On March 16, 2012, CMS issued a final rule establishing procedures for states to use in determining eligibility and enrolling Medicaid applicants beginning on January 1, 2014, when the Affordable Care Act’s expansion of the Medicaid program takes effect. The final rule, which adopts most of the provisions in the August 17, 2011 proposed rule, implements several Affordable Care Act provisions relating to Medicaid eligibility, enrollment, and coordination with state insurance exchanges and the Children’s Health Insurance Program (CHIP).

Specifically, the final rule:

• Extends eligibility to individuals between ages 19 and 64 with income up to 133 percent of the federal poverty level (currently $14,856 for an individual and $30,656 for a family of four). In addition, children will be eligible for Medicaid or CHIP at higher income levels based on eligibility standards already in place in their state.

• Streamlines the process for enrolling Medicaid and CHIP applications by basing eligibility on a single “Modified Adjusted Gross Income” (MAGI) and by consolidating eligibility categories into four main groups – adults, children, parents, and pregnant women. In addition, the final rule instructs states to use electronic data sources to verify eligibility, including information located on a “federal data services hub.”