Modified Adjusted Gross Income: Implications for Medicaid Eligibility Systems under the ACA

 

The Affordable Care Act (ACA) introduces a new income definition--Modified Adjusted Gross Income (MAGI)--for determining Medicaid income eligibility across the country. Currently, rules for counting income for Medicaid vary from state to state, with some states allowing disregards and deductions that are not allowed in others. MAGI will standardize the calculation of income across the nation. The implementation of MAGI is complicated, however, by the requirement that each state distinguish between two different eligibility groups that will garner different federal medical assistance percentages--the newly eligible expansion population, and the previously eligible population that would have met the state's pre-ACA income thresholds. 

This brief discusses the complexities that MAGI implementation will raise for state Medicaid eligibility systems and how these issues might be addressed. 

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