Health Update -- Manatt on Medicaid

by Manatt, Phelps & Phillips, LLP

Editor’s note: The new issue of “Manatt on Medicaid” provides insights into two critical developments. First, we examine a new strategy for financing 12 months of continuous coverage for newly-eligible adults, including implications for stakeholders and procedures for implementation. Next, we look at growing state interest in Medicaid expansion. Summaries of key points are below. To download the full “Manatt on Medicaid” briefings, click here.

Manatt on Medicaid: New Strategy for Financing 12 Months of Continuous Coverage for Newly Eligible Adults

Authors: Jocelyn Guyer, Director, Manatt Health Solutions | Tanya Schwartz, Manager, Manatt Health Solutions

The federal government recently issued sub-regulatory guidance that will allow states to receive 98.7 percent to 99.3 percent of the cost of providing 12 month continuous coverage to adults newly eligible for Medicaid in expansion states. In states that adopt the option, not only will consumers benefit, but issuers and providers can expect greater stability in their revenue streams and a greater return on investments in preventive services and care management.


In May of 2013, the Centers for Medicare & Medicaid Services (CMS) issued guidance to states on strategies available to facilitate the enrollment and renewal of eligible people into Medicaid coverage. One strategy provides states the option to seek a Section 1115 waiver to provide 12 months of continuous Medicaid eligibility for adults regardless of changes in circumstances that occur during the year. Though states have had this option for children since 1997, the May 2013 guidance represents the first time that CMS has offered states the opportunity to implement 12 months of continuous eligibility for adults.

Until recently, however, no states had implemented 12 months continuous eligibility for newly-eligible adults, largely due to financing barriers. CMS informed interested states that they could not receive the 100 percent matching rate for 12-month continuous eligibility, but did not yet have details on what the available matching rate would be.

Enhanced Federal Medical Assistance Program (FMAP)

Recently, CMS announced a new, simplified formula for establishing the appropriate matching rate. Drawing on research conducted by George Washington University, CMS determined that 97.4 percent of the cost should be financed at the enhanced matching rate available for newly-eligible adults and the remaining 2.6 percent at a state’s regular Medicaid matching rate. As a result, states will receive a matching rate between 98.7 percent and 99.3 percent for the cost of 12 month continuous eligibility for newly-eligible adults in 2014.1  Click to see state-specific data on the matching rate applicable to newly-eligible adults in states that elect this option.

Implications for Stakeholders

The new option offers the possibility of greater continuity of coverage for consumers, administrative simplicity for states and enhanced opportunities for issuers and providers to develop stable relationships with enrollees and patients. The potential advantages include:

  • Greater continuity of coverage for consumers
  • More reliable source of revenue for plans and providers
  • Greater potential return on investments in prevention and care management
  • Greater capacity to measure quality
  • Administrative savings for states, issuers and providers

Ultimately, however, it is the states that must decide whether or not to pursue this option.

Implementation Procedures

To take up this policy option, states must submit a Section 1115 waiver to CMS or, if they already have a waiver, they must submit an amendment. As with all Section 1115 waivers, those aimed at the 12-month continuous eligibility option are subject to transparency requirements and must be made available for public comment. However, CMS has advised that it will review these waivers expeditiously and assist states in developing and submitting their applications or amendments.

1 In future years, a state’s matching rate for continuous eligibility will continue to depend on its regular Medicaid rate and on the enhanced matching rate for newly-eligible adults, which remains at 100 percent through the end of 2016, but then declines modestly in 2017 and future years until it reaches 90 percent in 2020.

Manatt on Medicaid: Growing Interest in Medicaid Expansion

Authors: Kinda Serafi, Counsel, Manatt, Phelps & Phillips, LLP | Mindy Lipson, Senior Analyst, Manatt Health Solutions

In just the last two weeks, at least four states have advanced Medicaid expansion discussions:

  • On March 7, Governor Beebe (D) signed into law SB111, Arkansas’s fiscal year 2015 Department of Human Services budget bill containing the appropriation for the Private Option immediately after the Arkansas House passed the bill by the required three-fourths margin on its fifth vote. Arkansas’s Private Option uses Medicaid premium assistance to purchase Qualified Health Plan (QHP) coverage for all expansion adults except the medically frail who receive coverage through the State’s Medicaid fee-for-service program.
  • On February 19, Governor Corbett (R) of Pennsylvania filed a waiver with CMS seeking to expand the state’s Medicaid program using premium assistance to purchase QHP coverage for new adults. The waiver included a request to impose cost sharing and premiums and also to impose work requirements as a condition of eligibility. On March 5, Governor Corbett changed course and advised CMS that the State will no longer include a work-search requirement in the Healthy Pennsylvania plan to expand Medicaid in the State and will instead use a voluntary incentive approach.
  • On March 6, New Hampshire’s Senate approved a bill to implement Medicaid expansion through a combination of premium assistance for those with available employer-sponsored insurance—starting as soon as is practicable—and premium assistance for other newly eligible individuals to enroll in QHPs in the Marketplace, beginning January 1,  2016.
  • Governor Mead (R) of Wyoming signed the state’s biennial budget bill on March  5, which includes a provision permitting the Governor, Director of the Department of Health, and State Insurance Commissioner to enter negotiations with the federal government regarding a Medicaid expansion demonstration waiver.

Written by:

Manatt, Phelps & Phillips, LLP

Manatt, Phelps & Phillips, LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.