About The ACA & Medicaid
As a result of the Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended), Medicaid underwent a number of changes. One of the most widely discussed items is the possibility of expanding eligibility to adults with incomes up to 133 percent of the federal poverty level. As a result of the June 2012 Supreme Court ruling in National Federation of Independent Business v. Sebelius, Medicaid expansion was effectively allowed. It is estimated that over three-quarters of states have expanded Medicaid.
Aside from expanding Medicaid, the Affordable Care Act offered new premium tax credits to help Americans buy private health insurance, thereby increasing their access to health insurance. Additionally, the legislation eliminated preexisting condition exclusions and limited out-of-pocket costs in the private insurance market. Young adults could also remain on their parents’ insurance plans until they turned 26 and must obtain minimum essential coverage.
ACA provisions include a requirement that states cannot reduce eligibility below that that existed on the date of enactment of the ACA. As of 2014, the provision only applied to adults and 2019 to children. Medicaid eligibility thresholds for children were aligned with the ACA at 133 percent FPL, requiring some states to move older children from separate CHIP programs to Medicaid. Medicaid eligibility thresholds were different for infants and children under the age of 1, and for children 6-18 up to 100 percent FPL.
Medicaid, CHIP, and subsidized exchange coverage can all be applied for through a single application, as part of the ACA’s provisions to streamline eligibility, enrollment, and renewal processes. No matter whether states expanded Medicaid eligibility to non-disabled adults or not, enrollment and spending in Medicaid have increased due to these changes.
The ACA also reduced federal funds for disproportionate share hospital (DSH) supplemental payments in the hope of reducing uncompensated care. A number of delays have been made to these reductions, and they are currently set to take effect in 2024.
