The Affordable Care Act (ACA) requires states to maintain their current Medicaid and Children’s Health Insurance Program eligibility standards until new Medicaid eligibility standards take effect and state-based health insurance exchanges are up and running. These “maintenance of effort” (MOE) provisions were included in the ACA to protect low-income individuals from losing coverage during health reform implementation. The Medicaid MOE provision requires a state to maintain its current Medicaid eligibility standards and application and renewal procedures for adults until January 1, 2014. The provision also requires states to maintain their Medicaid eligibility standards and application and renewal procedures for children until October 1, 2019. The CHIP maintenance of effort provision requires that states maintain their CHIP eligibility standards and application procedures until October 1, 2019.
This week, citing state budget crises, U.S. Senator Orrin Hatch (R-Utah), introduced legislation (S.868, the State Flexibility Act) to repeal the Medicaid MOE provisions. U.S. Reps. Phil Gingrey (R-Ga.) and Cathy McMorris Rodgers (R-Wash.) have introduced companion legislation (H.R. 1683) in the House of Representatives.
Repealing the Medicaid MOE provisions would likely result in an increase in the number of Americans who are uninsured, as states scaled back eligibility for low-income children, parents, seniors, and people with disabilities. The MOE protections require states to hold steady on Medicaid and CHIP coverage, and refrain from imposing new administrative barriers to enrollment. Our colleagues at Center on Budget and Policy Priorities have issued a report explaining the consequences of repealing the MOE protections, which can be found here. As the report notes, during the recession of the early 2000s, some 34 states cut back Medicaid and CHIP eligibility, causing 1.2 million to 1.6 million low-income adults and children to lose coverage, before Congress acted to prevent states from making further eligibility cuts as a condition of receipt of federal fiscal assistance enacted in 2003.
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