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Following implementation of Medicaid expansion under the Affordable Care Act (ACA) in North Carolina and South Dakota in 2023, there has been a recent surge in expansion activity early in 2024 among several of the ten states that have not yet adopted Medicaid expansion. While activity in Alabama, Georgia, and Kansas may have stalled, there continues to be growing potential for action in Mississippi. While expansion activity is ongoing in several states, President Biden continues to urge Congress to close the coverage gap in the remaining non-expansion states, though that is unlikely in a divided Congress. This policy watch takes a look at recent activity, what expansion could mean in Mississippi, and what to watch as things continue to play out.
What is the status of Medicaid expansion in Mississippi?
Medicaid expansion legislation (HB 1725) was recently passed in the Mississippi House by a 99-20 vote (a veto-proof majority) that directs the Division of Medicaid to seek a waiver to implement the expansion. The waiver would require individuals to be working in a job without health insurance, enrolled as a full-time student, or enrolled full-time in a workforce training program. Coverage would be delivered through managed care plans, which would provide workforce training and skills building and financial literacy materials. Individuals who have insurance through employer or private health insurance and who voluntarily disenroll from that coverage would not be eligible for Medicaid expansion coverage for 12 months. A $10 copay would be required for nonemergency use of the emergency room.
The legislation requires the Medicaid agency to submit a State Plan Amendment (SPA) to implement the expansion if the waiver is not approved by Sept. 30, 2024 or if approved and subsequently terminated. The SPA would be “substantially the same” as the waiver plan in terms of coverage group, delivery system, benefits package, and funding but would exclude the work requirement.
The bill includes financing and other provisions. The legislation stipulates that the expansion is contingent upon continuation of the current federal matching rate (FMAP) of 90%. Through waiver or SPA, the legislation calls for an assessment on hospitals and managed care plans to fund portion of the state share. The legislation would implement expansion starting January 1, 2025 and would require reauthorization to extend expansion beyond January 31, 2029.
What are the implications of Medicaid in Mississippi?
Medicaid eligibility for adults in Mississippi is very limited. In Mississippi, current eligibility limits for parents is 28% of the federal poverty level (FPL) or $7,230 annually for a family of three. There is no pathway for coverage for childless adults, so most childless adults with incomes below the poverty level have no options for affordable, comprehensive health coverage, since ACA premium subsidies are available only for people with income levels at or above poverty.
KFF estimates that 123,000 uninsured adults could be eligible for Medicaid if the state adopts the Medicaid expansion. This number includes 74,000 adults with incomes below poverty who fall into the coverage gap and an additional 49,000 uninsured adults with incomes between 100% and 138% FPL. Adults who fall into the coverage gap have incomes above current Medicaid eligibility limits, but below poverty, making them ineligible for subsidies in the ACA Marketplaces. Most uninsured adults with incomes between 100% and 138% FPL are currently eligible for Marketplace coverage but not enrolled. Most of the adults who are currently eligible for coverage in the Marketplace qualify for plans with zero premiums; however, even with no premiums, Medicaid could provide more comprehensive benefits and lower cost-sharing compared to Marketplace coverage.
What are key developments to watch?
Mississippi Medicaid expansion legislation is now under consideration in the Senate. The outcome of the legislation remains uncertain, and Senate leaders plan to introduce their own proposal so it is likely that there will be further negotiations between the two chambers. CMS under the Biden Administration is not expected to approve work requirement waivers. Unlike the House bill, the Senate proposal could include language and dates that would wait for a future presidential administration to take office and approve a waiver before expansion would be implemented. Even if a bill is passed by both legislative chambers, Governor Reeves has remained opposed to expansion.
A temporary financial incentive for states that newly adopt Medicaid expansion has made expansion more attractive for states. Under the American Rescue Plan Act states that newly adopt expansion are eligible for an additional 5 percentage point increase in the state’s traditional FMAP for two years, resulting in a temporary net fiscal benefit for these states. This fiscal incentive was key in moving expansion forward in North Carolina. KFF had estimated that Mississippi could realize a net fiscal benefit of $690 million over two years if expansion had been implemented in 2022; however, the fiscal incentive is available for two years whenever a state adopts expansion.
Provider organizations in the state, including the Mississippi State Medical Association and Mississippi Hospital Association, have been supporters of expansion. A KFF review of studies on the economic impact of Medicaid expansion on providers identified positive economic impacts for providers (particularly rural hospitals), in line with prior research.
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