The House Energy and Commerce Subcommittee on Health took the first step toward unraveling the remarkable success our nation has achieved in connecting kids with coverage and driving uninsurance rates for children down to a historic low. Today the Subcommittee approved “The State Flexibility Act” (H.R. 1683), a bill introduced by Representative Gingrey (R-GA) that would repeal the Medicaid/CHIP stability protections (aka “maintenance-of-effort requirements”) that have helped preserve the lifeline of health care coverage during tough economic times. A wide range of groupsincluding AARP, religious organizations, pediatricians, nurses and public hospitals, wrote to the committee to express their opposition to the bill which passed on a party-line vote (14-9).
As is generally the case when it comes to debating the merits of Medicaid, there was a lot of misinformation tossed around. Of course there were those who wanted to scapegoat Medicaid for state budget woes with gross exaggerations about its impact on state budgets. Ranking Member Pallone (D-NJ) rightly pointed out that the Recession caused the state budget troubles not Medicaid and CHIP. He explained that states had other options for addressing their Medicaid budgets such as innovations in delivery systems to negotiating more aggressively with health insurers and the pharmaceutical industry. Pallone and other members of the committee also explained that the costs won’t go away, they will simply be shifted to others such as doctors, hospitals, local communities and those who can least afford it.
Some members of the committee tried to raise a favorite red herring that the stability protections somehow prevented states from combating fraud. (Readers of Say Ahhh! will recall that FactCheck.org soundly refuted the claims made by Governor Barbour before the health committee on this point.) Full Committee Ranking Member Henry Waxman (D-CA) assured the other side of the aisle that he would be happy to work with them to make sure states had the tools needed to address fraud if that indeed were the case.
Three amendments were offered to the legislation to exempt various groups from the repeal of the stability protections. The amendment offered by Rep. Pallone would exempt children. An amendment offered by Rep. Lois Capps (D-CA) would exempt those with disabilities and seniors in need of nursing home care and a final amendment offered by Rep. Elliot Engel (D-NY) would exempt parents with dependent children living with them. All three amendments were defeated.
The next stop for this legislation will be full committee then the House floor. Senator Hatch (R-UT) has introduced a companion bill in the Senate. There is no word on whether or not that bill will be taken up but it’s quite possible that the measure will be considered as part of the deficit reduction negotiations along with other proposals that would be devastating to Medicaid and CHIP such as a global spending cap or block grant.
My colleague Jocelyn Guyer explained that CBO estimates that half of the states will eliminate their CHIP plans if this legislation is approved. Direct cuts are not the only avenue states may pursue if the stability protections are repealed. States could also turn back the clock on all the progress that has been made on improving government efficiency in the Medicaid and CHIP application and renewal processes. For example, states that long ago abolished such backward practices could once again require families to:
- Re-establish eligibility for their child’s coverage every three to six months instead of once a year.
- Visit an agency office for an in-person interview instead of signing their child up for coverage online or by mail.
- Face a deluge of excess paperwork and have to provide multiple pay-stubs to document income even when the state already has reliable data available to verify the family’s income.
While many states realize that directly cutting eligibility levels will open them up to intense public scrutiny, several could use equally harmful methods of cutting off access to coverage by erecting administrative roadblocks between eligible children and families and needed coverage. With children and families still struggling to gain a foothold after turbulent economic times, this is no time to open the floodgates and wipe away access to health care.
