Utah limits Medicaid expansion despite voter referendum

by NCN Health And Science Team Last updated on March 29th, 2019,

Salt Lake City, Utah: Utah Governor Gary Herbert signed legislation on Monday that replaced a voter-approved Medicaid expansion with a more restrictive initiative.

In November Utah citizens voted for the full expansion of Medicaid through a ballot initiative. With the passage of Herbert’s legislation, Medicaid is only expanded partially, with full expansion contingent on federal action.

The original proposition allowed low-income citizens earning up to 138 percent of the federal poverty level to enroll in Medicaid. Additionally, the state’s cost of the Medicaid expansion was to be covered by an increase in sales tax. While the federal government was to pay 90 percent of the expansion, Utah’s government would only be responsible for 10 percent.

In contrast to the proposed initiative, the bill, SB96, allows for the partial expansion of the state’s Medicaid program to occur on April 1, 2019. Partial expansion refers to limitations on Medicaid expansions as described by the Affordable Care Act (“full” expansion). Instead of the originally proposed 138 percent cap, the new legislation extends Medicaid eligibility up to only 100 percent of the poverty level. Additionally, the legislation expands Utah’s coverage of the cost to 30 percent rather than 10 percent.

Utah must receive federal approval for a partial Medicaid expansion, as the state will still receive funding but effectively cover less of the population. The federal government has yet to approve a partial expansion, denying Arkansas and Massachusetts. If the federal government does not approve, Utah’s legislation allows for the full expansion of Medicaid with additional requirements for enrollees. Such examples are the requirement to work or remain on workplace insurance.

Herbert, in a statement, said the legislation “balances Utah’s sense of compassion and frugality.”

“It is now time to set aside differences and move forward to get those in greatest need enrolled on Medicaid and on the federal health care exchanges,” he said.

Critics decried the legislation. “The legislature is trampling on the clear will of voters, and it’s stripping tens-of-thousands of Utahns of access to care in the process,” said Jonathan Schleifer, executive director of the Fairness Project, a labor-aligned group that helped bankroll the successful ballot measure last fall. “It seems many members have forgotten they’re supposed to work for the people of Utah — not special interests or extreme ideologues.”

The Utah law marks the second time Republican leaders have blocked ballot measures approving Medicaid expansion in states that had long refused the program. For more than a year, former Maine Gov. Paul LePage fought a 2017 ballot measure ordering the state to expand coverage to 70,000 low-income adults, and the program only took effect after his Democratic successor Janet Mills took office last month.

The Utah legislation, spearheaded by Republican leaders critical of the Obamacare expansion, will extend Medicaid for low-income adults with incomes below the federal poverty line, short of Obamacare’s eligibility threshold. The 2010 health care law required states to expand Medicaid to those earning up to 138 percent of the federal poverty line — or about $17,200 for an individual — to receive enhanced funding from the federal government.

Utah will ask Trump health officials to approve billions of dollars in additional Obamacare funds for Medicaid despite not covering the law’s entire expansion population. The state will also ask the administration to approve enrollment caps if program costs exceed expectations. The federal government has never approved either idea, and Obamacare supporters say the state is making a risky gamble on a plan that could flout federal Medicaid law.

However, it’s still possible Utah could later fully expand Medicaid. If the Trump administration refuses the state’s plan, the legislation includes a trigger automatically adopting the Obamacare expansion while adding requirements for some enrollees to work or remain on workplace health insurance coverage if available.

Patient groups and Democrats waged an intense campaign to pressure Republican lawmakers to accept the traditional Medicaid expansion, which was supported by 53 percent of voters in November. The ballot measure called for expanding Medicaid to roughly 150,000 adults starting April 1.

Republican lawmakers argued Utah cannot afford Medicaid expansion, even as they approved a plan that will cost more initially — before the state could potentially receive enhanced Obamacare funding from the federal government. The current Utah plan will cover about 90,000 people, and it will cost the state $49 million more than traditional expansion in the first two years. Poor adults earning just above the poverty line, who would otherwise be enrolled in Medicaid expansion, are eligible to receive generous Obamacare subsidies to purchase private coverage.

Herbert and Republican lawmakers in Utah have insisted that the Trump administration will approve the enrollment limits and boosted federal funding the state is requesting through a waiver. Herbert said he has discussed the plan with Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, and other federal health officials.

CMS declined to comment on the Utah proposal, saying it does not discuss pending waiver applications. It will likely take months for the federal Medicaid agency to review Utah’s request.

Obamacare advocates last November also mounted successful Medicaid expansion ballot campaigns in two other red states, Idaho and Nebraska, However, local lawmakers there haven’t yet agreed on how to fund their states’ share of program costs.

The federal government covers at least 90 percent of the costs for Medicaid expansion enrollees, a much more generous rate than it pays for the traditional Medicaid program covering children, pregnant women and people with disabilities.

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