House panel approves Medicaid flexibility bill

A House subcommittee voted Thursday to let states cut their Medicaid rolls despite unified Democratic opposition and amendments designed to highlight the bill’s potential effect on children and the elderly.

The bill would repeal “maintenance of effort” (MOE) provisions in the new healthcare law, which prevent states from reducing Medicaid eligibility before 2014. Republicans on the House Energy and Commerce health subcommittee touted the measure as a way to provide needed flexibility to the states as they face severe budget shortfalls.

The subcommittee passed the bill by a party-line, 14-9 vote.

Democrats on the panel offered amendments that would have kept current eligibility rules in place for specific, sympathetic groups — children, seniors in nursing homes and pregnant women.

The Congressional Budget Office (CBO) estimated that children would make up roughly two-thirds of the people who would lose coverage if the MOE requirements are repealed. States could drop as many as 1.7 million beneficiaries from the Children’s Health Insurance Program in 2016, CBO said.

Similarly, elderly Medicaid beneficiaries who also receive Medicare benefits are an especially costly group. Many opponents of the MOE repeal say states would likely turn to those patients for the biggest savings.

Subcommittee Republicans emphasized that the bill doesn’t tell states where to make cuts, or even require them to make any. But with many states facing budget caps, they said, governors need flexibility to find some savings in Medicaid, rather than keeping coverage at its current levels and cutting more deeply into other programs.

Democrats’ amendments tried to “tug at the heartstrings of the American public,” but the coverage requirements are “tugging at the purse strings” of state governments, said Rep. Phil Gingrey (R-Ga.), the bill’s lead sponsor.

Although all of the Democrats who attended Thursday’s markup voted against the MOE bill, Medicaid advocates worry that opposition might be stifled by the stronger emphasis on Republican proposals to convert federal Medicaid funding to block grants. And Medicaid in general is less of a political lightning rod than Medicare, to which House Republicans have also proposed drastic changes.

---