Frequently Asked Questions are used to provide additional information and/or statutory guidance not found in State Medicaid Director Letters, State Health Official Letters, or CMCS Informational Bulletins. The different sets of FAQs as originally released can be accessed below.
Frequently Asked Questions
What is MAGI and how is it different than the way states calculate eligibility today?
It's a new, simpler way to determine eligibility for Medicaid and CHIP.
The Affordable Care Act provides new simplified method for calculating income eligibility for Medicaid, CHIP and financial assistance available through the health insurance Marketplace. This new method calculates eligibility for all programs based on what is called modified adjusted gross income (MAGI). By using one set of income eligibility rules across all insurance affordability programs, the new law makes it easier for people to apply for health coverage through one application and enroll in the appropriate program. MAGI will replace the current process for calculating Medicaid eligibility that is in place today, which uses income deductions (known as "disregards") that are different in each state and often differ by eligibility group.
FAQ ID:92461
SHARE URLWill these new MAGI rules apply to all people applying for Medicaid?
The new rules apply to most people who are eligible for Medicaid and Chip, but not the elderly or people who qualify based on a disability.
For coverage effective January 2014, MAGI will be the basis for determining both Medicaid and CHIP eligibility for children, pregnant women, parents and the adults enrolled under the new adult eligibility group created by the ACA (in states that adopt that eligibility group.) Individuals age 65 and older and those who qualify for Medicaid based on disability are not affected by the new rules.
FAQ ID:92466
SHARE URLIf a state is not expanding Medicaid in 2014, does it still use MAGI rules?
Yes. A state's decision whether or not to extend Medicaid coverage for low-income adults in 2014 is not related to the use of MAGI. MAGI rules simplify the eligibility rules and promote coordination between Medicaid and CHIP and coverage available through the Marketplace; coordination will be important for consumers in all states regardless of a state's decision on Medicaid eligibility for low-income adults.
FAQ ID:92471
SHARE URLWhy are the new MAGI income standards higher than the old ones (even when there is no eligibility expansion)?
The eligibility standards (where there's been no expansion) are not any higher than the old standards; they are expressed in a different way (gross versus net).
In the past, Medicaid and CHIP eligibility used a combination of an income eligibility standard--often expressed as a percentage of the Federal Poverty Level (FPL)--and a series of deductions (known as "disregards" that were like footnotes or 'below the line' adjustments to income and were determined by each state. The new way of calculating eligibility based on MAGI translates that two-part process into a one step process using an income standard that incorporates the 'below the line' deductions. This makes the new standard appear higher than the old one (e.g. from 185% of the FPL to 193% of the FPL for pregnant women). In effect, however, the new income standard represents what the state's old two-step process would have resulted in, just expressed in a different way.
FAQ ID:92476
SHARE URLDo the MAGI changes mean more people will be eligible for Medicaid (even when there is no eligibility expansion)?
No, overall the new methodology does not change the number of people eligible for Medicaid. The MAGI-based standard will result in approximately the same number of people being eligible under the new standard as would have been eligible under the old standard. However, there may be some differences in which people will qualify--or not qualify--depending on how they might have fared under the old system (with deductions and disregards).
FAQ ID:92481
SHARE URLCan you give an example of how the old rule worked, prior to MAGI?
Before MAGI, if a state's income limit was 100% of the FPL--the state would first look at the person's gross income, then subtract out (for example) 30% of their earned income and an amount they spend on childcare as work-related expense deductions and then compare that net income to 100% of the FPL. This means that under the pre-MAGI rules, in a state with an income eligibility limit of 100% of the FPL, a person with income over 100% of the FPL can qualify for Medicaid (because of the deductions and disregards).
FAQ ID:92486
SHARE URLHow will the new MAGI rules work?
The state will look at the individual's modified adjusted gross income, deduct 5%, which the law provides as a standard disregard, and compare that income to the new standard.
FAQ ID:92491
SHARE URLHow were the new MAGI-based income standards set?
Based on guidance issued in December 2012 (PDF, 177.59 KB), CMS worked with states to set their new standards. Most states used a model that determines the average value of the disregards a state had in place and then added that amount to the old standard to create the new eligibility levels. In the example above, in a state with a net income standard of 100% of the FPL, if the average value of the disregards equaled 6 percentage points of the FPL, that value would be added to the old standard for a new eligibility standard of 106% of the FPL.
FAQ ID:92496
SHARE URLWhat is the benefit for a state to have milestone reviews with CMS?
Milestone reviews have proven to reduce risk by having earlier discussions where CMS can identify opportunities for efficiencies, facilitate collaboration with other states, and share other ideas that can save time, money, and effort. Identifying issues and opportunities earlier in the process will allow for a much greater impact than was experienced under the old process.
FAQ ID:93976
SHARE URLWe are procuring a COTS solution. This prevents us from providing some of the technical evidence requested in the certification checklists. Will this pose a problem?
CMS encourages the use of COTS solutions where possible, and the milestone review process supports certification of COTS products. The review criteria are intended to be tailorable to support different solutions, including COTS. In this case, the technical criteria in the checklists that do not apply to COTS may be marked ""Not Applicable"" with an explanation as to why they do not apply.
FAQ ID:93986
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