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States would receive total authority to determine Medicaid eligibility, benefits and provider reimbursement rates under legislation to be introduced Wednesday by U.S. Rep. Todd Rokita (R-Ind.).
The official legislation has not yet been filed with the House clerk, but Rokita's office released a fact sheet outlining the issue and the proposal. Federal funding for Medicaid and the Children's Health Insurance Program (CHIP) would be consolidated into a single block grant and capped at current levels for the next 10 years, reducing spending by $1.8 trillion over that time, according to Rokita's office.
States would have sole authority to set eligiblity standards, benefit packages and provider reimbursement rates for the insurance program. Under the proposal, annual independent audits would be conducted to monitor states' use of federal funding. Forfeiture of federal aid and a 10 percent penalty would be incurred for misuse of funding, according to Rokita's office.
The bill will be co-sponsored by Rep. Paul Broun (R-Ga.), Rep. Tim Huelskamp (R-Kansas) and Rep. Jim Jordan (R-Ohio), an aide to Rokita told Governing. It is based on principles set out by 29 Republican governors last year, according to Rokita's office.
The viability of the legislation outside the House would be questionable. By handing full authority to establish eligibility and benefits to the states, it would seem to conflict with the Affordable Care Act, which requires states to cover residents with income up to 133 percent of the federal poverty level in 2014 and onward. Last year, Rep. Paul Ryan (R-Wis.) included a Medicaid block grant in his budget, which passed the House but was turned down by the Senate.