On March 29, the U.S. Department of Health and Human Services (HHS) issued a final rule under which the federal government will pay the entire cost of covering newly eligible enrollees under the Patient Protection and Affordable Care Act's Medicaid expansion for the first three years of the program. The expansion, which the U.S. Supreme Court ruled last June could not be made a mandatory condition for states’ continued participation in the Medicaid program, will take effect in January 2014.

The increased federal funding, known as the Federal Medical Assistance Percentage (FMAP), will reward those states that have agreed to expand their Medicaid programs to cover individuals who have income up to 133% of the federal poverty level, or approximately $15,000 for a single adult. Beginning in 2016, the match rate will begin phasing down to an eventual 90% rate by 2020.

In a news release, HHS Secretary Kathleen Sebelius said, “Thanks to the Affordable Care Act, more Americans will have access to health coverage and the federal government will cover a vast majority of the cost.”

The rule will have a 60-day public comment period and is being published in the Federal Register on April 2.