CMS Issues Guidance on Medicaid and CHIP for Lawfully Residing Residents - July 7, 2010

On July 1, CMS issued a State Health Official letter on the provision in the Children’s Health Insurance Reauthorization Act that permits coverage to be extended under Medicaid and CHIP to certain children and pregnant women “lawfully residing in the United States.” The guidance clarifies what it considers to be “lawfully residing,” building on definitions already found in Department of Homeland Security regulations for Title II Social Security benefits. The letter also provides guidance on how states should make eligibility determinations, and clarifies that states electing to provide such coverage may submit a state plan amendment under Medicaid only or under both Medicaid and CHIP. Finally, the letter notes that claims paid on behalf of newly eligible children will be matched at enhanced CHIP federal financial participation (FFP) rates, although Medicaid-eligible individuals for whom the state receives CHIP-enhanced FFP must be claimed at the Medicaid FFP rate once a child has met the five-year waiting period for Medicaid eligibility. For all others receiving Medicaid coverage, including those ages 19 to 21 and pregnant women, FFP is available at the Medicaid matching rate.