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Final Rule for Strengthening Medicaid, The Children’s Health Insurance Program and The New Health Insurance Marketplace (CMS-2334-F)

Final Rule for Strengthening Medicaid, The Children’s Health Insurance Program and The New Health Insurance Marketplace (CMS-2334-F)
For Immediate Release
Friday, July 05, 2013

On July 5, 2013, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that supplements the Exchange final rule, which includes finalized Exchange and Medicaid and the Children’s Health Insurance Program (CHIP) provisions associated with the eligibility changes under the Affordable Care Act of 2010.  



Under the Affordable Care Act, millions of Americans will gain access to affordable health coverage through the Marketplace and improvements to Medicaid and CHIP.  These programs will use consistent standards and systems to seamlessly and efficiently meet consumers’ health coverage needs, improve quality and lower costs. 

This final rule addresses aspects of the Medicaid, CHIP and Marketplace eligibility notices and appeals processes; provides additional flexibility regarding benefits and cost sharing for state Medicaid programs; codifies several eligibility and enrollment provisions included in the Affordable Care Act and provides operational guidance to help states implement their Health Insurance Marketplaces.

This final rule does not address all of the proposed regulatory changes included in the notice of proposed rulemaking (NPRM) released on January 22, 2013.  In order to best assist states in preparation for the availability of new coverage beginning January 1, 2014, this rule focuses only on those provisions that we believe states are already in the process of implementing, the provisions that are most important for implementation.  CMS intends to address the remaining provisions of the January NPRM in future rulemaking. The rule includes transition policies for 2014 as applicable. 


Key Provisions of the Final Rule

Coordination of Appeals of Eligibility Determinations.  To simplify the process for consumers and states, the final rule provides options for a coordinated appeals process between the Marketplace, Medicaid and CHIP, and establishes that state Medicaid agencies may delegate the authority to conduct Medicaid fair hearings to the Marketplace, provided that certain standards that protect Medicaid applicants and beneficiaries are met.

Notices.   To ensure consumers have clear information and to modernize program operations, the rule specifies that notices to applicants, enrollees and beneficiaries must include clear and accurate information about eligibility for all insurance affordability programs (including Medicaid, CHIP, and premium tax credits and cost-sharing reductions to help pay for health insurance coverage through the Marketplace) and establishes that electronic notices will be available from the Marketplace starting on October 1, 2013, and from state Medicaid and CHIP agencies no later than January 1, 2015.  

Medicaid Benefits.  States have flexibility under section 1937 of the Social Security Act to design benefit packages “benchmarked” to commercial products. These plans must also assure that the ten categories of Essential Health Benefits (EHBs) specified in the Affordable Care Act are provided. The final rule provides guidance on the design and use of these benefit plans (now known as Alternative Benefit Plans) and their coverage of EHBs for the new adult group beginning January 1, 2014. 

Medicaid Cost Sharing.  This final rule updates and simplifies policies around Medicaid premium and cost-sharing requirements designed to promote the most effective use of services and to assist states in identifying cost-sharing flexibilities. Specifically, the final rule permits states to establish higher cost sharing for prescription drugs, for non-emergency use of the emergency department and updates the maximum allowable cost-sharing levels to consolidate provisions. The final rule also creates one streamlined set of rules for all Medicaid premiums and cost sharing while clarifying that the limit on out of pocket costs will continue to ensure that coverage remains affordable for the lowest income Americans.   

Open Enrollment. Consistent with the proposed rule, the final rule establishes that Medicaid and CHIP agencies will begin accepting the single streamlined application during the initial open enrollment period to help facilitate a coordinated transition to new coverage that will become available in Medicaid and through the Marketplace in 2014.  Between October 1, 2013 and January 1, 2014, state Medicaid and CHIP agencies will determine eligibility for coverage that will begin in 2014 and accept electronic account transfers from the Marketplace.  During this three month period, states will also be expected to make timely Medicaid and CHIP eligibility determinations with respect to eligibility under the current (2013) rules, but have flexibility in how they will manage these responsibilities.

Verification of Employer-Sponsored Coverage. Individuals who are enrolled in employer-sponsored coverage or eligible for employer-sponsored coverage that meets affordability and minimum value standards are ineligible to receive advance payments of the premium tax credit or cost-sharing reductions through the Marketplace. This final rule includes details on the procedures for the Marketplace to verify access to employer-sponsored coverage, which was proposed based on extensive consultation with employers and other stakeholders.

Presumptive Eligibility. This rule finalizes policies related to the new Affordable Care Act provision to permit hospitals to make presumptive eligibility determinations (this option is available to hospitals, regardless of whether the state has elected presumptive eligibility as a state plan option).  The rule also finalizes policies related to determining presumptive eligibility for other populations.

The final rule will be published in the Federal Register on July 15, 2013. For more information, please see: