Hatch vague on attaching Medicaid cuts to debt vote deal

Sen. Orrin Hatch (R-Utah) said Wednesday he believes he can marshal bipartisan support for a bill to let states cut their Medicaid programs, but he didn’t indicate whether the bill’s cost savings could help it find a place in a deal on the debt ceiling.

Medicaid advocates are openly concerned about Hatch’s bill, which would repeal “maintenance of effort” (MOE) provisions in the healthcare reform law that block states from cutting Medicaid eligibility before 2014.

But Hatch demurred Wednesday when asked about the prospects for a vote on his bill. Both supporters and opponents say its most likely opening could come from the trillions of dollars in cuts that Republicans want to attach to a vote on raising the debt ceiling.

In response to a question from The Hill about that strategy, Hatch said only that Congress has to be careful with the debt ceiling and that he will be “guided a lot by leadership on that.”

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Asked about the prospects for moving the MOE repeal as a stand-alone proposal, Hatch told reporters he is looking for openings and hoping to build support in the Senate. His proposal does not have any Democratic co-sponsors.

Hatch said during a speech at the conservative Heritage Foundation that the MOE requirements are strangling state budgets and tying governors’ hands at a time when they need the flexibility to cut back Medicaid eligibility. Medicaid is covering people who don’t really need it, and governors need a way to escape federal coverage mandates, he said.

“I really believe that if Democrat governors really could speak their mind and were not intimidated by the White House, that they would say the same thing,” Hatch said.

Hatch’s bill has engendered weaker opposition from Democrats than other, more dramatic Medicaid plans — and even those larger Medicaid fights are playing out in the shadow of a higher-profile clash over Medicare. Senate Democrats say they have the 41 votes needed to kill a proposal that would convert federal Medicaid funding into block grants to the states. But those assertions didn’t mention the MOE repeal.

On the other hand, even some supporters of MOE repeal say its estimated savings — $2.1 billion over 10 years — would amount to little more than a rounding error as part of a debt ceiling package that could include more than $2 trillion in cuts. And stalwart opponents like Sen. Jay Rockefeller (D-W.Va.) could mount a stronger defense of the MOE requirements if Hatch’s bill came to the Senate floor on its own.

The House Energy and Commerce Committee is expected to mark up a companion bill soon.