As the Energy and Commerce Committee searches for options to save the Department of Defense from cuts, coverage for millions of
children, parents, pregnant women, the elderly, and people with disabilities
could end up on the chopping block. This is just one of a number of distressing
offsets that also includes repealing exchange establishment grants and the
prevention and public health fund established under the ACA.
Specifically, the Committee is considering rolling back
the stability protections (aka the maintenance-of-effort requirements)
in the ACA that have been vitally important in maintaining an
affordable coverage option for children and families during these
turbulent economic times. If these protections were rescinded, coverage for
more than a third of Medicaid and CHIP beneficiaries would be placed
at risk as states could reduce coverage to mandatory federal minimum levels in
Medicaid and scale back or even entirely eliminate their CHIP programs. (The last
time this ugly provision reared its head, CBO estimated that over half
of states would take this route.)
Even people who remain eligible for coverage will be
vulnerable to cuts through “backdoor” strategies as states would be able to
re-introduce red-tape barriers to coverage. While not as obvious as reducing eligibility levels, these
“backdoor” strategies for depressing enrollment can be extremely effective at
cutting coverage and close to half of all states used such strategies during
the last recession. In contrast, during the most recent recession, Medicaid and
CHIP coverage remained stable in nearly all states, while 29 went beyond
holding steady by taking steps to improve coverage through targeted
expansions and simplifications during 2011. This stability in coverage explains
why the number of uninsured children remains at record low levels despite sharp jumps in poverty and uninsured rates for adults.
Preliminary estimates out of CBO suggest that
the repeal of the stability protections would generate a relatively paltry $1.4
billion in federal savings. Yet such a move has the potential to knock millions
of people off of coverage, with children at the greatest risk of losing out. As
Congress pursues deficit reduction plans and attempts to avoid the upcoming
sequestration, it should seriously consider the impact such one-sided
approaches have on the most vulnerable among us.