Medicaid Regulations Moratorium
The Bush Administration has proposed seven separate regulations over the last two years that could cost state budgets billions of Medicaid dollars. A bipartisan coalition of governors and members of Congress have opposed these regulatory changes. In the case of one hospital regulation, a court has ruled that the administration could not proceed in implementing this change. Congress can also keep the regulations from taking effect by passing legislation that would keep the administration from implementing the changes.
Congress is working to include a moratorium on these Medicaid regulations in this year's War Supplemental Bill. This must-pass legislation may allow the legislation to be signed despite the president's objection depending on negotiations over funding of the wars in Iraq and Afghanistan.
Update
Senate passes War Supplemental - June 26, 2008
The Senate passed the War Supplemental, H.R. 2642, the Supplemental Appropriations Act, 2008, which was sent to them by the House, by a vote of 92-6. The bill includes funding for the wars in Iraq and Afghanistan, as well as domestic programs and funding, including a moratorium on six of the seven harmful Medicaid regulations proposed by the Bush Administration. The bill will now go to the White House for President Bush's signature.
House passes War Supplemental, includes six of the seven Medicaid regulations - June 20, 2008
Last night the House of Representatives sent the Senate a $161.8 billion supplemental spending bill. Lawmakers did so in two votes. In the first, they agreed with a Senate amendment to provide the war funding, 268-155. They then agreed to a second amendment consisting of the domestic programs and spending, 416-12. Included in the domestic spending are provisions that delay six Medicaid provisions. The NRHA had been seeking seven provisions, as explained below. The provision that was not included had to do with outpatient hospital services. The Bush administration guaranteed Congress that this provision would not be implemented until later this year, if at all, giving us more time to fight this change from taking effect. The Senate is expected to take up the measure next week, clearing it for President Bush's signature.
Background
The House Committee on Government Oversight and Accountability Democratic staff have prepared a summary of the seven regulations that provide a detailed analysis.
Under the regulations proposed by the Bush Administration, states could not use federal Medicaid funds to help pay for physician training. The regulations also would place new limits on Medicaid reimbursements to hospitals and nursing homes operated by state and local governments and limit coverage of rehabilitation services for individuals with disabilities and mental illnesses. If the regulations go into effect, states are projected to lose $50 billion in federal funds over the next five years.
Medicaid is a joint federal-state health insurance program for the poor. Currently, the federal government pays 57 percent of the program's costs - an estimated $204 billion in fiscal year 2008. There has long been tension between states and the federal government over who should bear more of the burden.
The administration argues that states are unfairly gaming the system to wring extra dollars out of the federal government and, in some cases, using the money for non-Medicaid purposes. The Bush administration cited reports from the HHS Office of Inspector General and the Government Accountability Office that found states had been inappropriately increasing Medicaid spending to draw down more federal matching funds.
House democrats and state governors (both republicans and democrats) say the states have addressed those problems and that the new rules would unfairly deprive the states of funds. To address charges of gaming the system, the bill would provide $25 million annually for efforts to fight Medicaid fraud. The Congressional Budget Office estimates that the bill passed by the House delaying the regulations for one year would cost about $1.8 billion over five years.
The legislation would delay implementation of the regulations until April 1, 2009, at which point a new administration would decide whether to implement the rules. The expectation of Congressional democrats is that a democratic president would not implement the seven regulations and that no further action would be needed. They would also hope that a new republican administration would at least give it a second look before Congress would need to take additional action.
Children in rural areas depend on Medicaid or SCHIP for health insurance more than children in urban areas. Additionally, rural populations tend to be poorer than their urban counterparts and illnesses associated with poverty, including infant mortality, are more pronounced in rural areas.
According to a 2007 study by the Carsey Institute, 32 percent of children in rural areas rely on SCHIP or Medicaid compared to 26 percent of children in cities. A majority of uninsured, rural children (54 percent) live in families where the head of the household works full-time year-round. Additionally, private-sector insurance coverage in rural areas fell from 45 percent to 37 percent, leaving rural families even more dependent on Medicaid and SCHIP.
It takes a two-thirds vote in both the House and Senate to achieve an override of a Presidential veto. This has happened only once to a Bush veto, in 2007 on a water resources bill. While it is clear that support for an override is available in the House, it is unclear in the Senate. The pressure and bill now moves to the Senate, where certain key republican leaders are less interested in the legislation then their House republican counterparts.
The NRHA has worked this year to assure that these Medicaid cuts do not take effect. In addition to this legislation, we have worked with partners to try and halt the regulations from taking effect. We will keep working on this issue until Congress protects rural Medicaid beneficiaries.
