will be eligible for at least benchmark coverage in in the new adult group. 34 Under the ACA, states will receive an enhanced FMAP of 100 percent through 2016, then phasing down to 90 percent in 2020, for newly eligible individuals in the adult group. Newly eligible refers to those individuals who would not have been eligible for at least benchmark under state standards in effect on December 1, 2009. The adult group will include childless adults, parents not eligible in the parent group, and, in some instances, people with disabilities. People with disabilities who have indicated on an application or otherwise requested inclusion in a non-magi category must be enrolled promptly and may be placed in the adult group until they have been evaluated for the non-magi category and shifted to that group if eligible. 35 The standard for newly eligible and enhanced FMAP CMS has deferred issuing a final rule on how it will calculate FMAP for the newly eligible in 2014 as it awaits the results of a study on converting to MAGI involving researchers and 10 participating states. Some have been uncertain because of language (now withdrawn) from the proposed rule about whether the calculation will include an enhanced FMAP for adult populations who are currently eligible for a limited benefit in their states, but will be eligible in the new adult group in 2014. In general, the ACA is clear that states should consider as newly eligible in 2014 those in the adult group who would not have been eligible for at least benchmark or benchmark equivalent coverage in using state eligibility standards in effect on December 1, 2009. 36 Benchmark benefits must include at least the 10 benefit categories listed as Essential Health under 1302(b)(1) of the ACA, including (1) ambulatory patient, (2) emergency, (3) hospitalization, (4) maternity and newborn care, (5) mental health and substance use disorder, including behavioral health treatment, (6) prescription drugs, (7) rehabilitative and habilitative and devices, (8) laboratory, (9) preventative and wellness and chronic disease management, and (10) pediatric, including oral and vision care. 37 Thus, adults who would have been eligible for only family planning or for a limited benefit under a waiver that does not include essential health benefits should be included in enhanced FMAP calculations. Implications for the breast and cervical cancer program People without insurance screened for breast and cervical cancer through a CDC-funded program and who require treatment are eligible for at state option. As of 2002, 50 states had opted to provide a Breast and Cervical Cancer Program (BCCP), and 23 states allowed screening by both CDC and non-cdc providers. 38 Applicants for coverage with incomes at or below 133 percent FPL who might otherwise fall in this category will be eligible for the adult group. The availability of new adult and other insurance options for higher-income adults will likely reduce the enrollment in the BCCP. Those who are eligible for both the adult group and the BCCP because they need treatment should be informed of the differences in benefits (if any) between the 2 eligibility categories so that they are able to access the treatment needed. 39 In addition, the BCCP would remain important for those who are found to need treatment after a screening but who, even after 2014, remain uninsured. Decision Points: Determine future of adults now covered at or below 133 Percent FPL States that currently have a 1115 waiver or a fully state-funded program to cover adults not otherwise eligible for with incomes at or below 133 percent FPL will need to make decisions about the transition of these adults in 2014 to the adult group. As indicated above, if individuals were eligible for at least benchmark coverage on December 1, 2009 in, they will not count as newly eligible for the purpose of calculating the enhanced FMAP. 40 However, if the state s 34 SSA 1902(a)(10)(A)(i)(VIII). 35 The process of determining eligibility category for an individual who is eligible under MAGI and may also be eligible under another non-magi category is set out in the final rule at 435.911 and discussed in the preamble at 77 F.R. at 17166 17170. 36 SSA 1902(a)(10)(A)(i)(VIII), 1905(y)). 37 ACA 1302. See generally, Center for Consumer Information and Insurance Oversight, Essential Health Bulletin, (December 16, 2011). 38 Statehealthfacts.org, Breast and Cervical Cancer Treatment Coverage Expansions, 2002 (Kaiser Family Foundation). Retrieved April 27, 2012, http://statehealthfacts.org/comparetable.jsp?ind=457&cat=10. 39 Final Rule, 435.905. See also, the preamble to the Final Rule, 77 F.R. at 17167, indicating that information provided must be sufficient to allow applicants and beneficiaries to make an informed decision. 40 If the state has been providing coverage to all adults, statewide, with incomes up to 100% of the poverty level, the state may be considered an expansion state and subject to a different FMAP scenario that transitions them to enhanced FMAP for childless adults. Expansion states include Arizona, Delaware, Hawaii, Maine, Massachusetts, New York, and Vermont. R.R. Bovbjerg, B.A. Ormond, and V. Chen, State Budgets under Federal Health Reform: The Extent and Causes of Variations in Estimated Impacts, ii (Kaiser Commission on and the Uninsured, February 2011) (Maine s status may be unclear due to the state s limited benefit package.) 13 2014 Transition Toolkit for States

waiver program offered a more limited benefit to adults under 133 percent FPL, or if these adults were covered by a wholly state-funded program, they would count as eligible for the 100 percent match in 2014. States with state-funded programs covering particular groups will need to carefully compare the eligibility requirements of the new adult group to that of their state program and determine who will remain ineligible for coverage in 2014. These states may want to restructure the state program to maximize coverage in the adult group (thereby maximizing the federal matching funds received) while not inadvertently causing people in the state-funded program who are ineligible for to lose coverage. States covering adults with a 1115 waiver may want to consider amending or renewing their waiver in a manner that would allow the state to shift this group of enrollees to the adult group using the MAGI methodology before 2014. This could allow the state to test systems on a smaller, identified group that is already known to the state. In addition, having this population properly in place in advance of 2014 will allow the state to focus on transitioning other groups and serving new applicants. CMS has indicated it would look favorably upon 1115 waivers that would convert the methodology to MAGI before 2014. 41 Determine options for covering adults above 133 percent FPL States have a number of options for covering adults with incomes greater than 133 percent FPL, including: 1. Optional expansion coverage group. States may provide optional coverage under SSA 1902(a)(10)(A)(ii)(XX) for those with income greater than 133 percent FPL. The income eligibility limit would be established by the state, because there is no upper limit imposed by law. 42 The FMAP for this coverage would be the state s regular FMAP. 2. Basic Health Program. States may create and operate a BHP to provide at least essential health benefits to those with incomes between 133 percent and 200 percent FPL. Federal funding would be approximately 95 percent of the value of premium tax credits and reduced that would have been available to those individuals in the exchange. 3. No formal coverage option. Rather than establishing a state alternative, states may leave adults to purchase health insurance through their employer or through the exchange if they are able. Determine structure of family planning waiver or option States covering family planning through either a waiver or state plan amendment may want to consider restructuring eligibility. Individuals now receiving these with incomes at or below 133 percent FPL will be eligible under the new adult group in 2014. This may allow states to consider increasing the income eligibility standard or expanding the benefits available under a family planning waiver or option for those who remain uninsured after 2014. States will also want to decide whether to continue or renew their waiver or convert to the family planning option under the ACA. The option permits states to use the same income methodology for the family planning option as it uses for pregnant women, including counting the woman as two people in determining household size. for the family planning option may not exceed the income level the state has established for pregnant women. Under the option, states may not restrict eligibility based on age or gender, although in practice some may be limited based on medical necessity. Presumptive eligibility is also available for this group. If a state chooses to continue its family planning waiver, CMS has indicated that cost neutrality may need amendment and renegotiation. 43 ADDITIONAL CONSIDERATIONS In addition to the issues discussed in this brief, states will consider many other factors in preparing for the transition to 2014. This memo does not purport to consider them all, and most notably, does not address the changes in FMAP methodology or changes in income and household composition rules that apply under MAGI. However a few additional matters that policy makers and administrators might consider in transitioning MAGI-related eligibility groups to 2014 are highlighted below. Express Lane as a Tool for Simplifying the Transition Express Lane (ELE) permits states to borrow the eligibility determination of another designated Express Lane agency to determine eligibility for and CHIP for children. 44 Under the ACA, states are exempt from using the 41 See, e.g., CMS s comment in the NPRM, 76 F.R. at 51155. 42 See the final rule, 435.218. 43 CMS, State Health Official Letter, SMDL 10-013, 5. (July 2, 2010). Retrieved April 20, 2012, http://downloads.cms.gov/cmsgov/archiveddownloads/smdl/downloads/smd10013.pdf. This letter also provides a good description of which are eligible for the 90% match for family planning. 44 SSA 1902(e)(13) provides the authority for ELE. SSA 1902(e)(14)(D)(ii) exempts those found eligible through ELE from the MAGI-related eligibility determination. State Health Official Letter # 10-003 (February 4, 2010) provides states guidance on implementation of ELE. Many resources on ELE and e- 14 2014 Transition Toolkit for States

MAGI methodology for individuals determined eligible through the ELE methodology. Thus states may use a trusted determination, such as SNAP eligibility, as a proxy for a determination to quickly and simply enroll people in 2014. Although authorization for ELE appears to expire on September 30, 2013, there are indications it may continue to be an option for states into the future for children and adults. First, the statutory reference to ELE as an exception to MAGI implies an intent that ELE programs will remain in effect in 2014 and beyond. Second, CMS indicated in the preamble to the final eligibility rule openness to receiving 1115 waivers to permit ELE for adults. CMS has recently granted one such waiver to Massachusetts to use ELE for renewing eligibility of parents as well as children. 45 Some states, like Alabama and South Carolina, are currently implementing ELE for renewals. Louisiana has had positive experiences with automated enrollment of children using ELE. Other states, like New York, are proposing to allow and CHIP agencies to be considered ELE agencies and plan to borrow income determination findings from either program to smooth transitions in coverage from one program to another when eligibility status changes. When considering ELE, states will want to think through a full range of policy options to determine the best choice given the state s unique policy goals and circumstances. A review of available enrollment data, identifying those in the potential Express Lane program who, although likely eligible, are not enrolled in, should be a part of states cost-benefit analysis in assessing ELE as an option. Even if applied to children only, ELE promises to make the application, eligibility, renewal and enrollment process easier for families with children and reduce the ongoing workload of eligibility workers. Relationship to Other Programs Aside from ELE, states are discussing using SNAP and other human service program information to expeditiously enroll many people into. Many states today use multi-benefit applications so that a person who initially approached the agency for SNAP could apply for TANF and with the same application. The preamble to the final eligibility regulations makes it clear that multi-benefit applications remain permissible in 2014, and would have to be approved by the Secretary of HHS pursuant to 435.907(b)(2) of the Rule as a state-developed alternative application. CMS stated it would look forward to working with states in developing such applications. 46 Assuring that SNAP and TANF application and renewal forms can also be treated as applications may allow for a streamlined process for many newly eligible adults even in states where ELE is not an option. This would reduce the state or exchange s workload associated with enrolling newly eligible adults for January 1, 2014 benefits. In addition to shared applications, the state s SNAP or other program data will also be an important resource for identifying, informing, and verifying eligibility information for individuals who are likely eligible for. Presumptive Under current law, a state may allow qualified entities, as defined by the state, to determine presumptive eligibility for children, pregnant women, people needing treatment for breast or cervical cancer and for the family planning waiver program. Presumptive eligibility provides temporary coverage until the person has applied and had his or her eligibility fully determined. Under the ACA, if a state has opted to provide presumptive eligibility for pregnant women or children, it may also choose to provide presumptive eligibility for the new adult group and for families who receive under 1931 of the SSA (the families who would have been eligible under the old AFDC rules). 47 In addition, in 2014 hospitals will be able to elect to determine presumptive eligibility for in the same manner presumptive eligibility is implemented today, regardless of whether the state elects presumptive eligibility for any particular population. 48 Presumptive eligibility will be the subject of future CMS guidance. However, it is reasonable to expect that every state will need to have a system for presumptive eligibility in place at least for hospitals. States with presumptive eligibility in place will need to decide how to modify its system and what procedures will be needed to ensure it results in streamlined enrollment of those eligible. States with no presumptive eligibility system in place will need to begin considering how to put it in place for hospitals and watch for future CMS guidance. enrollment are available on the website of the Children s Partnership: http://www.childrenspartnership.org//am/template.cfm?section=express_lane_1&template=/taggedpage/taggedpagedisplay.cfm&tplid=148&contentid=12 069. A case study of Louisiana s experience with automatic enrollment and ELE is also available, S. Dorn, I. Hill, and F. Adams, Louisiana Breaks New Ground: The Nation s First Use of Automatic Enrollment through Express Lane, (Urban Institute, February 2012). 45 See the suggestion to use an 1115 waiver for ELE in the preamble to the final eligibility rule, 77 F.R. at 17171. 46 77 F.R. at 17163. 47 ACA 2001(a)(4). 48 ACA 2202. 15 2014 Transition Toolkit for States

CONCLUSION This issue brief and toolkit put forth an array of transitional considerations and decision points that states must weigh as they transition long-standing structures to the simplified MAGI structure of 2014. By mapping current categories to the four new MAGI categories, many changes in income limits, benefit options, and federal match become apparent. As the issue brief and toolkit highlight, such mapping is an efficient and systematic way for states to spot issues moving forward. The considerations laid out in this brief only scratch the surface of the many issues that states must analyze. States still await key guidance that will direct further analysis. Chief among the outstanding issues is the final rule regarding the calculation of the enhanced FMAP for newly eligible individuals in the adult group. This guidance will be issued after CMS receives the findings of researchers and the 10 states that are studying potential conversion methods and policies. Final guidance has already been issued on other notable financial eligibility issues such as household composition, budgeting periods, and verification. While beyond the scope of this toolkit, states must think through these issues in planning for their transitions to 2014. In addition, states should consider eligibility tools such as Express Lane and Presumptive that could make a smoother transition for both beneficiaries and state agencies. As states plan their transitions, they will undoubtedly spot additional issues specific to their own circumstances that may affect other states as well. As these issues arise, states could communicate to each other and to CMS their concerns and ideas for ways to make the transition easier. 16 2014 Transition Toolkit for States

Instructions for Using the Transition Matrix These instructions describe how to use the transition matrix as a tool for spotting issues your state will face as it converts from its current medical assistance programs to 2014. STEP I. CREATE 2012 BASELINE 1) Download the 2014 Transition Toolkit for States_Blank Matrix Template.xlsx file * NOTE: You will notice that the blank matrix already has some information filled in. Some of the information in the detailed Standards, and columns (have been filled in since that information applies to all states. In the Categories columns (Columns A and H), we have listed the most common possible options today and in 2014; you may need to delete some of these rows if the option does not apply to your state. You may also need to add extra rows in Columns A or H if your state has more current or future options for a category than the template accommodates. 2) List each of the state s current medical assistance eligibility categories that will be affected by MAGI (i.e., exclude those categories tied to being 65 or over, being disabled or needing long term and supports or other non- MAGI status) 49, as entries in Column A, Current law (2012), of the appropriate tab. The four tabs are: Children; Parents and Caretaker Relatives; Pregnant Women; and Other Adults. 3) In the row for each 2012, enter current, state-specific information under Standards, and (Columns B-G). In these columns you should fill out: Standards: o Income (% of FPL) and Asset Limit: Indicate the income limit for the category, along with any other limits on age, assets, Be aware that the 2012 and 2014 percents of FPL are not directly comparable because many states currently use significant disregards, and in 2014 all states will be required to use a flat 5 percentage point disregard. You do not need to figure out this conversion in order to complete the matrix. o Presumptive : Indicate whether the state uses presumptive eligibility to determine eligibility for this category (YES/NO/in specific circumstances). : o Program: Indicate the program from which the category is funded (i.e.,, CHIP, other). o FMAP: Indicate the federal match the state receives for this program. : o Benefit Plan Type(s): Indicate whether this group is served through a fee-for-service claim system, a managed care system, an Accountable Care Organization (ACO) or other arrangement. If there is more than one benefit arrangement, indicate that distinction in the cell. o Services: Indicate the available to this category, such as EPSDT, full, a benchmark package more limited than, tied to a specific condition (i.e., family planning-related only), 4) Note that in each tab, a row has already been filled out for Not Currently Eligible for. If your state already covers this group in a state program, you will need to delete our pre-filled information and add your state s information in that row. 49 Although this toolkit does not address non-magi aged, blind and disabled groups, states with eligibility limits for aged, blind or disabled groups under 133 percent FPL will likely need to calculate a MAGI conversion for these groups, to determine which beneficiaries will fall in the adult group with enhanced federal match, rather than the non-magi group. 17 2014 Transition Toolkit for States

STEP II. LAY OUT 2014 OPTIONS Reading across from the 2012 categories, fill in the rows extending from Column H, 2014, corresponding to the possible options post-2014. Column H is pre-filled with required and optional 2014 categories for each group; you may need to add or delete options based on your state s situation. As you make decisions you may want to add or delete options based on the 2014 scenario you are considering. The following series of questions will help: Which of the 2014 categories in Column H are required and which are options the state would like to include? (You can delete or strike-out non-mandatory options your state decides against) Within the parameters of the minimum and maximum allowed eligibility levels for each 2014 category, what eligibility level will the state choose for each category? Will the state use presumptive eligibility for the category? What of health plan will the state choose for the category? What benefits and will the state cover for the category? STEP III. SYSTEMATICALLY SPOT ISSUES AND DECISION POINTS 1) For each 2014 option, compare differences and similarities in eligibility standards, funding and benefits between the current cells and the 2014 cells. 2) In Column O, Notes, Issues, and Decision Points, lay out the range of issues the state will face based on any similarities and differences you spotted in step one. Transition issues: What are the implications of changes for consumers, the state or providers? For example, does the benefit plan change? Will the cost-burden increase or decrease for consumers, the state or providers? How will decisions affect various risk pools? How administratively simple or complex will the transition to a particular option be for the state, health plans and enrollees? Decision points: Where do multiple parallel options exist on which the state must make a decision? What are the possible combinations of choices and their implications? Tracking issues: Where does uncertainty remain in federal and state requirements, and what information should the state monitor to determine how and when this uncertainty will be resolved? Notes: Are there additional issues that you identify? 3) Look for similarities and patterns across the 2012 categories and across tabs. 4) Refer to the Issue Brief for further analysis of specific issues and decision points, broken down by eligibility group. 5) Refer to the ACA statute and CMS rule to resolve outstanding questions. 6) Refer to the Additional Considerations section in the Issue Brief to spot more transition considerations beyond the issues highlighted by the worksheet. 7) Consider other transition issues not analyzed in this toolkit, including household composition changes and FMAP methodology, referring to additional analyses (such as the forthcoming RAND/SHADAC analysis for the newly eligible FMAP and MAGI conversion of income limits), the statute and the eligibility rule. 18 2014 Transition Toolkit for States

Example Matrix (State A eligibility crosswalk) - Children (Not disabled, under 19) SAMPLE: State "A," State and Federal Health Coverage Programs, 2012 and 2014 Categories -- Children (Not disabled, under 19)* Current Law (2012) 2014 1931 Group ( 001) Newborns of eligible mothers ( 005) Children's 0-1 ( 022) Children's 1-6 ( 022) Children's 6-19 ( 022) CHIP ages 0-6 ( 135) CHIP ages 6-19 ( 135) Standards (AFDC Income Methodology) Income (% of FPL) Asset limit <39% Asset limit: $4,000 Children ages 0-1 with income <185% FPL Children ages 6-19 with income <100% FPL Children ages 6-19 with income >100% FPL (above ) but <200% FPL Presumptive NO Program 1 FMAP (FY 2012) 62.23% YES CHIP 72.40% MCO YES 62.23% MCO YES 62.23% MCO MCO (separate plan) with EPSDT with EPSDT with EPSDT benchmark benefit package Children group () Children group () Children group () Children group () Children group () Children group (CHIP) Children group (CHIP) Standards (Use MAGI Income Methodology, with no asset limit, unless otherwise noted) Income Presumptive (% of FPL) 2 Eligiblity 3 Program 1 FMAP / Federal $ <39% YES 62.23% Children 0-1 (No income limit if mother was receiving at time of birth) Children ages 0-1 with income <185% FPL Children ages 1-6 with income <133% FPL Children ages 6-19 with income <100% FPL Children ages 0-6 with income above but <200% FPL Children ages 6-19 with income 100% - 133% FPL Children ages 6-19 with income 133% - 200% FPL NO (deemed eligible without application, so no PE.) 62.23% YES 62.23% YES 62.23% YES 62.23% YES CHIP 72.40% YES Expanded 72.40% YES CHIP 72.40% with EPSDT with EPSDT with EPSDT with EPSDT with EPSDT benchmark benefits with EPSDT benchmark benefits Tracking issue: It is unclear whether the state would be required to provide presumptive eligibility for this group of children in 2014 in the same manner that they provide it to all others in the children's group. CMS has not yet issued guidance on presumptive eligibility under the ACA. Note: MOE applies until 9/30/19 Note: MOE applies until 9/30/19 Note: MOE applies until 9/30/19 Note: MOE applies until 9/30/19 Note: MOE applies until 9/30/19 Note: CHIP children 6-19 with income at or below 133% FPL shift to full and retain enhanced CHIP match. MOE applies until 9/30/19. Note: MOE applies until 9/30/19 Notes, Issues and Decision Points 19 2014 Transition Toolkit for States

SAMPLE: State "A," State and Federal Health Coverage Programs, 2012 and 2014 Categories -- Children (Not disabled, under 19)* Current Law (2012) 2014 Medically needy children ( 031) Standards (AFDC Income Methodology) Income (% of FPL) Asset limit >CHIP, Medically needy <39% spend down Asset to 133% limit: of AFDC $4,000 payment standard No asset limit Presumptive Program 1 FMAP (FY 2012) NO 62.23% MCO NO 62.23% MCO with EPSDT with EPSDT (after spend down) Continue Medically Needy Program Option: optional group Option: Basic Health Program Standards (Use MAGI Income Methodology, with no asset limit, unless otherwise noted) Income Presumptive (% of FPL) 2 Eligiblity 3 Non-MAGI, >CHIP. Medically needy spend down to 133% of AFDC payment standard; No asset limit >133% up to state defined limit Program 1 FMAP / Federal $ NO 62.23% optional 72.40% >133% - 200% NA BHP 95% of cost of BHP plan as designed by state with EPSDT with EPSDT Essential Health Notes, Issues and Decision Points Notes: Medically needy income methodology will remain AFDC-related in 2014. Thus in 2014, children would first be evaluated for eligibility based upon MAGI, then non-magi, and, if not eligible for other coverage, would be evaluated for medically needy using the current methodology standards. MOE applies until 9/30/19. through Exchange Above (or BHP, if any) and < 400% NA is federally subsidized Qualified Health Plan Essential Health 1 program refers only to public funding involved. Through premiums and for various programs, families and employers also contribute to fund coverage. 2 In 2014 states will use MAGI methodology for calculating eligibility. For groups now using the AFDC-related methodology, states will convert maximum income eligibility levels from that methodology, which uses significant disregards of income, to the MAGI methodology, which disregards only 5% of the applicable FPL. For the new adult group (and other new groups), the eligibility limit is calculated with the MAGI methodology, making the 133% FPL income limit equivalent to 138% of FPL because of the disregard of 5% of the applicable FPL in MAGI. You do not need to convert to 2014 methodology to fill out the chart. Forthcoming Guidance from CMS and researchers will assist states with conversion methodology. 3 In 2014, presumptive eligibility will be available from hospitals that elect to participate even if state does not elect the option. See memo for more complete explanation of this and other new presumptive eligibility options. *This chart does not include TMA and related groups, although children are eligible through those categories along with their parents. See Parents & Caretaker Relatives chart for full discussion of TMA, and related groups 20 2014 Transition Toolkit for States

Example Matrix (State A eligibility crosswalk) - Parents and Caretaker Relatives (Not disabled, under 65) SAMPLE: State "A," State and Federal Health Coverage Programs, 2012 and 2014 Categories -- Parents and Caretaker Relatives (Not disabled, under 65) Current Law (2012) 2014 1931 group ( 001) Parents and Caretaker Relatives not currently eligible for Standards (AFDC Income Methodology) Income (% of FPL) <39% $4,000 resource limit Presumptive Program 1 FMAP (FY 2012) NO 62.23% MCO Not eligible NA none none none none Parents & Caretaker relatives group () Adult group () Option: optional group Income (% of FPL) 2 <39% 133% >133% up to state defined limit Presumptive Eligiblity 3 Program 1 FMAP / Federal $ Optional 62.23% optional 100% 4 optional 62.23% 95% of cost of Option: Basic Health Program >133% - 200% NA BHP through Exchange Standards (Use MAGI Income Methodology, with no asset limit, unless otherwise noted) Above (or BHP, if any) and < 400% NA is federally subsidized BHP plan as designed by state Qualified Health Plan benchmark coverage Essential Health Essential Health Notes, Issues and Decision Points Note: Families will no longer have $4,000 resource limit in 2014 Note: This group will be newly eligible Tracking Issue: The law now reads that the optional expansion group must have full benefits. Legislation has been offered, but not passed, to permit benchmark benefits for the optional group to make it consistent with the new adult group. Decision point: How does the state want to design coverage for adults over 133% of the FPL? 21 2014 Transition Toolkit for States

SAMPLE: State "A," State and Federal Health Coverage Programs, 2012 and 2014 Categories -- Parents and Caretaker Relatives (Not disabled, under 65) Current Law (2012) 2014 Standards (AFDC Income Methodology) Income (% of FPL) Presumptive Program 1 FMAP (FY 2012) Standards (Use MAGI Income Methodology, with no asset limit, unless otherwise noted) Income (% of FPL) 2 Presumptive Eligiblity 3 Program 1 FMAP / Federal $ Notes, Issues and Decision Points Transitional Medical Assistance ( 056) No limit for months 1-6; <185% for mo.s 7-12. Limited to 12 months after loss of 001 due to earnings or loss of earnings disregard NO 62.23% MCO Unclear, Possibly TMA, adult group, or both There will be no earned income disregards in 2014 Optional for adult group 62.23% or 100% 4 Tracking issue: TMA was reauthorized until December 31, 2012 as part of the recent payroll tax cut extension. If not reauthorized thereafter, states must still provide 4 months TMA if eligibility lost due to increased hours or earnings (but not lost disregards) or increased child or/spousal support). Transition issue: How this eligibility category will be treated is under consideration at CMS. It is unclear whether this eligibility for TMA could disqualify these adults from the newly eligible group for the first 12 months (or 4 months) of coverage following an increase in income because they were otherwise eligible for. For some whose income exceeds 133% or if there is a significant difference between the benefits available for the adult group and full benefits, TMA may remain important to beneficiaries. Transitional due to child or spousal support ( 057) No income limit. Limited to 4 mos. after loss of eligibility under section 1931 due to increase of child or spousal support NO 62.23% MCO Unclear Child support income will no count under MAGI. NA 62.23% or 100% 4 Transition issue: As with TMA, how this will be treated in 2014 is under consideration by CMS. for this group could disqualify these adults from the newly eligible group for the first or 4 months of coverage following an increase in income because they were otherwise eligible for. If there is a significant difference between the benefits available for the adult group and full benefits, this may remain important to beneficiaries. Note: Under the MAGI methodology child support payments received by a household will no longer count as income; but spousal support will continue to count. 22 2014 Transition Toolkit for States

SAMPLE: State "A," State and Federal Health Coverage Programs, 2012 and 2014 Categories -- Parents and Caretaker Relatives (Not disabled, under 65) Current Law (2012) 2014 Standards (AFDC Income Methodology) Income (% of FPL) Presumptive Program 1 FMAP (FY 2012) Standards (Use MAGI Income Methodology, with no asset limit, unless otherwise noted) Income (% of FPL) 2 Presumptive Eligiblity 3 Program 1 FMAP / Federal $ Notes, Issues and Decision Points Medically Needy Parents & Caretaker Relatives ( 032) Medically needy spend down to 133% of AFDC payment standard NO 62.23% MCO with deductible Option: optional expansion group Option: Continue Medically needy program >133% up to state defined limit Non-MAGI Medically needy spend down to 133% of AFDC payment standard optional 62.23% NO 62.23% 95% of cost of Option: Basic Health Program >133% - 200% NA BHP through Exchange Above (or BHP, if any) and < 400% NA is federally subsidized BHP plan as designed by state Qualified Health Plan Essential Health Essential Health Decision point: What is the future of the medically needy option? These parents & caretaker relatives have high medical need in their households. Those with income at or under 133% of the FPL will be newly eligible for, qualifying for enhanced match. Above that income level, the state has four options for these adults: 1) provide optional up to a state defined limit, 2) provide BHP for those up to 200% of the FPL and leave those above 200% to the Exchange with the APTC up to 400%, 3) leave those above 133% to Exchange with the APTC up to 400%, and 4) continue the medically needy program (note that under this option income would continue to be evaluated based on AFDC standards, and not MAGI). Those left solely to the Exchange for whom coverage was unaffordable would be uninsured. 1 program refers only to public funding involved. Through premiums and for various programs, families and employers also contribute to fund coverage. 2 In 2014 states will use MAGI methodology for calculating eligibility. For groups now using the AFDC-related methodology, states will convert maximum income eligibility levels from that methodology, which uses significant disregards of income, to the MAGI methodology, which disregards only 5% of the applicable FPL. For the new adult group (and other new groups), the eligibility limit is calculated with the MAGI methodology, making the 133% FPL income limit equivalent to 138% of FPL because of the disregard of 5% of the applicable FPL in MAGI. You do not need to convert to 2014 methodology to fill out the chart. Forthcoming Guidance from CMS and researchers will assist states with conversion methodology. 3 In 2014, presumptive eligibility will be available from hospitals that elect to participate even if state does not elect the option. See memo for more complete explanation of this and other new presumptive eligibility options. 4 The FMAP for new eligibiles will be 100% for 2014, continuing until 2016, then phasing down to 90% by 2020. The United States Supreme Court has held that the consequence to a state for failing to expand coverage to 133% of FPL would not be the loss of all federal dollars, but rather the loss of dollars related to the expansion. NFIB et al. v. Sebelius, No. 11-393, 45-58 (June 28, 2012). 23 2014 Transition Toolkit for States

Example Matrix (State A eligibility crosswalk) - Pregnant Women SAMPLE: State "A," State and Federal Health Coverage Programs, 2012 and 2014 Categories -- Pregnant Women Current Law (2012) 2014 Standards (AFDC Income Methodology) Income (% of FPL) Asset limit Presumptive Program 1 FMAP (FY 2012) Pregnant women group () Standards (Use MAGI Income Methodology, with no asset limit, unless otherwise noted) Income Presumptive (% of FPL) 2 Eligiblity 3 AFDC income standard in effect as of May 1, 1988. Option: Establish state-defined higher limit optional Program 1 FMAP / Federal $ FMAP (FY 2012) Notes, Issues and Decision Points Note: This state will likely want to continue full in 2014 at least to its current level. CMS indicated in the preamble to the final rule that it would require justification for providing pregnancy related that are any less than the benefits provided to the new adult group. for Pregnant Women ( 004) <133% (income of woman's parent disregarded) No asset limit YES 62.23% MCO Pregnant women group () Option: optional expansion group 133% Option: Establish state-defined higher limit Up to state-defined limit optional 62.23% optional [Regular FMAP] Pregnancy related Tracking Issue: The law now reads that the optional expansion group must have full benefits. Legislation was offered, but not passed, to permit benchmark benefits for the optional group to make it consistent with the new adult group. Pregnant woman that states must cover are exempt from benchmark benefits. Option: Basic Health Program Above - 200% NA BHP 95% of cost of BHP plan as designed by state Essential Health through Exchange Above (or BHP) - 400% NA is federally subsidized Qualified Health Plan Essential Health 24 2014 Transition Toolkit for States

SAMPLE: State "A," State and Federal Health Coverage Programs, 2012 and 2014 Categories -- Pregnant Women Current Law (2012) 2014 Medically needy pregnant women for ( Pregnant Women 032) ( 004) Standards (AFDC Income Methodology) Income (% of FPL) Asset limit > 133%, then medically needy spend down to 133% of AFDC payment <133% (income standard of woman's (roughly parent 50% disregarded) of the FPL) No asset limit Presumptive Program 1 FMAP (FY 2012) NO 62.23% MCO YES 62.23% MCO (after spend down) Option: optional expansion group Option: Continue Medically needy program Option: Basic Health Program through Exchange Standards (Use MAGI Income Methodology, with no asset limit, unless otherwise noted) Income Presumptive (% of FPL) 2 Eligiblity 3 >185% up to state defined limit Non-MAGI Medically needy spend down to 133% of AFDC payment Above - 200% Above (or BHP) - 400% Program 1 FMAP / Federal $ optional 62.23% NO 62.23% NA NA BHP 95% of cost of is federally subsidized BHP plan as designed by state Qualified Health Plan Essential Health Essential Health Notes, Issues and Decision Points Note: This state will likely want to continue full in 2014 at least to its current level. CMS indicated in the preamble to the final rule that it would require justification for providing pregnancy related that are any less than the benefits provided to the new adult group. Tracking Issue: The law now reads that the optional expansion group must have full benefits. Legislation was offered, but not passed, to permit benchmark benefits for the optional group to make it consistent with the new adult group. Pregnant woman that states must cover are exempt from benchmark benefits. CHIP for pregnant women (unborn children) ( 136) 185% and not eligible for YES CHIP for unborn child 72.4% FFS Pregnancy related CHIP 185% and not eligible for Yes CHIP for unborn child 72.4% Notes: This category assists certain pregnant Pregnancy immigrants, their unborn children, and others that related do not meet criteria. MOE would apply until 9/30/2019. 1 program refers only to public funding involved. Through premiums and for various programs, families and employers also contribute to fund coverage. 2 In 2014 states will use MAGI methodology for calculating eligibility. For groups now using the AFDC-related methodology, states will convert maximum income eligibility levels from that methodology, which uses significant disregards of income, to the MAGI methodology, which disregards only 5% of the applicable FPL. For the new adult group (and other new groups), the eligibility limit is calculated with the MAGI methodology, making the 133% FPL income limit equivalent to 138% of FPL because of the disregard of 5% of the applicable FPL in MAGI. You do not need to convert to 2014 methodology to fill out the chart. Forthcoming Guidance from CMS and researchers will assist states with conversion methodology. 3 In 2014, presumptive eligibility will be available from hospitals that elect to participate even if state does not elect the option. See memo for more complete explanation of this and other new presumptive eligibility options. 25 2014 Transition Toolkit for States

SAMPLE: State "A," State and Federal Health Coverage Programs, 2012 and 2014 Categories -- Other Adults (Not disabled, under 65) Current Law (2012) 2014 Standards (AFDC Income Methodology) Income (% of FPL) Asset limit Presumptive Program 1 FMAP (FY 2012) Benefit plan Standards (Use MAGI Income Methodology, with no asset limit, unless otherwise noted) Income Presumptive (% of FPL) 2 Eligiblity 3 Program 1 FMAP / Federal $ Notes, Issues and Decision Points Childless adult 1115 waiver ( 312) <55% NO 1115 waiver 62.23% (capped) MCO limited benefit package Adult group () 133% optional 100% 4 benchmark coverage FMAP issue: Assuming the benefits offered in this program were less than benchmark coverage, adults in this category will count for the full newly eligible FMAP in the Adult group. Adults not currently eligible for not eligible NA none none none none Adult group () Option: optional group Option: Basic Health Program 133% optional 100% 4 >133% up to state defined limit optional >133% - 200% NA BHP 62.23% (capped) 95% of cost of BHP plan as designed by state benchmark coverage Essential Health Tracking issue: A state may no longer risk the loss of all federal matching funds if it fails to expand to adults up to 133% of the poverty level according to the recent Supreme Court decision upholding the ACA. Watch for CMS's response to the decision. Decision point: For adults at or below 133% of the FPL, the state must decide the amount and scope of benefits (benchmark or full ). Tracking Issue: The law now reads that the optional expansion group must have full benefits. Legislation has been offered, but not passed, to permit benchmark benefits for the optional group to make it consistent with the new adult group. through Exchange Above (or BHP, if any) and <400% NA is federally subsidized Qualified Health Plan Decision point: For adults above 133% of the FPL, how will the state provide coverage? The state has three options (alone or in combination): 1) extend to higher income levels (state-defined levels); 2) Essential develop a BHP for those between 133% and 200% of the FPL; and 3) Health leave those not covered by (or the BHP) to purchase coverage in the Exchange with help from the APTC. If not affordable, they would be uninsured. 1115 Family Planning Waiver ( 314) <185%, women only NO 1115 waiver 90% FFS Family Planning Services Only Adult group () Option: optional group Option: Family planning only 133% optional 100% 4 >133% up to state defined limit Higher limit than (or BHP) up to state defined-limit optional Optional (Option: renew waiver or do SPA) 62.23% (capped) 90% for Family planning and supplies benchmark coverage Family Planning Services Decision point: The state will have three options: renew and revise the family planning waiver, adopt the new family planning option under ACA 2303, or simply let the waiver expire. Although many individuals who now benefit from the waiver will become eligible for, BHP (if any) or the premium tax credit, some will remain uninsured because insurance will be unaffordable. These individuals would continue to benefit from these. 26 2014 Transition Toolkit for States

SAMPLE: State "A," State and Federal Health Coverage Programs, 2012 and 2014 Categories -- Other Adults (Not disabled, under 65) Current Law (2012) 2014 Standards (AFDC Income Methodology) Income (% of FPL) Asset limit Presumptive Program 1 FMAP (FY 2012) Benefit plan Standards (Use MAGI Income Methodology, with no asset limit, unless otherwise noted) Income Presumptive (% of FPL) 2 Eligiblity 3 Program 1 FMAP / Federal $ Notes, Issues and Decision Points 1115 Family Planning Waiver ( 314) Breast and Cervical Cancer Prevention and Treatment ( 091) <250% (limit for screening by CDC program), uninsured, female under 65 NO (simplified application) 72.40% MCO Option: Basic Health Program through Exchange Option: retain BCCPT Adult group () Option: optional group Option: Basic Health Program through Exchange 133-200% NA BHP Above (or BHP, if any) to 400% None (CDC limit is <250% for screening) 133% >133% up to state defined limit NA 95% of cost of is federally funded optional 72.40% optional optional >133% - 200% NA BHP Above (or BHP) and < 400% NA 100% 4 as newly eligible group 62.23% (capped) 95% of cost of is federally subsidized BHP plan as designed by state Qualified Health Plan BHP plan as designed by state Qualified Health Plan Essential Health Essential Health benchmark coverage Essential Health Essential Health 1 program refers only to public funding involved. Through premiums and for various programs, families and employers also contribute to fund coverage. 2 In 2014 states will use MAGI methodology for calculating eligibility. For groups now using the AFDC-related methodology, states will convert maximum income eligibility levels from that methodology, which uses significant disregards of income, to the MAGI methodology, which disregards only 5% of the applicable FPL. For the new adult group (and other new groups), the eligibility limit is calculated with the MAGI methodology, making the 133% FPL income limit equivalent to 138% of FPL because of the disregard of 5% of the applicable FPL in MAGI. You do not need to convert to 2014 methodology to fill out the chart. Forthcoming Guidance from CMS and researchers will assist states with conversion methodology. 3 In 2014, presumptive eligibility will be available from hospitals that elect to participate even if state does not elect the option. See memo for more complete explanation of this and other new presumptive eligibility options. 4 The FMAP for new eligibles will be 100% for 2014, continuing until 2016, then phasing down to 90% by 2020. The United States Supreme Court has held that the consequence to a state for failing to expand coverage to 133% of FPL would not be the loss of all federal dollars, but rather the loss of dollars related to the expansion. NFIB et al. v. Sebelius, No. 11-393, 45-58 (June 28, 2012). Transition note. Under the ACA, adults with income at or below 133% of the FPL who were eligible for only family planning related should become newly eligible and count toward the enhanced FMAP in 2014 because the level of benefit they were eligible for in the Family Planning Waiver would not meet benchmark standards. (SSA 1905(y)(2)). Transition note: Enrollment in the Breast and Cervical Cancer Program is likely to be reduced, because more will have access to coverage. However, those who remain uninsured would still need access to breast and cervical cancer screening and treatment. 27 2014 Transition Toolkit for States

Reference: Acronyms used in chart ACA Patient Protection and Affordable Care Act ACO Accountable Care Organization BHP Basic Health Program (as defined under section 1331 of ACA) EHB Essential Health (as defined under section 1302 of ACA) FFS Fee for service FMAP Federal medical assistance percentage HMO Health maintenance organization MAGI Modified adjusted gross income (as defined under section 2002 of ACA) MCO Managed care organization MOE Maintenance of Effort PCCM Primary care case management APTC Advanced Premium Tax Credit (as defined under section 1401 of ACA) QHP Qualified Health Plan RCO Regional care organization SSA Social Security Act TMA Transitional Medical Assistance 28 2014 Transition Toolkit for States

Reference: Key to federal statutory citations for current eligibility groups Children < 19 Social Security Act section Parents & Caretaker Relatives Social Security Act section 1931 Group 1902(a)(10)(A)(i)(I); 1931 group 1931 1902(a)(10)(A)(i)(I); 1931 Newborns of eligible mothers 1902(l)(1)(B) Transitional Medical Assistance 1902(e)(4) 1902(e)(1)(A); 1925 Children's 0-1 1902(a)(10)(A)(i)(IV); Transitional due to child or spousal 1902(l)(1)(A) support 1902(a)(10)(A)(i)(I); 406(h) Children's ages 1 to 5 1902(a)(10)(A)(i)(VI); 1902(l)(1)(C) Medically Needy Parents & Caretaker Relatives 1902(a)(10)(C) Children's ages 6 to 18 1902(a)(10)(A)(i)(VII); 1902(l)(1)(D) CHIP 2102(b) Medically needy children 1902(a)(10)(C)(ii)(I) Pregnant Women Social Security Act section Other Adults Social Security Act section 1902(a)(10)(A)(i)(IV); for Pregnant Women Childless Adults (i.e. 1115 waiver) 1902(l)(1)(A) 1115 Medically needy pregnant women 1902(a)(10)(C)(ii)(II) CHIP for pregnant women (unborn children) 2112 Family Planning (1115 waiver or SPA) 1115 or ACA 2001(e), 2303 Breast and Cervical Cancer Prevention and Treatment 1902(a)(10)(A)(ii)(XVIII) 29 2014 Transitions Toolkit for States