CMS Guidance Explains Expansion FMAPs, Treatment of Pregnant Women, Basic Health

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By Ralph Lindeman  

The Centers for Medicare & Medicaid Services Feb. 6 clarified how increased federal matching rates would apply to Medicaid expansion populations beginning in 2014, how the Medicaid expansion applies to pregnant women, and when CMS expects to implement the Basic Health Program under the Affordable Care Act.

The CMS paper is another in a series of guidance documents written in question-and-answer format released by the agency over the past several months.

With the Medicaid expansion, two types of increased federal medical assistance percentages (FMAPs) will be available to states, CMS noted. ACA allows states, beginning in 2014, to extend Medicaid coverage to single adults younger than 64 with income of up to 133 percent of the federal poverty level (FPL) (effectively 138 percent because of a 5 percent income disregard allowed in ACA).

'Newly Eligible FMAP.'

A “newly eligible FMAP” will be available to states that decide to participate in the Medicaid expansion, which the U.S. Supreme Court made optional for states in its June 2012 ruling (20 HCPR 1092, 7/2/12).

This FMAP will cover all state expansion costs (100 percent match) from 2014 through 2016; provide a 95 percent match in 2017; 94 percent match in 2018; 93 percent match in 2019; and 90 percent match in 2020 and beyond, CMS said.

'Expansion State FMAP.'

In addition, before Congress enacted ACA in March 2010, some states already had expanded their Medicaid coverage to adults with higher incomes. For Medicaid enrollees that fall into this group, CMS said another FMAP, known as an “expansion state FMAP,” will be available.

The expansion state FMAP will be the regular (non-newly eligible) FMAP rate increased by a “transition percentage,” which will result in a lower FMAP than the newly eligible FMAP. The transition percentage will increase gradually, however, so that by 2019 it will equal the newly eligible FMAP, CMS said.

CMS said states seeking to confirm their status as expansion states should provide the agency with an analysis of the scope of coverage provided as of March 23, 2010, citing applicable demonstration special terms and conditions. “A state will always receive the more favorable FMAP if two FMAPs might be applicable for a particular population,” CMS said.

“CMS is trying to simplify the determinations of which state expansions qualify for the enhanced FMAP,” Timothy Jost, a health law and policy expert at Washington and Lee School of Law, told BNA. He said CMS “is trying to lure states into participating in the expansion” by narrowing the circumstances under which the less generous FMAP would apply.

Treatment of Pregnant Women.

The CMS guidance also addressed whether states need to track women enrolled in the Medicaid expansion group who become pregnant. A key aspect of the Medicaid expansion is that it will provide coverage to nonpregnant, childless adults--a population not traditionally covered by state Medicaid programs.

If a woman indicates on an initial application that she is pregnant, she should be enrolled in a state's pre-existing Medicaid coverage as a pregnant woman rather than in the newly eligible group.  

If a woman indicates on an initial application that she is pregnant, she should be enrolled in a state's pre-existing Medicaid coverage as a pregnant woman rather than in the newly eligible group, CMS said. States are not required to track the pregnancy status of women already enrolled in the newly eligible group, however, the agency added.

Basic Health Program Option Postponed.

The CMS guidance also said that a new Basic Health Program option available to states under ACA will not be operational until 2015.

“Given the scope of the coverage changes that states and the federal government will be implementing on Jan. 1, 2014, and the value of building on the experience that will be gained from those changes, [the Department of Health and Human Services] expects to issue proposed rules regarding the Basic Health Program for comment in 2013 and final guidance in 2014, so that the program will be operational beginning in 2015 for states interested in pursuing this option,” CMS said.

The Basic Health Program is an optional coverage program under ACA that makes federal tax subsidies available to states to provide coverage for individuals with income between 139-200 percent of the poverty level who would otherwise be eligible to purchase coverage through state-based health insurance exchanges.

By Ralph Lindeman  

The CMS guidance on FMAPs, pregnant women, and Basic Health Program is available at

The complete series of Q&A documents released by CMS is at

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