The latest legislative initiative aimed at cutting Medicaid and CHIP growth began to advance last week. That legislation, sponsored by Rep. Phil Gingrey (R-Ga.), a physician, would allow state governments to reduce their Medicaid and CHIP enrollments as a way to close state budget deficits. States are barred from cutting their enrollments below levels raised with the help of one-time funding provided through the 2009 American Recovery and Reinvestment Act, which is known as the maintenance-of-effort requirement.
“Nearly every governor has asked for either repeal or flexibility in maintenance of effort,” Rep. Michael Burgess (R-Texas) said Thursday before the first congressional panel voted to advance the maintenance-of-effort legislation.
The comment was based on the request of 33 Republican governors, who wrote HHS Secretary Kathleen Sebelius in January to ask that she lift the enrollment requirement. Also, Washington Gov. Christine Gregoire, a Democrat, and Republican Nebraska Gov. Dave Heineman, leaders of the National Governors Association, wrote congressional leaders in January on behalf of all governors to urge them not to impose the requirement on states as a condition of receiving federal funding.
The approval of the bill in a party-line vote by the Energy and Commerce Health Subcommittee came only a week after it was introduced. That pace—light-speed compared with other high-profile healthcare bills—indicated to some that the bill may pass the House relatively soon.
The Obama administration and most congressional Democrats strongly oppose the measure, which they said would only result in the loss of coverage for Medicaid and CHIP enrollees and pass the cost of their care on to hospitals, other providers and, ultimately, taxpayers.
“If these protections are rescinded, then the coverage of up to one-third of Medicaid and CHIP are at risk,” Rep. Frank Pallone (D-N.J.) said before the subcommittee's vote.
Pallone and other Democrats said such enrollment cuts would drive more of the uninsured to hospital emergency rooms, which are required to treat them. Providing such uncompensated care in a relatively expensive setting will force hospitals to pass along added costs to the privately insured and taxpayers, according to Democrats.
“Cuts in Medicaid will just mean costs are transferred to hospital ERs, which everyone else pays for,” said Rep. John Dingell (D-Mich.).
Similar concerns about unintended consequences were voiced by many hospital representatives. Seven of the largest hospital groups and associations wrote Sebelius on March 1 specifically warning against efforts to lift the states' Medicaid enrollment requirements.
“Removing people from Medicaid does not keep them from getting sick and will deter them from seeking the care that they need,” the groups, including the American Hospital Association and Federation of American Hospitals, wrote. “Further, it shifts the burden of their care from states and the federal government largely onto the nation's hospitals.”
Such a move only would increase the $40 billion in uncompensated care that hospitals already provide, according to the hospital groups. Republicans countered that forcing states to maintain Medicaid coverage expanded by now-depleted federal stimulus funds will leave few options other than continued cutting of provider reimbursement.
Other Medicaid overhaul efforts include plans to convert the program to fixed block grants that would grow at a set rate or to subject the program to across-the-board cuts through so-called deficit triggers. Some hospital advocates said the bill to roll back the maintenance-of-effort requirement appears most likely to receive congressional and presidential approval—though Senate Democrats have vowed to block it—if it becomes part of a deal to raise the debt ceiling.