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Utah Lawmakers Weigh Medicaid ‘Improvement’ vs. Expansion

December 21, 2016

The state's expansion of Medicaid is unrelated to the Affordable Care Act, but delays at the federal level will prevent it from going forward.

The federal government’s pending revisions to Utah’s Medicaid expansion waiver will prevent the state from beginning to enroll up to 11,000 people in the program on January 1, 2017, the start date lawmakers intended.

Nate Checketts, deputy director at the Utah Department of Health, has informed the legislature’s Health and Human Services Interim Committee he expects the federal Centers for Medicare and Medicaid Services (CMS) to request changes to the state’s expansion program before President-elect Donald Trump takes office on January 20, 2017, The Salt-Lake Tribune reported on November 16, 2016.

The state legislature and Gov. Gary Herbert (R) authorized the Utah Department of Health to apply to CMS for a waiver to extend Medicaid coverage to individuals who are “chronically homeless,” “in need of substance abuse treatment or mental health treatment,” or on court-ordered parole or probation, under House Bill 437, approved in March 2016.

The law “distinguishes the health coverage improvement program from Medicaid expansion under the Affordable Care Act,” invoking Medicaid waiver authority states possessed before and after Congress and President Barack Obama passed the Affordable Care Act (ACA) in 2010, HB 437 states.

Democrats in the Utah State Legislature renewed calls for Medicaid expansion under ACA in September 2016, Salt Lake broadcaster Good4Utah reported in September 2016. Medicaid expansion under ACA would extend coverage to all Utahans with incomes below 138 percent of the federal poverty level, or $33,465 for a family of four in 2016.

Utah lawmakers will gain more control over the state’s Medicaid program if Trump and Republicans in Congress deliver on their campaign promise to establish block grants to help states pay for Medicaid programs tailored to serve each state’s unique population.

Improvement vs. Expansion

State Sen. Gene Davis (D-Salt Lake County) and House Minority Whip Rebecca Chavez-Houck (D-Salt Lake City) sponsored Senate Bill 77 to expand Medicaid fully in March 2016 and expressed the desire to open state Medicaid rolls to an additional 63,000 residents in the next session.

Derek Monson, director of public policy at the Sutherland Institute, says full Medicaid expansion would endanger the program’s solvency and undermine the quality of health care delivered to everyone in the state, especially new Medicaid enrollees.

Medicaid expansion adds tens, if not hundreds, of thousands of new patients into the health care market without any provision to increase the number of doctors, nurses, clinics, or hospitals available to treat them,” Monson said. “This means that those left behind will be the people who have the worst available health coverage. Typically, this is the lowest-income children and the disabled who currently qualify for Medicaid.”

The expansion, refused by 19 states, would encourage able-bodied people to depend on government instead of work, Monson says.

“Medicaid expansion under Obamacare harms the working poor by discouraging them from seeking economic self-reliance,” Monson said. “By making their health care dependent on a means-tested government program, Medicaid expansion places a limit on the income working families can receive before they lose their health care coverage.”

Harsh Choice

Financially prudent low-income families would have to choose between upward mobility and financial security, Monson says.

“Naturally, risk-averse working families will then become more hesitant about significant pay raises or better job offers, because they are immediately faced with the nerve-wracking question: Will this mean I lose my health insurance?” Monson said. “No one should be forced into making such a decision by government programs that ought to be designed to help the working poor move up, not down, the economic ladder.”

Market vs. Medicaid

Josh Daniels, a policy advisor at the Libertas Institute, says full Medicaid expansion under ACA would be a budget-buster.

“Full Medicaid expansion would cost the state at least $50 million annually, with that figure rising significantly as the federal match rate scales down,” Daniels said. “Moreover, unanticipated enrollment increases in the uncapped system could push Utah expenditures over $200 million once the promotional federal match rates expire.”

Utah lawmakers should tailor the state’s safety-net programs to meet specific needs, Daniels says.

“Instead of jumping over the federal Medicaid expansion cliff, Utah needs to look at each population in apparent need and find tailored, state-based solutions for each,” Daniels said.

Market-based solutions outside of Medicaid would flourish if Utah further distanced itself from federal regulations, Daniels says.

“The Medicaid system is based on old notions of the health care market,” Daniels said. “Government-centered care plans crowd out and stifle innovation. Efficient and low-cost health care solutions can thrive when stifling regulation is removed.”

Lawmakers should focus on creating an environment attractive to health care innovators, Daniels says.

“Concierge medicine, medical cost sharing plans, telehealth, and many other innovations are catching on,” Daniels said. “Utah needs to find ways to leverage these innovations to find sustainable solutions for those in need.”

Ben Johnson (therightswriter@gmail.com) writes from Stockport, Ohio.

Internet Info:

Michael McGrady, “Utah Limits Medicaid Expansion to Individuals with Greatest Need,” Health Care News, The Heartland Institute, April 8, 2016.

Linda Gorman, “Improving Medicaid with Block Grants and Consumer-Directed Health Care,” Health Care Policy Center, Independence Institute, September 15, 2011.

Image via Thinkstock

Author
Ben Johnson (therightswriter@gmail.com) writes from Stockport, Ohio.