Hatch Urges Changes To End Medicaid ‘Gulag’

Sen. Orrin Hatch, R-Utah, bolstered by the backing of more than two dozen Republican governors, stepped up his push to gain support for relaxing Medicaid’s maintenance of effort rules.

In a Wednesday speech at the Heritage Foundation, Hatch, the Finance Committee’s ranking Republican and a member of the Health, Education, Labor and Pensions Committee, said that Medicaid was burdened by overstretched resources and abuse by recipients. He suggested that easing the financial burden on states would allow them to improve the program.

“The bottom line is that those who are the biggest advocates for Medicaid, and most criticize conservatives for seeking to reform the program, are happy to consign America’s poorest and sickest patients to a health care gulag,” Hatch said.

Hatch intends to “modernize” Medicaid using the welfare reform of 1996 — which allowed states to provide their own solutions for the broken program — as a model.

He recently introduced legislation that would repeal a mandate requiring states to maintain current Medicaid eligibility levels for adults until 2014. Congress imposed the maintenance-of-effort mandate in exchange for additional Medicaid funding as a part of the stimulus bill of 2009. But now, Hatch said, it restricts states ability to manage who qualifies for this health insurance program for low-income people.

“Medicaid was intended to be a safety net program for the poor. But is has turned into substitute health insurance for nearly one-quarter of the population” he said, adding that it also undermines the states’ ability to make tough budget decisions in the midst of fiscal crises. This week, the Republican governors sent a letter to federal officials asking that the mandate be lifted “so that states are once again granted the flexibility to control their program costs.”

In Hatch’s view, governors are best-suited to provide guidelines for Medicaid reform based on their experience running the program. He said he hopes to empower states to design and implement innovative solutions that work with the needs, culture, and values of each state.

An official from the Centers for Medicare and Medicaid Services disagreed with Hatch’s characterizations of Medicaid. “Medicaid is a lifeline for nearly 50 million Americans, many living with chronic conditions and disabilities and seniors on nursing homes,” the official said. “The Obama administration is committed to protecting and improving Medicaid while working with states to provide them with support and flexibility to manage their programs during these tough economic times.”

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