Vote Alert
An Open Letter to the United States Congress: Stop the One-Size-Fits-All Medicaid Rules!
May 19, 2011
Dear Member of Congress:
On behalf of the
362,000 members of the National Taxpayers Union (NTU), I urge you to support
the State Flexibility Act, introduced as S. 868 by Senator Hatch (R-UT) and as
H.R. 1683 by Representative Gingrey
(R-GA). This bill would repeal the costly Medicaid “maintenance of
effort” (MOE) requirements embedded in the Patient Protection and Affordable
Care Act (PPACA) and provide states the flexibility they need to deal with
long-term fiscal challenges.
The economic
recession has precipitated unprecedented budgetary shortfalls for many state
governments, stemming from unsustainable expenditures and temporarily reduced
tax revenues as a result of the recession. With every state save Vermont having
a variation of a balanced-budget law, the $430 billion in cumulative deficits
from 2009 to 2011 have been closed, to varying degrees of satisfaction for
overburdened taxpayers. Nevertheless, with states’ projecting another $112
billion in total shortfalls this year, legislatures will need to make more
decisions to shore up their fiscal position.
The
passage of PPACA has made states’ budgetary situation much more precarious by
unceremoniously removing Medicaid from the discussion. As part of its
implementation, PPACA included a maintenance of effort provision that prevented
states from altering Medicaid’s eligibility requirements. With the program’s
total state-level spending already increasing by 8.8. percent in Fiscal Year
2010, MOE requirements will essentially handcuff states’ from dealing with one
of their primary budgetary challenges. Compounding these difficulties is the
fact that just as the MOE mandate kicks in, temporary stimulus funds are being
phased out. In 2009 NTU warned that less prudent states could come to depend
upon this infusion of federal cash as a substitute for home-grown budget
discipline. Today, this prediction is unfortunately coming true in many areas
of the country. Furthermore, even those states that spent their citizens’ money
responsibly are now facing unpleasant chances because of the squeeze from MOE
requirements.
H.R. 1683
unshackles state policymakers from the onerous MOE provision, allowing them the
flexibility to adapt Medicaid to changing fiscal realities. Whether it be
through tailoring the Medicaid program itself, such as amending income
eligibility thresholds, or enacting money-saving innovations, like shifting
Medicaid beneficiaries into new private exchanges, states must have the ability
to pass reforms free from unfunded MOE requirements. Furthermore, by
eliminating the one-size-fits-all approach, the State Flexibility Act allows
states to make budget decisions with less pressure to impose harmful tax
increases or to seek another federal bailout (one Washington cannot afford).
If states are to successfully grapple with the
dire fiscal situations they face Congress must first untie their hands. S. 868
and H.R. 1683 are the first step toward accomplishing that goal and therefore
NTU is proud to work for passage of this important legislation.
Sincerely,
Brandon Greife
Federal
Government Affairs Manager
108 North Alfred Street Ø Alexandria,
Virginia 22314 Ø Phone: (703)
683-5700 Ø Fax: (703)
683-5722 Ø Web:
www.ntu.org
