By Martha Heberlein

Way back in May, CMS put out guidance on five strategies designed to make it easier for Medicaid-eligible folks to connect to coverage. You’ve probably heard that several of these have been incredibly successful, including in Arkansas and California. And while 35 states have picked up one or more of the five, there’s been one strategy – 12-month continuous eligibility for adults – that no state has yet picked up.

Now if you read that guidance closely, you may have gotten a sense of why – while many of these adults may be considered “newly eligible” states are not able to secure 100% federal match for these adults for their full year of coverage. This is because the newly-eligible matching rate is only available for individuals who meet the statutory eligibility requirements for that group. As such, it is not available for those who remain enrolled, but whose income or other eligibility criteria changes over the year making them no longer eligible under the category.

Despite this caveat, CMS offered to work with states on how to apply the appropriate FMAP and last week they shared more details on how it will work.

Analysis from George Washington University (done for the Association of Community Affiliated Plans) has shown that, on average, children were enrolled for 80% of the fiscal year; however, with continuous eligibility, this “continuity ratio” improved to 82%. CMS assumes that adults would experience the same increase, although starting from a lower point – for an improvement in continuity from 75% to 77%.

Based on these data, CMS has concluded that for the newly-eligible population, 97.4% of the member months could be matched at the enhanced rate (i.e., 100% in 2014), and 2.6% of the member months would be matched at the regular FMAP. This adjustment would account for the proportion of the year that consumers would have been disrenrolled in the absence of continuous eligibility because of excess income.

Now, as my colleague, Joan, pointed out when Arkansas originally included the option in their waiver, this is a “thoughtful innovation” and would ensure that adults would remain eligible throughout the year, even with a small change in income. Perhaps this guidance on the slight decrease in matching rate will inspire Arkansas, and others, to reconsider extending coverage for 12-continuous months to adults.