Are States Using Their Extra Medicaid Federal Match to Boost Eligibility Capacity?

Recent media attention highlighting significant backlogs of Medicaid applications waiting for eligibility determinations at the state level reminded me of what I reported in this blog last April: as of October 1, 2013, states can receive a 75% federal match for ongoing operational costs associated with their new eligibility systems, including personnel. So I’m wondering whether states just pocketed the extra federal match or used it to boost capacity for processing the influx of new applications and first round of MAGI-based renewals.

How does the enhanced match help boost state capacity?

It’s simply a matter of doing the math. Prior to the enhanced match, states received a 50% match for eligibility-related activities. By boosting the federal match to 75%, every dollar spent by the state is matched three to one, not one to one. This means that states could effectively double their eligibility staff within the constraints of their existing state budget.

 

New

75/25 Match

Old

50/50 Match

State Expenditures     $10 million    $10 million
Federal Match + $30 million + $10 million
Total Available = $40 million = $20 million

 

An FAQ released by CMS clearly delineates when the 75% match applies to application, ongoing case management and renewal, including:

  • Intake – Application/data receipt
  • Acceptance – Edits, verification and resolution of inconsistences
  • Eligibility Determination
  • Outputs – Issuance of eligibility notices to customer, file updates and transactions to partners
  • Ongoing case maintenance activities including intake activities related to renewals
  • Customer service, including call center activities and outstationed eligibility worker activities related to eligibility determinations.
  • Maintenance and Routine Updates, including routine system maintenance, security updates, and other routine maintenance activities related to the eligibility determination system. 

Are states taking full advantage of the extra federal match to boost eligibility capacity? States are not required to claim the 75% match (although not doing so doesn’t make any sense). Nor are they required to maintain their current level of state funding. But some states have significant backlogs in processing new applications and most are still fine-tuning their new MAGI-based eligibility systems. Moreover, the first round of renewals based on MAGI eligibility rules will be more involved than previous or future years. States should use the enhanced federal match to boost their administrative capacity to meet these demands.

Stay tuned to Say Ahhh! for a new brief and an upcoming blog series that Martha Heberlein and I will post later this week on renewals, and why states will need more hands on deck to boost retention as they transition to MAGI-based renewals.

 

Tricia Brooks
Tricia Brooks is a Senior Fellow at the Center for Children and Families

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