The government has issued a notice that states that expand Medicaid to more low-income Americans will be required to pay more for their coverage, starting Jan. 1.
Under the notice, the Centers for Medicare and Medicaid Services (CMS) is telling states that if they do not comply with the rules by that date, the Medicaid expansion will be “substantially less expensive” and that those states will be able to reduce the amount of coverage they offer to lower-income enrollees.
The announcement comes as many states have pushed to extend Medicaid to cover more people and as many Republicans in Congress are pushing to cut off federal money to states that fail to comply.
The CMS notice says that states must make payments for up to $300 billion in Medicaid expansion costs, or about 3.3 percent of the state gross domestic product (GDP).
States will be subject to an additional 2.9 percent of Medicaid expansion expenses.
States will also be required, beginning in 2020, to make payments to cover about 1.8 million fewer uninsured individuals and reduce the number of Medicaid beneficiaries by at least 25 percent.
States that do not make these payments by Jan. 3 will face a 1.9-percent reduction in Medicaid payments over the next decade.
If states fail to make these payment reductions, CMS says, they will be liable for up, or nearly, $3.2 trillion in payments.CMS has issued more than 200 notices to states about how they will comply with Medicaid expansion rules, but it did not specify how the payments would be made.
A number of states have raised their eligibility for Medicaid, as part of an effort to lower their cost of providing health care to people in the states that expanded Medicaid.
States have also been trying to figure out how to comply with federal rules requiring them to pay for Medicaid expansion and whether they would have to pay back any federal dollars that they receive.
As part of their negotiations with CMS, states are expected to negotiate with the federal government over how they should be reimbursed under Medicaid.
The White House has said it would like states to pay a smaller share of Medicaid costs for low- and moderate-income people, but has also said that states should be able pay their share of the costs.
In the past, states have been able to opt out of Medicaid expansions.
In an earlier CMS notice, CMS said that while states would be required by Jan., 2020, not to exceed the percentage of Medicaid expenses they were expected to pay, states would not be required under the notice to provide a specific dollar amount for each state’s Medicaid expansion.
Under those rules, states must pay Medicaid for their share, CMS explained.
States must also report to CMS by Jan, 2021 how many of the enrollees they expect to receive Medicaid by the end of the period covered by the notice and how many enrollees would have access to Medicaid if they were able to enroll.
If the states do not provide a certain amount of information by Jan 3, the notice states, CMS will make a determination on the extent to which states will comply and then take enforcement action.