State Flexibility Act Would Prevent Looming Fiscal Disaster

While Ensuring Medicaid’s Availability for Most Vulnerable

Washington, D.C. – Rep. Cathy McMorris Rodgers (R-WA), Vice Chair of the House Republican Conference, and Rep. Phil Gingrey (R-GA), Co-Chair of the GOP Doctors Caucus, introduced a landmark Medicaid reform bill today that would fundamentally change Medicaid from a federally-directed, one-size-fits-all program into a true partnership between the states and the federal government, creating a climate for innovation and cost savings, while ensuring that the program meets the needs of our most vulnerable populations.

Republican and Democratic Governors support this initiative because growing Medicaid costs are straining their state budgets while threatening vital health care services for the poor, the elderly, and those with disabilities. One of the main reasons for this cost explosion is the Medicaid Maintenance of Effort (MOE) requirements included in the Patient Protection Act and the American Recovery and Reinvestment Act. The MOE prohibits states from adjusting their eligibility for Medicaid prior to the program’s explosive expansion scheduled for 2014 – also a product of last year’s radical health care law. The State Flexibility Act would eliminate the MOE requirement.

“When it comes to Medicaid (and most issues) ‘the government closest to the people is the best form of government,’” said Rep. McMorris Rodgers at a press conference unveiling the bill. “Our bill follows that principle to make America’s 50 states ‘laboratories of democracy’ in which new ideas for health care spending will have a chance to take effect and the best ideas will win.”

In Washington State alone, Gov. Christine Gregoire is projecting a $5 billion deficit over the next biennium – and the main driver of that deficit is Medicaid spending. The House Energy & Commerce Committee estimates that the government takeover of health care will cost states at least $118 billion through 2023.

“Our bill will give Governors the flexibility they need to keep Medicaid available for those who truly need it – while avoiding the costs of allowing the program to spiral out of control – specifically, higher taxes or cuts to other vital services,” said Rep. McMorris Rodgers.

Rep. Fred Upton, Chairman of the House Energy & Commerce, is an original cosponsor of the bill and attended today’s press conference.

The Senate version is being introduced by Sen. Orrin Hatch (R-UT), Ranking Member of the Senate Finance Committee, who also attended.

“Our bill hopes to provide savings through flexibility of services offered to the individual in need, better delivery, and prioritizing,” said Rep. McMorris Rodgers.