On February 25, 2011, CMS issued guidance to state Medicaid directors on MOE provisions in the ACA. By way of background, the ACA’s MOE provisions generally are intended to ensure that Medicaid eligibility standards for adults remains in place pending implementation of ACA coverage changes that take effect in 2014. The new guidance provides CMS’s interpretation of three aspects of the MOE requirements: the MOE exemption for higher-income adult populations in states experiencing budget deficits; the implication of the MOE provision for states operating Section 1115 demonstration projects; and how premium increases are treated under the MOE requirements.