Millions at Risk for Lost Coverage If Eligibility Rules Rescinded, Report Says

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Health insurance coverage for more than a third of Medicaid and Children's Health Insurance Program beneficiaries would be at risk if the federal government rolls back a requirement that states maintain their eligibility rules until the health reform law is implemented, according to a Feb. 23 report by the Georgetown Center for Children and Families.

The report warned that an estimated 35 percent of Medicaid and CHIP beneficiaries--27.3 million people--are covered under state options that could be eliminated if the requirements were rescinded and that those who remain eligible could have difficulty enrolling if states increase the red tape applicants must contend with to access the programs.

Many governors are calling on lawmakers or the administration to lift the restrictions on reducing eligibility, known as maintenance-of-effort (MOE) requirements, saying that the requirements limit the options for cash-strapped states to close persistent budget shortfalls.

The Patient Protection and Affordable Care Act requires states to maintain the eligibility rules that were in place when the law took effect in 2010 until 2014 for adults and 2019 for children as a condition of receiving federal funding for Medicaid. The American Recovery and Reinvestment Act, which provided increased federal funding for Medicaid to help states weather the recession, also included an MOE requirement. The enhanced funding expires June 30.

The House Energy and Commerce Committee has scheduled a March 1 hearing on how PPACA will affect Medicaid and state health reform efforts. Governors are expected to testify at the hearing, including about the effects of the MOE requirements.

Optional Populations.

If the MOE requirements were lifted, states would be required to maintain the minimum eligibility levels for the various populations covered by Medicaid and CHIP. However, they could do away with optional populations, which vary from state to state. The report said that 14.1 million children, 8 million adults, 2.8 million low-income seniors, and 2.3 million people with disabilities are covered under a state option.

“Repealing the stability protections could unravel the country's successful efforts to keep children covered and would hit families just as they are regaining their footing after turbulent economic times,” Jocelyn Guyer, an author of the report and co-director of CCF, said in a statement.

The report also said if the MOE requirements were lifted, “backdoor” policies such as requiring beneficiaries to renew their coverage every three months or to apply in person rather than online or by mail could make enrollment more difficult.

While the extent to which states would cut coverage if the MOE requirements were lifted is unknown, the report said state actions during the last recession indicate they would directly eliminate coverage for adults. And while states may not cut coverage for children or pregnant women directly, freezing CHIP enrollment or implementing barriers to enrollment could leave many uninsured, according to the report.

The report recommended that states look for alternatives to stricter Medicaid eligibility rules, such as tapping rainy day funds if they are available, looking for cost savings within the Medicaid program, or asking providers to help finance the state share of Medicaid costs.

Medicaid Spending Growth.

Meanwhile, the Kaiser Family Foundation's Commission on Medicaid and the Uninsured Feb. 23 released a report on Medicaid spending growth during the past decade.

The report said that national Medicaid spending increased from $338 billion in federal fiscal year 2007 to $359 billion in 2008 and to $387 billion in 2009, largely due to recession-fueled increases in unemployment that caused millions to turn to Medicaid for coverage.

The report said that Medicaid spending rose faster than growth in national health expenditures and the gross domestic product in the past two years as well as during the past decade.

However, the national average for growth in Medicaid spending on a per enrollee basis is lower than growth in national health expenditures per capita and increases in private health insurance premiums, according to the report.

The CCF report is available at

The KCMU report on spending growth is available at

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