Deficit negotiations are heating up on Capitol Hill with the group led by Vice President Biden (“the Biden Group”) meeting several times last week and scheduled for three to four additional multi-hour talks this week. Their goal: to resolve the impasse over extending the nation’s borrowing authority by August 2nd (which is when Treasury predicts the US will absolutely hit its debt ceiling) which is necessary in order for the US to avoid the risk of default. Negotiators have yet to agree on a package of policy changes that meets the group’s generally agreed upon goal of cutting the deficit by $4 trillion over the next decade.
Republicans have declared tax increases off the table and insisted on cuts to Medicare, while Democrats have publicly vowed to oppose a deal that substantially cuts Medicare or Medicaid. The group is working in earnest in hopes of reaching at least an agreement in principle before Congress adjourns for the 4th of July recess. If broad agreement cannot be reached in the next few weeks, there is a possibility – raised by Senate Republican Leader Mitch McConnell (R-KY) this week – that Members could vote for a short term extension of the debt-limit and come back to make far-reaching policy changes in the fall.
Within the broader debt ceiling discussion, one item receiving particular attention this week is of particular importance to safety net providers nationwide: the possible repeal of the Medicaid Maintenance of Effort, or MOE, requirement from the Affordable Care Act (ACA). The MOE written into the Affordable Care Act last year requires that states make no changes to their Medicaid eligibility or enrollment procedures for adults on Medicaid until 2014 and for children until 2019. States do not receive enhanced federal funding for Medicaid until 2014. MOE repeal has been under discussion for several weeks and a standalone bill has been introduced (H.R. 1683) to repeal the MOE, which is supported by several governors seeking more budgetary and programmatic flexibility in their Medicaid programs.
However, CBO estimates that eliminating the MOE doesn’t have a significant impact on reducing Medicaid spending; SBO estimates the MOE repeal would reduce spending by $2.1 billion in 2012-2021 and that 300,000 current enrollees would lose coverage (of the 67 million now enrolled in Medicaid). While the estimated savings would only be a tiny portion of the $4 trillion the Biden group is trying to agree on, the implications of the MOE repeal would be significant on those patients who lose their health care coverage as their state ekes out Medicaid savings in the form of reduced eligibility or more stringent enrollment procedures. MOE repeal, and the Medicaid program more broadly, have become a hot topic in a heated discussion, and one of great importance to health centers. Stay tuned to the blog for updates on the debt ceiling negotiations and the implications any deal may have on health centers and the patients we serve.