Energy and Commerce Committee Approves Repeal of MOE

Continuing last week’s action on reconciliation packages, the House Energy and Commerce Committee held a markup yesterday which included provisions to repeal key aspects of the Medicaid program. One provision would repeal the Maintenance of Effort (MOE) requirement currently required of states under the Affordable Care Act of 2010 (ACA). Another would repeal bonus payments for states that increase their Medicaid enrollment. The proposal was approved by the Committee by a vote of 30-20.

The MOE requirement was mandated by the ACA and prohibits states from implementing eligibility standards or procedures that are more restrictive than those in effect on March 23, 2010. Proponents for repealing the MOE claim that eliminating it would allow states the flexibility they need to operate the Medicaid and Children’s Health Insurance Program (CHIP) as they see fit, and would save $600 million over ten years.

In a related move, last month, Representatives Todd Rokita (R-IN), Tim Huelskamp (R-KS), Paul Broun (R-GA), and Jim Jordan (R-OH),  introduced the State Health Flexibility Act, H.R. 4160, which would block grant the Medicaid program and repeal certain Medicaid and State Children’s Health Insurance Program (CHIP) maintenance of effort requirements (via repeal of the ACA), thereby allowing states to drop hundreds of thousands of children from their Medicaid and CHIP rolls. Ensuring a MOE is important to vulnerable children and their families because as many may recall, prior to the enactment of the ACA, Arizona Governor Jan Brewer signed a budget package into law that would have effectively eliminated the state’s CHIP program. When the Center for Medicare and Medicaid Services notified the state that the recent action would be in direct violation of the MOE provision in the ACA, and thus the state stood to lose close to $8 billion in Medicaid funds, Governor Brewer singed a bill to restore the KidsCare program. However, because Arizona had a freeze on CHIP enrollment prior to the enactment of ACA, they remain the only state with an active freeze on CHIP enrollment to date.

Prior to the ACA, the Children’s Health Insurance Reauthorization Act of 2009 (CHIPRA) authorized “bonus” payments to states for increasing their Medicaid enrollment above a defined baseline from the prior year. Despite the fact that statistics show that participation rates for children in Medicaid and CHIP are at about 85% nationally, with some states garnering participation above 95%, yesterday, the Committee approved a proposal to repeal bonus payments to states, claiming that the bonus program weakens the integrity of Medicaid. Proponents of this proposal assert that repealing these bonus payments will save approximately $400 million over ten years.

According to a memo from Republican House Leadership, the House is expected to consider a joint reconciliation package in early May.

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