Skip Navigation

CMS Approves Utah’s Medicaid Work Rules After Rejecting Partial Expansion

February 6, 2020

The federal Centers for Medicare and Medicaid Services (CMS) approved a work requirement for enrollees in the state’s expanded Medicaid program.

The approval arrives several months after CMS rejected Utah’s request for a “partial expansion” program that called for full expansion funding while limiting enrollment to able-bodied adults below 100 percent of the poverty level, not 138 percent as required by the Affordable Care Act. Utah voters approved full expansion in November 2018. 

Utah is now enrolling able-bodied adults in Medicaid whose annual income is up to 138 percent of the poverty level. The Utah Department of Health estimates 120,000 people will be eligible for the expanded program.

Utah sought permission for partial expansion and its Medicaid work rule under Section 1115, a provision of the Social Security Act of 1935 authorizing CMS to approve state-led reforms such as cost-reduction programs and eligibility changes.

Few Recipients Affected

Utah state Sen. Allen Christensen (R-North Ogden) says the state’s Medicaid work rule is similar to its rules for another federal program it administers, the Supplemental Nutrition Assistance Program (SNAP). As with SNAP, the Medicaid work requirement is very limited, says Christensen.

“An estimated 80 percent of the newly eligible people on Medicaid will be excluded from it,” Christenson told Health Care News. “If there’s a health problem, if you’re a caretaker, if you’re a parent, if you’re pregnant, if you’re disabled, and several other things like that, it excuses you from the work requirement.”

Enrollees who are not exempt need only search for gainful employment, not actually be working, says Christensen.

“The work requirement is not even a ‘work requirement,” says Christensen. “It says you just have to look for a job, take job training to qualify for your job, and at least submit a certain number of applications each month.”

Double-Edged Sword

Although states like Utah are attracted to the additional federal funding for Medicaid expansion, it will lead to benefit cuts, says James Czerniawski, a technology and innovation policy analyst at the Libertas Institute.

“The quality of health care for individuals currently receiving Medicaid benefits is mediocre, at best,” said Czerniawski. “Medicaid expansion may achieve its goal in the short term, but inevitably—as the federal government cannot afford to pay for this Medicaid expansion in the long run—states would be forced to pay an ever-increasing amount for expansion. Eventually, the state would have to cut Medicaid benefits for either a portion of recipients or cut the quality of care for all individuals on Medicaid to avoid going into massive debt.”

Medicaid expansion is designed to outgrow state budgets over time, says Czerniawski.

“Medicaid spending has been increasing for many states since 2000,” said Czerniawski.  “In 2017, states were required to take on 5 percent of the cost of expansion, and now that share has gone up to 10 percent. If [states] are not careful, they may find themselves in a position where Medicaid is crowding out funding that would normally go towards other equally important state projects.”

More Demand, Same Supply

Christensen says Medicaid expansion adds to the demand for health care without increasing the supply.

“The one thing no one wants to address is we’re putting 100,000 new people into care, and we didn’t get another doctor or nurse,” Christensen said. “We didn’t expand the service; we just expanded the welfare rolls.”

Poverty Trap Expansion?

Expanding Medicaid may trap people near the poverty level, says Czerniawski.

“Medicaid should not become a weight that keeps people in the system,” said Czerniawski. “The goal should be to lift people out of poverty and use those programs as a stepping stone on their path to prosperity.”

Entitlement programs shrink the economic pie instead of expanding prosperity, says Christensen.

“With Medicaid expansion, someone has to pay the bill sooner or later,” said Christensen. “Even in this whole country, we can’t keep giving things away to more and more people and still maintain a vibrant economy. You’re taking one person’s money and giving it to someone else. That’s not how the Constitution in this country was set up.”

Jesse Hathaway (think@heartland.orgis a policy advisor to The Heartland Institute.

Author
Jesse Hathaway is a policy advisor for budget and tax issues at The Heartland Institute.
media@heartland.org @JesseinOH