1. Kaplan, Louise PhD, ARNP, FNP-BC, FAANP

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One component of the June 2012 Supreme Court ruling on the Patient Protection and Affordable Care Act (PPACA) was that Congress may not penalize States that choose not to participate in an expansion of Medicaid to cover adults with incomes up to 133% of the federal poverty level (FPL).1 Many nurse practitioners (NPs) provide care to Medicaid patients; however, there are specifics of the program with which some NPs are unfamiliar. This article provides an overview of the Medicaid program and how the Medicaid expansion may affect NP practice.


What is Medicaid?

Medicaid was enacted in 1965 by the federal government to provide health coverage to the poor and disabled. It is administered by the states under federal guidelines and jointly funded by the states and federal government. An estimated 67.7 million people were covered by Medicaid for at least 1 month in 2010 with $404 billion in Medicaid spending during the 2010 fiscal year.2 Since 1982, all states have participated in Medicaid.3


Who is eligible for Medicaid?

Title XIX of the Social Security Act specifies who may be covered by Medicaid. These groups include pregnant women and children under 6 with family incomes at or below the FPL; children ages 6 through 18 with family incomes at or below 100% of the FPL; patients and caregiver relatives who meet certain eligibility requirements; and older adults or those who have disabilities and qualify for Supplemental Security Income benefits.4 The 2012 FPL for a family of four in the 48 contiguous states and the District of Columbia is $23,050; adjustments are made for Alaska and Hawaii.5 States have the option to cover other populations not mandated by law, and eligibility requirements vary by state. Medicaid has a website that allows individuals to determine if they are eligible for Medicaid or a different type of health insurance, which can be accessed at


How is Medicaid financed?

At a minimum, the federal government pays 50% of a state's Medicaid cost. In Fiscal Year 2012 (October 1, 2011 to September 30, 2012), the maximum the federal government contributed was 74%, with an average of 57%. The federal share of Medicaid is known as the Federal Medical Assistance Percentage (FMAP). It is calculated using a formula defined in Medicaid law. The lower the average personal income in a state, the higher the FMAP,3 and the highest FMAP is in Mississippi. A list of the FMAPs by state is available at


What does Medicaid cover?

Federal law mandates that all states cover certain benefits. Note that the law does not mandate that all types of NP services are covered. Examples of mandated benefits include the following:


* inpatient hospital services


* outpatient hospital services


* Early and periodic screening, diagnostic, and treatment (EPSDT) services


* nursing facility services


* home health services


* lab and X-ray services


* physician services


* nurse midwife services


* certified pediatric and family NP services.



States have the option to cover other benefits. Although prescription drug benefits are optional, all states offer this benefit. Examples of other optional benefits include the following:


* physical therapy


* occupational therapy


* podiatry services


* speech, hearing, and language disorder services


* dental care for adults


* chiropractic services


* other practitioner services


* prosthetics


* hospice.



A complete list of mandated and optional benefits can be found at


The Medicaid expansion

The Supreme Court ruling in June only voided the section of the PPACA that would have penalized states that did not participate in the Medicaid program's expansion. In a July 10, 2012, letter to the states' governors, Secretary of the Department of Health and Human Services Kathleen Sebelius affirmed that the expansion will go forward. Eligibility for Medicaid can be extended to adults under the age of 65 with incomes up to 133% of the FPL. States will receive 100% of the cost of the expansion from the federal government from 2014 through 2016. Federal funding will then reduce incrementally to 90% by 2020, still a much higher rate than any state currently receives. States also have the flexibility to design a benefit package for these new beneficiaries.6 In addition, states will be allowed to decide whether and when to expand Medicaid as well as whether to opt-out of the expansion.7 However, if a state does not implement the Medicaid expansion between 2014 and 2016, it will not receive 100% of federal funding, which ends in 2016.3


How will the Medicaid expansion affect NP practice?

NPs who work in states that implement the Medicaid expansion may experience an increased demand to accept new Medicaid patients. This demand will coincide with the implementation of the State Health Exchanges, which will provide millions of individuals the option to purchase health insurance and also enter the healthcare system. It is estimated that at least eight states-Oklahoma, Georgia, Texas, Louisiana, Arkansas, Nevada, North Carolina, and Kentucky-will be unable to meet primary care needs from the expansion of Medicaid alone. Even if primary care capacity exists, providers may not accept new Medicaid patients.8


In states that do not expand Medicaid, individuals may continue to be uninsured. The PPACA provides premium tax credits and cost-sharing reductions to purchase a qualified health plan through the insurance exchanges only for people with income between 100% and 400% of FPL. Individuals who are not eligible for Medicaid and have an income lower than the FPL will not qualify for this assistance. NPs who serve the uninsured may continue to have uninsured patients in their practice. This may be an unintended consequence of the Supreme Court ruling.


NPs will need to decide if they will accept new Medicaid patients to provide healthcare access on a consistent basis including preventive services and care for acute and chronic problems. NPs have always been a solution to the access problem; without NPs, millions of people would go without primary or specialty care. Implementation of the Medicaid expansion will provide another opportunity to participate in solving access to care barriers. Within each individual state, every NP is urged to advocate for the expansion of Medicaid to assist the PPACA's goal to provide universal health insurance coverage.




1. Supreme Court of the United States. National Federation of Independent Business et al. v. Sebelius, Secretary of Health and Human Services, et al. p. 55. [Context Link]


2. Truffer CJ, Klemm JD, Wolfe CJ, Rennie KE.2011 Actuarial Report on the Financial Outlook for Medicaid. Office of the Actuary. Centers for Medicare & Medicaid Services, United States Department of Health and Human Services; 2011. [Context Link]


3. Kaiser Family Foundation. Medicaid financing: An overview of the Federal Medicaid Matching Rate (FMAP). 2012. [Context Link]


4. Kaiser Family Foundation. A guide to the Supreme Court's decision on the ACA's Medicaid expansion. 2012. [Context Link]


5. 2012 HHS Poverty Guidelines. [Context Link]


6. Sebelius K.Letter to the Governors. [Context Link]


7. Presentation of Cindy Mann, CMS Deputy Administrator to National Conference of State Legislatures, Medicaid and CHIP: Today and Moving Forward. 2012. [Context Link]


8. Ku L, Jones K, Shin P, Bruen B, Hayes K.The states' next challenge-securing primary care for expanded Medicaid populations. N Engl J Med. 2011;364(6):493-495. [Context Link]