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Joint Letter Opposing Repeal of Medicaid Maintenance of Effort Requirements

National Disability Leadership Alliance
C/o United Spinal Association
1660 L Street, NW
Suite 504
Washington, DC 20036-5647

May 16, 2011

United States Senate (United States House of Representatives)
Washington, DC 20510 (20515)

RE: Urging Your Rejection of Proposals to Repeal the Medicaid Maintenance of Effort Requirements (MOE) of the American Recovery and Reinvestment Act of 2009 and the Patient Protection and Affordable Care Act of 2010

Dear Senator/Representative:

The following members of the National Disability Leadership Alliance (NDLA), a coalition of national disability organizations led by individuals living with disabilities and supported by grassroots constituencies in all states and the District of Columbia, are writing to urge your rejection of H.R. 1683/S.868, the proposed “State Flexibility Act” that would eliminate the Medicaid and CHIP Maintenance of Effort requirements under the American Recovery and Reinvestment Act of 2009 and the Patient Protection and Affordable Care Act of 2010.

The changes are not necessary and would, by CBO estimates, lead to 300,000 or more Medicaid beneficiaries being unfairly dropped from their coverage in 2013 and countless other low income individuals in jeopardy of losing their Medicaid eligibility in future years. We believe states already have considerable flexibility to reduce Medicaid expenditures without being given unchallengeable authority to roll back Medicaid program eligibility requirements and make enrollment to those otherwise eligible more difficult. With the federal government paying at least half, and in many cases more than 50%, of a state’s Medicaid expenses, it is the appropriate role of the federal government to ensure that its investment in our nation’s safety net reaches as many low income individuals as possible with essential health benefits to give these individuals and their children a reasonable chance to be healthy, active and productive members of society.

Medicaid is a lifeline for millions of Americans with disabilities. Nearly 25% of all Medicaid beneficiaries are seniors and individuals with disabilities. Medicaid provides critical health coverage to 8 million individuals with disabilities and 6 million low-income Medicare beneficiaries who rely on Medicaid to fill Medicare’s gaps. Medicaid provides services that allow individuals with disabilities to remain independent, maintain employability and access cost-effective healthcare services, especially in times of economic turmoil. Indeed, Medicaid is often the only source of comprehensive and appropriate coverage that addresses the basic health care and long-term services needs of people with disabilities.

Eliminating the Maintenance of Effort requirements would serve only to expand the number of uninsured and unprotected in this nation and force greater cost shifting to the private sector – consumers, employers and healthcare providers — as well as other federal government programs to subsidize increased uncompensated care. Many health care providers are hesitant to take on Medicaid patients now because of low payment rates.

Such cost shifts will only exacerbate this problem. Increasing numbers of those who might lose their eligibility or find it more difficult to enroll in Medicaid will turn to their already overcrowded hospital emergency room for their care. They will do so often when their condition is no longer a primary care concern and is far more serious and costly because, absent coverage, they will have waited too long to obtain needed care. Payment for that more expensive care is not eliminated when a state reduces its Medicaid eligibility, it is merely passed along to the taxpaying public in other ways – i.e., thus H.R. 1683/S.868 will contribute to the equivalent of robbing Peter to pay Paul.

There is currently tremendous flexibility at the disposal of governors to reduce Medicaid spending without reducing eligibility and enrollment at a time when our nation is experiencing the largest demographic growth of those who are aged and disabled in our nation’s history. Nearly two-thirds of Medicaid expenditures on the aged and disabled are the outgrowth of states previously and wisely opting to extend coverage to new populations or expand coverage to new “optional” but necessary health care services.

We do not recommend any specific changes to these previous state decisions, but the notion that states do not currently have flexibility to operate their Medicaid programs more efficiently is simply inaccurate and fails to offer justification for this proposed legislation. Nothing now stops states from achieving savings from benefit changes, achieving greater leverage in their payment for services or undertaking reforms to their health delivery systems such as reorienting care toward the home and community-based settings preferred by beneficiaries rather than more costly long-term institutional care. And many states have, in fact, pursued waivers to undertake such changes.

We urge you to oppose the proposed State Flexibility Act. The current laws provide the federal government and its state counterparts sufficient latitude to make significant cost-saving changes to Medicaid without undermining Medicaid’s historic role to ensure basic health benefits reach those at or near poverty. H.R. 1683/S.868 would renege on that commitment and would add to the nation’s uninsured and heighten health risks.

We look forward to working with you to improve the Medicaid program without harming those it serves. If you have any questions, please feel free to contact Joseph C. Isaacs, CAE Vice President for Public Policy at the United Spinal Association at 202-556-2076 ext. 7103 or Thank you for your serious consideration of our views.


American Association of People with Disabilities
American Council of the Blind
Hearing Loss Association of America
The Autistic Self Advocacy Network
Little People of America
National Association of the Deaf
National Coalition for Mental Health Recovery
National Council on Independent Living
National Federation of the Blind
Not Dead Yet
United Spinal Association

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