As the stimulus bill winds its way through Congress, one provision is generating a lot of discussion in state capitols. For states to receive the increased Medicaid matching dollars offered in the legislation, states cannot make their eligibility rules any more restrictive than they were in the summer of 2008. In policy circles, it’s called a maintenance-of-effort clause. The feds are telling states, “We’re not going to reward you for kicking people off your Medicaid rolls, so if you want our help, leave your eligibility requirements alone.”
Minnesota could lose out on a significant amount of federal aid if, as the governor proposes, parents are excluded from MinnesotaCare. This leaves only a couple other options for trimming health care expenses: cutting benefits (like dental care or physical therapy) or reducing payments to health care providers. The question on policymakers’ minds is whether the increased aid is enough to offset some of the most draconian cuts being contemplated.
Despite the repeated assertions of conservatives to the contrary, the stimulative effects of Medicaid spending are clear. You don’t have to look hard to find examples of clinics and hospitals laying off staff because fewer people have health insurance after being laid off themselves. This money creates jobs and keeps people employed, an important consideration for lawmakers to remember as they start piecing together a budget.
