By Martha Heberlein

In the past few years, Medicaid and CHIP coverage has held remarkably steady despite the weak economy and significant state budget problems.  As a result, it has meant that public programs have been able to offer coverage to low-income children and families facing job loss, help to seniors in need of long-term care, and services and supports to people with disabilities that allow them to live in the community instead of ending up in nursing homes.  This stability can be directly linked to the stability protections in the American Recovery and Reinvestment Act (ARRA) and the Affordable Care Act (ACA); protections that ensure states do not adopt more restrictive eligibility rules or enrollment procedures.

Recently, a number of states have asked Congress to repeal the protections. If they are rescinded, states could eliminate Medicaid for anyone who is covered at state option and could cut back or even entirely eliminate their CHIP programs.  A new fact sheet prepared by CCF, The Medicaid and CHIP Stability Protections: Consequences of Repeal, outlines who would be at risk under a rescission.

A quick look at just who might lose out:

• A young girl with asthma whose parents cannot afford the $13,770 it would cost to buy family coverage, pay premiums of $27 a month to enroll her in the state’s CHIP program. If the stability protections are rescinded her coverage, and that of 14.1 million children covered at state option in Medicaid and CHIP, could be at risk.
• A parent of two children who works at a job that does not provide health insurance coverage, but lives in a state that provides expanded Medicaid coverage. She, as well as the close to 8 million other adults covered at state option are particularly vulnerable to cuts, even though most of their coverage options are already extremely limited.
• An elderly grandmother who lives in a nursing facility and has an annual income just above SSI standards. Her coverage, as well as that for 2.8 million low-income seniors and 2.3 million people with disabilities, would be at risk if the stability protections for “optional” Medicaid populations are repealed.

The new fact sheet also finds that states could indirectly cut coverage by adding red-tape barriers.  For example, they could again begin requiring parents to visit a welfare office to enroll their children in coverage, even if it means they must miss work or travel significant distances. Such “backdoor” strategies reduce enrollment and impact everyone who relies on Medicaid, including the very lowest-income people.

Finally, the fact sheet notes that cuts to Medicaid translate into significant declines in state business activity and jobs, particularly in the health sector, slowing economic recovery. As states face ongoing budget problems, is it really wise to slash programs that bring in federal matching money, as well as a boost to local economies?

If Congress repeals the stability protections, coverage for millions of low-income children and families, seniors and people with disabilities, not to mention the nascent economic recovery, would be at risk.