U.S. Rep. Cathy McMorris Rodgers, R-Wash., this week introduced a Republican proposal touted as a way to corral Medicaid spending by giving states more say in who qualifies and who doesn’t.
Medicaid, an entitlement program that helps pay the medical bills of millions of poor and disabled people, has grown in scope and expense.
States match federal dollars to fund the program, but its costs are weighing on states that are struggling with huge budget gaps, such as the $5 billion shortfall facing Washington state.
McMorris Rodgers said her bill would fundamentally change the program by giving states broader discretion on eligibility standards.
Democrats say the plan is just another attempt to strip medical help from the poor.
The bill has yet to find any Democratic support, acknowledged Todd Weiner, a spokesman for McMorris Rodgers.
Called the State Flexibility Act, the bill would repeal a Medicaid requirement called “maintenance-of-effort,” which was included in the controversial federal health reform legislation passed last year. The provision attached strings to extra federal Medicaid dollars needed by the states, requiring them to agree not to tighten eligibility standards for people enrolling in the program.
Those requirements have chafed governors in some states.
Because Medicaid is such a large part of state budgets, Republicans say states have to make exceptionally deep cuts in other programs.
In a prepared statement, McMorris Rodgers singled out Washington state and noted that Gov. Chris Gregoire has called for more flexibility in managing Medicaid in the face of the state’s budget crisis. McMorris Rodgers’ statement went on to say that the main driver of that deficit is Medicaid spending.
Gregoire has yet to review the bill, according to her staff, “but is not interested in denying working families access to health care.”
Although Gregoire has called for flexibility, her office said it was in the context of searching for Medicaid savings without limiting access.
Furthermore, the state’s Office of Financial Management said blaming Medicaid for the state’s projected budget deficit is a stretch.
“We think it’s safer to say that state medical assistance programs are one of the major drivers behind the projected $5.1 billion shortfall,” said OFM spokesman Ralph Thomas.
While McMorris Rodgers and Rep. Phil Gingrey, R-Ga., introduced the bill in the U.S. House this week, a similar version was introduced by Sen. Orrin Hatch, R-Utah, in the U.S. Senate.
Medicaid spending is a quandary for health care providers. Reimbursements are widely panned as too low, and yet in cities like Spokane where poverty rates are high, the program ensures hospitals and clinics receive at least some payment for treating the poor.
Eligibility cuts that could follow a repeal of the federal “maintenance-of-effort” requirement as sought by the bill are worrisome because they might inflate the number of uninsured, some health care groups wrote in a letter to U.S. health Secretary Kathleen Sebelius.
McMorris Rodgers opposed federal health reforms signed into law by President Barack Obama.