Bill could let states restrict Medicaid eligibility

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Rep. Phil Gingrey (R-GA)
Rep. Phil Gingrey (R-GA)

States could limit eligibility to Medicaid and the Children's Hospital Insurance Program if a Republican-sponsored bill in the House and Senate passes.

Rep. Phil Gingrey (R-GA) and Sen. Orrin Hatch (R-UT) introduced the State Flexibility Act (H.R. 1683 and S. 868, respectively) on Tuesday. They say it is aimed at helping states with troubled Medicaid budgets. The legislation would repeal an Affordable Care Act provision that says states can receive increased funding for Medicaid if they agree not to reduce eligibility requirements below their February 2009 levels.

Hatch, who said he expects the bill to have bipartisan support, called the maintenance of effort requirements “a poison pill for states from day one — limiting their ability to lower Medicaid spending and balance their budgets.”

In a preliminary analysis, the Congressional Budget Office found that, although eliminating the MOE provision would lower the federal deficit by $2.1 billion from 2012 to 2021, it would increase the number of uninsured individuals by 300,000 depending on the year. Additionally, a February report from The Georgetown Center for Children and Families found that 2.8 million low-income seniors are covered under a state option that would be cut if MOE rules were eliminated, the Bureau of National Affairs reported. Numerous provider groups sent a letter to HHS Secretary Kathleen Sebelius in March stating their support for the MOE requirement. They include the American Hospital Association, the Association of Medical Colleges, the Catholic Health Association, the Federation of American Hospitals, the National Association of Children's Hospitals, the National Association of Public Hospitals and Health Systems, and VHA.
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