McInerney: 'Budgeted savings' would mean lost care

In Virginia, it is more difficult to qualify for the health coverage Medicaid offers than almost anywhere in the country. That means a lot of people who need treatment can't get it, which in turn makes Virginians less healthy and the state less supportive of families and business.

Yet legislation moving through Congress could soon make it even worse for thousands of children, seniors, pregnant women and Virginians with disabilities. The measure would end a federal requirement that states refrain from making their eligibility rules more restrictive. Two weeks ago, Virginia Gov. Bob McDonnell sent a letter to congressional leaders asking them to support the legislation. This would be a bad idea for Virginia.

Eligibility criteria in Virginia are at (or near) the minimum required under federal law for most groups. Working parents in Virginia generally cannot qualify for Medicaid if they make more than about $7,000 a year. The national average income level for eligibility is more than twice that. Virginia does cover some children, pregnant women, seniors and people with disabilities whose families have incomes above the minimum levels — and they are the ones that potentially could lose eligibility if the legislation is passed.

The heart of the matter is what is called the maintenance of effort (MOE) requirement. As part of both the new federal health-care reform and the American Recovery and Reinvestment Act, states aren't allowed to reduce Medicaid eligibility or impose procedural hurdles to enrollment. That makes sense because so many Americans are still struggling to recover from the recession. Repealing the MOE requirement potentially could kick the legs out from under people who are just getting back on their feet.

That's especially important in Virginia because even though we are one of the wealthiest states in the country we have one of the least generous Medicaid systems. The state ranks 48th in per capita Medicaid expenses and 43rd in income eligibility in the Children's Health Insurance Program (called FAMIS in Virginia). The Governor's Virginia Health Reform Initiative's Advisory Council told him in December that "Virginia's Medicaid program has long been described as a very lean program with very strict eligibility criteria and modest payment rates for services."

What would further cuts look like? We got a glimpse in the state budget passed back in 2010. First, the budget reduced eligibility in FAMIS that would have cost up to 30,000 Virginia children their health insurance.

The budget also reduced eligibility for community-based long-term care, which would have resulted in more than 2,000 seniors going without cost-effective, efficient assistance that keeps them out of nursing homes. The budget also reduced Medicaid eligibility for seniors and people with disabilities, meaning thousands of Virginians would lose their Medicaid coverage.

None of these cuts went into effect because of the MOE requirement included in the federal Recovery Act. While no one can know for sure what cuts the governor envisions if Congress repeals the MOE, his letter certainly suggests he would likely look for these or similar reductions in next year's budget. After all, he refers to the very cuts proposed in 2010 as "budgeted savings" the state was required to restore as a result of the MOE requirement. One person's "budgeted savings" is another person's lost health care coverage.

In fact, to the extent that the costs of Medicaid in Virginia have risen it's not because frills have been added. Program spending growth is almost entirely driven by rising health-care costs and higher enrollment levels because more people need coverage as Virginians struggle in a weakened economy.

For the sake of all Americans, Congress should resist efforts to rescind the MOE requirement. It provides access to people who without it would lack basic care. And it doesn't prevent states from looking for Medicaid cost savings in other places, like delivery system reform, provider payment rates or benefits offered. These are areas where Virginia does not excel and we have already seen significant reductions in these parts of Medicaid since the economic downturn began. Undoubtedly, Medicaid has already provided substantial savings toward balancing the budget during the economic downturn.

Making seniors, pregnant women, kids and disabled Virginians go without health and long-term care coverage is the wrong way to go. It would send a strong signal that the priorities of one of the most prosperous states in the country somehow can't also include the care of those who can't care for themselves.