The maintenance-of-effort requirements for Medicaid were first included in the American Recovery and Reinvestment Act of 2009 and then expanded last year in the Patient Protection and Affordable Care Act. Under this provision, states can receive increased funding for Medicaid if they agree not to reduce eligibility requirements below their February 2009 levels. But Republicans in both chambers of Congress argue that the requirements are onerous to states, which are demanding more flexibility to manage their programs.
In Pennsylvania, Medicaid now accounts for 31% of the state's budget, and that could grow to as high as 60% by decade's end due to the expansion outlined in the Affordable Care Act, Rep. Joe Pitts (R-Pa.), chairman of the House Energy and Commerce Health Subcommittee, said at a news conference in the Capitol Tuesday. And because increased federal funding won't cover the entire expansion, Pennsylvania will need to find an additional $2 billion to cover expenses. He said that equals the combined funding of more than a dozen of the state's departments—including agriculture, community and economic development, and the judiciary and legislative branches of government.
As a result, Pitts said, basic government functions will be affected. “Our legislation will grant at least some level of flexibility for state governments. We want states to be able to provide this critical service, and state legislators want to run good programs that improve the quality of life for their constituents,” he added. “And we should remember that Washington doesn't always know best.”
Meanwhile, Sen. Mike Johanns (R-Neb.), a former governor, said the legislation will provide governors with more flexibility to manage their budgets. He also portended what could happen if such action isn't taken.
“Having been down this road so many times before, I can tell you what happens. Providers are cut,” Johanns said at the same news conference. “Year after year after year, these are doctors and hospitals that are already providing medical care below the cost of that care. And so they are already going broke trying to provide Medicaid services. It's not accidental that 40% of our doctors across the country don't take Medicaid patients.”
In early March, several healthcare associations sent HHS Secretary Kathleen Sebelius a letter saying they opposed repealing maintenance-of-effort requirements because, they said, doing so would transfer many low-income Americans off Medicaid and raise the number of uninsured—as well as increase the burden on providers.