Medicaid might be a better target for cuts than Medicare

With major changes to Medicare likely on hold for the time being, advocates say the GOP has Medicaid “in its sights” as a more realistic place to make healthcare spending cuts. 

The leaders of two leading advocacy organizations told The Hill that they expect the House Energy and Commerce Committee to move quickly on a bill that would let states set new Medicaid eligibility rules. The bill, introduced last week, would repeal “maintenance of effort” requirements (MOE) in the healthcare reform law, which block states from cutting their Medicaid rolls ahead of the program’s expansion in 2014.

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“I’ve always worried that Medicare and Social Security would go off the table and Medicaid would be the only thing left standing,” said Bruce Lesley, president of the children’s advocacy group First Focus.

An Energy and Commerce Committee spokeswoman said no markup has been scheduled.

More than $1.3 trillion of the savings in Rep. Paul Ryan’s (R-Wis.) budget proposal would come from Medicaid. So far, those plans haven’t attracted the same political furor as the budget’s Medicare components. Some Democrats have been blunt about the reason: Seniors vote in large numbers, whereas Medicaid primarily serves children and the poor. 

“Medicaid cannot fly under the radar,” Families USA Executive Director Ron Pollack told The Hill. 

Roughly 100 Medicaid advocates met with congressional Democrats in March to plot a strategy for defending the program. And there were indications last week that advocacy groups and some Democrats are beginning to mobilize against the GOP budget’s proposal to convert federal Medicaid funding into block grants for states, though it hasn’t energized Democratic leadership as much as the Medicare proposal. 

With Republican Medicare proposals facing an unlikely future and pro-Medicaid groups focused on block grants, the MOE bill might find an opening.

“Today, in the short term, I think lifting the MOE is a real concern,” Lesley said.

First Focus and Families USA oppose both Medicaid proposals. Either one would be “all about rationing care and cutting people off of coverage,” Lesley said.

Governors have pressed hard for the MOE repeal, saying they simply can’t afford to maintain their Medicaid enrollment levels without making major cuts in other areas. The Congressional Budget Office estimated that roughly 300,000 people would lose coverage as a result of eliminating the MOE requirements, while the federal government would save $2.8 billion over the next five years.

The biggest cuts in federal spending would come from the Children’s Health Insurance Program, followed by Medicaid itself. CBO said those reductions would be offset, however, as people who lost Medicaid or CHIP coverage moved into the newly created insurance exchanges and received federal subsidies for private insurance.

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