House passes budget reconciliation that targets Medicaid and other low income programs

On May 10, by a vote of 218 to 199, the House passed a bill to stop most of the $109 billion in across-the-board spending cuts for FY 2013 scheduled to take effect in January under the Budget Control Act (BCA). It would do so by further reducing the cap on discretionary programs and by cutting mandatory programs. It would lower the cap for non defense discretionary programs by $19 billion, on top of the 6% reduction already required by the BCA in 2013. Mandatory programs would be cut by $310 billion over a decade through a “budget reconciliation” process, disproportionately targeted to programs for low income populations. These cuts include the following that would adversely affect people with disabilities:

  • Medicaid reductions of $28 billion over 10 years. This would occur through changes in provider taxes, hospital payments, maintenance of effort (MOE) requirements, and payments to territories. People with disabilities would likely face decreased Medicaid eligibility and benefits as the states adjust to the reduced federal participation.
  • Repeal of the Social Services Block Grant (SSBG). The $1.7 billion SSBG enables each state to provide social services that include special services to persons with disabilities. One of the SSBG’s five goals is preventing or reducing inappropriate institutional care by providing for home and community-based services.
  • Cuts to the Supplemental Nutrition Assistance Program (SNAP) (formerly known as food stamps). Monthly assistance for 44 million people would be cut by $35 billion and 2 million people will lose SNAP benefits entirely.
  • Increase repayment charges for people who receive health insurance subsidies.  An estimated 350,000 people would likely forgo coverage, making it more difficult for the health reform law’s insurance exchanges to function effectively.  People with low incomes who received the subsidies would be affected if their incomes increase later in the year because they found a job, received a promotion, got married, or for another such reason.
  • Elimination of the Prevention and Public Health Fund. The Affordable Care Act (ACA) established this fund to expand investments in prevention and public health, to improve health outcomes, and to enhance health care quality.
  • Revisions to the medical liability system by capping non-economic damages to $250,000, limiting attorneys’ fees and other changes.

However, the reconciliation process is not likely to proceed beyond the House of Representatives. A budget resolution, with reconciliation instructions, is unlikely to pass the Senate. However, the existence of a concrete plan to replace the unpopular automatic cuts could give House leaders leverage in discussions that will likely occur later this year, about how to stop the automatic cuts.

House to vote on plan that includes severe cuts to disability-related programs

House Republicans will take their first concrete steps today to avoid automatic spending cuts (known as a “sequester”) and begin a debate on ways to reduce spending on mandatory programs such as Medicaid and food stamps. The House Budget Committee will begin marking up two related bills, one of which would stop most of the $109 billion in across-the-board spending cuts that are scheduled to take effect in January under the Budget Control Act. The second is a “budget reconciliation” measure that would cut $300 billion over 10 years to substitute for the spending cuts. These combined measures include a number of provisions that would affect people with disabilities:

  • Repeal of the “maintenance of effort” requirements on states for Medicaid and the Children’s Health Insurance Program. The legislation would allow states to apply more restrictive eligibility standards for programs. The draft bill also would reduce the federal Medicaid match rate for U.S. territories from 55 percent to 50 percent, as well as cut the health care provider tax from the current 6 percent threshold to no greater than 5.5 percent.
  • Repeal of the Social Services Block Grant (SSBG). The $1.7 billion SSBG enables each state to provide social services that include special services to persons with disabilities. One of the SSBG’s five goals is preventing or reducing inappropriate institutional care by providing for home and community-based services.
  • Increase repayment charges for people who receive health insurance subsidies.  People with low incomes who received the subsidies would be affected if their incomes increase later in the year because they found a job, received a promotion, got married, or other reason.
  • Elimination of the Prevention and Public Health Fund. The Affordable Care Act (ACA) established this fund to expand investments in prevention and public health, to improve health outcomes, and to enhance health care quality.
  • Revisions to the medical liability system by capping non-economic damages to $250,000, limiting attorneys’ fees, and other changes.

Democrats intend to offer an alternative plan for replacing the spending cuts that they say will be more balanced. According to press reports, Budget Committee Democrats may propose eliminating tax breaks that benefit some companies in an effort to increase tax revenue instead of finding additional spending cuts.

The House floor vote is currently scheduled for May 10th. However, the reconciliation process is not likely to proceed beyond the House of Representatives. A budget resolution, with reconciliation instructions, is unlikely to pass the Senate. However, the existence of a concrete plan to replace the automatic cuts could give House leaders leverage in discussions that will likely occur later this year about how to stop the automatic cuts.

House Committees Approve Plans to Cut Important Disability-related Programs and Avoid Across the Board Cuts

On April 18th, the House Ways & Means Committee voted to:

  • Repeal the Social Services Block Grant (SSBG). The $1.7 billion SSBG enables each state to provide social services that include special services to persons with disabilities. One of the SSBG’s five goals is preventing or reducing inappropriate institutional care by providing for home and community-based services.
  • Increase repayment charges for people who receive health insurance subsidies.  The Committee voted for a change in the Affordable Care Act’s (ACA) subsidies that would cause 350,000 people to forgo coverage and make it more difficult for the health reform law’s insurance exchanges to function effectively.  People with low incomes who received the subsidies would be affected if their incomes increase later in the year because they found a job, received a promotion, got married, or for another such reason.

The House budget resolution directed the Energy and Commerce Committee to find $3.8 billion in savings this year. To achieve those savings, the Committee approved a separate measure on April 25th which would make significant program changes to Medicaid that would reduce federal Medicaid spending and to repeal or limit several provisions of the ACA. Among the more critical provisions are:

  • Eliminating the Prevention and Public Health Fund. The ACA established this fund to expand investments in prevention and public health, to improve health outcomes, and to enhance health care quality. The ACA granted an advanced appropriation of $15 billion over its first 10 years to this fund; however, the payroll tax extension law enacted in February cut that by $5 billion. The House Committee voted to rescind the remaining money.
  • Repealing the “maintenance of effort” requirements on states for Medicaid and the Children’s Health Insurance Program. The legislation would allow states to apply more restrictive eligibility standards for programs. The draft bill also would reduce the federal Medicaid match rate for U.S. territories from 55 percent to 50 percent, as well as cut the health care provider tax from the current 6 percent threshold to no greater than 5.5 percent.
  • Revising the medical liability system by capping non-economic damages to $250,000,limiting attorneys’ fees and other changes. On April 17th, the House Judiciary Committee also voted to limit medical liability.

The House floor vote is currently scheduled for May 10th. However, the budget reconciliation process is not likely to proceed beyond the House of Representatives. A budget resolution, with reconciliation instructions, is unlikely to pass the Senate. For more information about reconciliation visit the Senate website. However, the existence of a concrete plan to replace the automatic cuts could give House leaders leverage in discussions about how to stop the automatic cuts that will likely occur later this year.

House Energy and Commerce Subcommittee on Health Approved Bill to Allow States to Cut Back Medicaid Enrollment

Last Thursday, the House Energy and Commerce Subcommittee on Health approved a bill to allow states to cut back Medicaid enrollment. The bill, H.R. 1683, aims to repeal the Medicaid Maintenance of Effort (MOE) requirements established by the stimulus law and the new health care law, which are both extremely important to individuals with intellectual and developmental disabilities and their families. The new health care law Medicaid MOE prevents the states from restricting Medicaid eligibility in advance of the 2014 Medicaid expansion of coverage. The federal government will pay 100% of the increased cost of the new health care law Medicaid expansion for the first 3 years. The stimulus law provided an increased federal Medicaid match in exchange for keeping access to Medicaid for current beneficiaries.

The Arc supports these MOE requirements as they ensure that access to health care and critical long term services and supports are not eliminated. The full Committee and the House are expected to approve the bill, though it will meet significant opposition in the Senate.

State Flexibility Act Introduced

Senator Hatch (R-UT) and Representative Gingrey (R-GA) introduced the State Flexibility Act (S. 868 and H.R. 1683) to repeal the Medicaid Maintenance of Effort (MOE) requirements required by the stimulus law and the new health care law, which are both incredibly important to individuals with intellectual and developmental disabilities and their families. The new health care law Medicaid MOE prevents the states from restricting Medicaid eligibility in advance of the 2014 Medicaid expansion of coverage.  The federal government will pay 100% of the increased cost of the new health care law Medicaid expansion for the first 3 years. The stimulus law provided an increased federal Medicaid match in exchange for keeping access to Medicaid for current beneficiaries.

Kansas Governor seeks to block grant Medicaid and cuts services

Kansas Governor Sam Brownback has written HHS Secretary Sebelius requesting a waiver of the Medicaid maintenance of effort (MOE) requirements and a full Medicaid block grant. The MOE requirements are in place to make sure that states do not drop people from eligibility before the Medicaid Expansion takes place in 2014. Many Republican Governors have asked for the flexibility of a block grant so that they can cut the Medicaid program and not comply with the regulations.

CMS issues State Medicaid Director Letter on Maintenance of Effort Provisions

CMS released a letter providing guidance on “the maintenance of effort” (MOE) provisions in the Affordable Care Act (ACA) of 2010.  Some states have been seeking ways to avoid the ACA’s MOE – the requirement to maintain their current Medicaid eligibility criteria and services until 2014. The letter and the enclosed Q&As address the ACA’s MOE provisions for Medicaid and the Children’s Health Insurance Program (CHIP) generally. It also answers specific questions related to the non-application of the MOE provisions for certain adult populations in States with a budget deficit, section 1115 waivers and demonstration projects, and the treatment of premiums.  Click here for the press release. See the letter at http://nasuad.org/documentation/newsroom/friday_updates/MOE%20Letter%20for%20Display.pdf