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Medicaid Financial Eligibility

NORD supports the ability of more rare disease patients to access comprehensive Medicaid services through expanded financial eligibility.

Medicaid is an entitlement program administered through a partnership between the federal government and the states, wherein individuals meeting certain criteria are guaranteed access to health care coverage. The program currently covers over 70 million Americans, making it the largest provider of health insurance in the United States and a critical safety net for its enrollees.¹ Medicaid also plays a significant role in supporting the rare disease community, as many individuals with rare diseases depend on Medicaid for primary or supplemental health care coverage.

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State Role in Medicaid Program Eligibility and Benefits

Each state has a significant role in shaping its own Medicaid program, resulting in considerable variability in state Medicaid program eligibility and benefits. Although Medicaid is often described as a single, cohesive program, the vast differences among state programs make it difficult to describe in general terms and grade. There are a host of characteristics that influence the degree to which state Medicaid programs are equipped to meet the needs of rare disease patients. NORD’s State Report Card focuses on two of these characteristics that are of great importance to the rare disease community: (1) eligibility levels; and (2) policies carried out through the authority granted under section 1115 of the Social Security Act.² Additional information on how states performed in each of these policy areas is contained within the appendices.

Medicaid Financial Eligibility

Prior to the enactment of the Affordable Care Act (ACA) in 2010, United States citizens could be eligible for Medicaid in the state in which they resided if they were members of a certain group (e.g., children, parents of dependent children, pregnant women, etc.) and if their income and combined assets fell within a range determined by the state. While it is not a requirement that states implement Medicaid programs, there are operational Medicaid programs in all 50 states. The ACA amended this eligibility standard by removing the specific categories and establishing a nationwide minimum income eligibility level at 138% of the federal poverty level (FPL) (e.g., 138% FPL for an individual in 2020 was $17,609)³ for all states operating Medicaid programs. This policy is often referred to as Medicaid “expansion.”

In 2012, however, the Supreme Court, in National Federation of Independent Business v. Sebelius, found the ACA’s establishment of a national standard to be unconstitutional, leaving the decision of whether to expand Medicaid to the states. Since that decision, many states have chosen to expand Medicaid, establishing a minimum eligibility level of 138% FPL and providing Medicaid coverage for childless adults, who had previously been ineligible. Such expansion has resulted in fewer uninsured Americans and allowed many Americans with rare diseases to gain health care coverage. There are still several states, however, that have opted not to expand Medicaid, depriving millions of uninsured or underinsured Americans of the ability to access coverage through Medicaid.

Children’s Health Insurance Program (CHIP)

The federal government also expanded access to health care coverage through the creation of the Children’s Health Insurance Program (CHIP). Like Medicaid, CHIP is a joint venture between the federal government and the states. Unlike Medicaid, however, CHIP is not an entitlement program. Rather, CHIP is a grant program under which the federal government provides states with a limited sum of money. States are not required to implement CHIP, but every state has done so and as of September 2020, 6.7 million children were enrolled in CHIP. Further, states can choose to operate CHIP within their Medicaid program, separately from their Medicaid program, or in combination with their Medicaid program. CHIP is intended to aid those children and families who may not be eligible for Medicaid, but who are still unable to afford the care they need. The federal government assists states in covering children through CHIP up to 300% FPL. To continue this assistance, CHIP must be reauthorized by the federal government. CHIP is currently authorized through fiscal year 2027.

Grading Methodology

To evaluate eligibility standards, NORD graded states on each of the following categories:

  1. Eligibility for Parents of Dependent Children: NORD analyzed the income level (% of federal poverty level, or FPL) at which states allow parents of dependent children to enroll in Medicaid. States where eligibility was set at 138% of FPL or greater received an A. States where eligibility was set between 100% to 137% of FPL received a B. States where eligibility was set between 90% to 99% of FPL received a C. States where eligibility was set at 89% of the FPL or less received a D. States with no coverage for this group received an F.
  2. Eligibility for Childless Adults: NORD assessed whether states have expanded their Medicaid program, thereby allowing for childless adults to become eligible. States where eligibility was set at 138% of FPL or greater received an A. States where eligibility was set between 100% to 137% of FPL received a B. States where eligibility was set between 90% to 99% of FPL received a C. States where eligibility was set at 89% of the FPL or less received a D. States with no coverage for this group received an F.
  3. Eligibility for Pregnant Women: NORD assessed state financial eligibility requirements for pregnant women to enroll in Medicaid. States where eligibility was set at 220% of FPL or greater received an A. States where eligibility was set between 190% to 219% of FPL received a B. States where eligibility was set between 150% to 189% of FPL received a C. States where eligibility was set at 149% of the FPL or less received a D. States with no coverage for this group received an F.
  4. Eligibility for Children (Including CHIP-Funded Eligibility): NORD assessed state financial eligibility requirements for children ages 0-18. States where eligibility for Medicaid or CHIP was set at 300% of FPL or greater received an A. States where eligibility was set between 195% to 299% of FPL received a B. States where eligibility was set between 150% to 194% of FPL received a C. States where eligibility was set at 149% of the FPL or less received a D. States with no coverage for this group received an F.
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