It’s not new information
that Medicaid costs and requirements are crippling state and federal budgets.
What is new is that federal action is now being taken to repeal these
burdensome requirements.

U.S. Senator Orrin Hatch (R-Utah) announced on May 3, 2011 Senate
Bill 868, known as the State
Flexibility Act. This novel piece of legislation introduced by the Senate
Finance Committee is designed to repeal the Maintenance of Effort (MOE)
requirements for Medicaid found in the Patient Protection and Affordable Care
Act (PPACA), also known as ObamaCare.

The MOE provisions in section
5001(f) of PPACA force states to maintain "eligibility standards, methodologies, or procedures" under its state
Medicaid plan, preventing flexibility and cost savings for states. This is
because states are prohibited from decreasing Medicaid enrollment numbers or
services offered under current PPACA legislation. However, millions of people
will be added to the program thanks to PPACA, causing taxpayers and state
budgets to suffer greatly under the weight of new expenses.

Presently, the CBO
estimates that repealing the MOE requirements through the State Flexibility
Act will save about $2.8 billion over the first four years and $2.1 billion in
the years following. This translates into millions of dollars in savings for
each state.

Although she did not lend her support to this particular bill, Health and Human
Services Secretary Kathleen Sebelius has admitted that states need greater
freedom to reform their individual Medicaid programs to better reflect and
serve their states unique citizens. This admission has come after more than
half of US states have resisted the strict guidelines imposed by PPACA, and
called for autonomy.

The State Flexibility Act was created in the US Senate after governors from
both sides of the isle requested that MOE requirements not be imposed on their
states. Additionally, several states have submitted waivers to the federal
government asking for exemption from the MOE provisions citing inability to
meet or afford the obligations.

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