Republicans Introduce Legislation to Lighten Medicaid Maintenance of Effort Load

Published May 31, 2016

House Republican Conference vice chair Rep. Cathy McMorris Rodgers of Washington State, Georgia Republican Rep. Phil Gingrey, and Utah Republican Sen. Orrin Hatch recently introduced legislation they say will remove “onerous” Medicaid funding requirements for the states.

The proposal, titled The State Flexibility Act, repeals the Medicaid Maintenance of Effort (MOE) requirements included in the stimulus bill and Obamacare. But unlike other legislative reforms targeted at President Obama’s health care law, Hatch, McMorris Rodgers, and Gingrey expect this proposal to get broad bipartisan support.

“If they [Democrats] care for their citizens and they care for their budgets, they’re going to be with us on this,” Hatch told reporters at a press conference. “This is not a partisan bill.”

Yet the sponsors are leading Republicans, including House Energy and Commerce chairman Rep. Fred Upton, Wyoming Sen. John Barasso, House Energy and Commerce Health Subcommittee Chair Joe Pitts of Pennsylvania, and Tennessee Sen. Lamar Alexander, each of whom has signed on as a cosponsor.

“The federal government has literally said the states have to spend money the states don’t have,” Alexander said. “The end result of that? They have to find it somewhere else.”


Support for State Reforms

Americans for Tax Reform president Grover Norquist says he supports the legislation.

“This is a particularly bad time for states to be prevented from enacting meaningful reforms, since they face a collective overspending problem of $175 billion, and Medicaid now consumes 22 percent of state budgets,” Norquist said. “It’s essential that Medicaid be put on the table as states grapple with reining in the overspending of past years.”

According to a fiscal survey of the states by the National Governors Association, Medicaid consumes an average of 22 percent of state budgets.

“Failure to reform Medicaid in a way that relieves future generations of unfunded spending promises is irresponsible, but Washington telling states they cannot enact these reforms is even worse,” Norquist said.


Giving States Flexibility

McMorris Rodgers says the legislation will allow governors flexibility when making their budgets. She said, “Everyone recognizes Washington has been spending outside its means.” But she points out that a lot of states have, too.

“One big cost driver for every state has been the Medicaid requirement coming out of Washington, DC,” McMorris Rodgers said. “In my state of Washington, [Democrat] Gov. [Chris] Gregoire’s budget has taken, like in many other states, a $5 billion shortfall. When I sat down and talked to her about Medicaid, in particular, she said, ‘What we need, Cathy, is flexibility.'”


Matthew Boyle ([email protected]) is a contributing reporter at The Daily Caller, where this article first appeared. Reprinted with permission.