Moving to Modified Adjusted Gross Income (MAGI)

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1 MAGI Conversion: An Overview Penny Thompson Deputy Director Center for Medicaid and CHIP Services January 7, 2013 Moving to Modified Adjusted Gross Income (MAGI) Beginning on January 1, 2014 states must use modified adjusted gross income (MAGI)-based methodologies to make Medicaid and CHIP eligibility determinations Streamlines income counting rules for Medicaid & CHIP and aligns them with rules that will be used in the Exchange MAGI will be used for most Medicaid/CHIP enrollees, including children, pregnant women, parents, and the new adult group 1

2 MAGI and MAGI Exempt MAGI will not apply to elderly and disabled populations (See Eligibility Groups in 2014 ) MAGI must be used regardless of whether a state proceeds with the Medicaid expansion Key element is discontinuation of use of disregards for various populations Levels the playing field and simplifies rules for states and for families MAGI Conversion Guidance Released on December 28, 2012; available on State options for executing conversions -- Standardized MAGI Conversion approach -- State-proposed alternative methodology Technical assistance available Timeline 2

3 Standardized MAGI Conversion Methodology For each eligibility group, calculate average size of disregards for people with income within 25 percentage points of FPL below the net income standard Add this average disregard (expressed as a percentage of FPL) to the net income eligibility standard For example, current income standard is 80% of FPL; calculate average disregard for individuals with net income between 55 80%; average disregard = 7% MAGI-based income standard = 87% of FPL Why did CMS choose this methodology? CMS tested several different methodologies based on work with 10 pilot states, public comments on white paper, and broader feedback from states Methods were tested against the ACA statutory objective to establish a MAGI-based income eligibility standard that is not less than the effective income eligibility standard on March 23, 2010 In the aggregate, the standard should not systematically increase or decrease overall eligibility 3

4 Data Source Options States can implement the standardized methodology in two ways: National survey data: CMS will perform the conversions for all states using the Survey of Income and Program Participation (SIPP) Weighted to adjust for each state s demographics MAGI conversion plans receive pro forma approval State data: Implement the methodology using state data CMS will provide technical assistance but will not perform conversions for states using state data CMS will need to review and approve conversion plans What is the SIPP? Nationally recognized data source administered by the United States Census Bureau Contains detailed information on cash and non-cash income types, household composition, familial relationships, and other relevant variables Adjusted to account for state demographics CMS will use the SIPP to model disregard rules, household composition, and income counting rules currently used to assess Medicaid eligibility for each applicable group in every state 4

5 Alternative MAGI Conversion Methodology States can propose to use an alternative methodology for MAGI conversion Limited technical assistance available CMS will review, provide feedback and approval/disapproval Conversion plans for alternative approach may be submitted on a rolling basis, no later than April 30, 2013 Timeline and Key Dates Jan. 15, 2013: Deadline for comments on MAGI conversion templates Feb. 15, 2013: States submit statements of intent indicating which MAGI conversion methodology they will use February April 2013: SIPP-based conversions completed and provided to states April 30, 2013: Deadline for submission of Conversion Plans for standardized methodology using state data & alternative state proposal option May 31, 2013: Final deadline for submitting MAGI Conversion Plans to CMS June 15, 2013: CMS will provide notice of approval/disapproval for all Conversion Plans 5

6 MAGI Conversion Plans MAGI conversion plans required by statute For standardized methodology, plan will include Information from state s MAGI conversion template & confirmation that state intends to use CMS-derived MAGI-based standards or its own administrative data CMS approval of MAGI conversion plan will be pro-forma when we perform the conversion with SIPP data CMS will provide additional guidance on format of alternative Conversion Plans in the near future For more information Slides, guidance and Eligibility Groups in 2014 on also posted on CALT Questions for CMS: IncomeConversion@cms.hhs.gov SHADAC Technical assistance requests: (612) Next webinar: MAGI Conversion Understanding SIPP Thursday, January 10th 4:30 5:30 p.m. EST 2 additional webinars TBA How To on using state data and additional discussion of alternative conversion methodologies 6