Repealing Health Reform’s Medicaid Provision Would Weaken Coverage, Not Fight Fraud

April 24, 2012 at 1:06 pm

The House Energy and Commerce Committee will try again this week to repeal a part of health reform that requires states to maintain their current Medicaid and Children’s Health Insurance Program (CHIP) programs until other parts of the law take effect.

Contrary to critics’ claims, these “maintenance-of-effort” (MOE) requirements don’t interfere with ongoing state efforts to fight Medicaid fraud.  And the Congressional Budget Office (CBO) estimates that repealing them would cause 300,000 more people to be uninsured in 2015 than under current law.

Under the MOE provisions, states must keep their current Medicaid eligibility rules for adults until 2014, when new, nationwide Medicaid eligibility rules will take effect and state-based health insurance exchanges will begin operating.   States must also maintain their Medicaid and CHIP eligibility rules for children until 2019.

CBO’s analysis of an effort to repeal the MOE last May explained that the vast majority of those who would become uninsured would be children.  That analysis also found that half of the states would terminate their CHIP programs by the end of 2016 and others would cut back CHIP eligibility levels.

Repeal would also put coverage for many seniors and people with disabilities at risk, as our report on this issue last year explained.  These individuals could lose critical home- and community-based services that keep them out of institutions.

As my colleague Sarah Lueck explains, the provisions do not affect any of the tools and initiatives that states and the federal government use to combat fraud and abuse and recover misspent funds.  In fact, anti-fraud activities have increased since Congress enacted the MOE as part of health reform.  Nor does the MOE affect ongoing efforts to identify and remedy Medicaid payment errors that don’t involve fraud or abuse.

In short, repealing the MOE provisions wouldn’t make Medicaid more efficient, and it would mark a big step backward for one of health reform’s core goals: preserving and expanding affordable health coverage.

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More About Judy Solomon

Judy Solomon

Solomon is Vice President for Health Policy at the Center on Budget and Policy Priorities, where she focuses on Medicaid and the Children’s Health Insurance Program and issues related to the implementation of health reform, particularly policies to make coverage available and affordable for low-income people.

Full bio | Blog Archive | Research archive at CBPP.org

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