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Utah Unrolls Partial Medicaid Expansion

May 1, 2019

Lawmakers in Utah rolled out a “partial” Medicaid expansion program April 1 after the Centers for Medicare and Medicaid Services (CMS) granted approval to enroll people making under $12,500 a year, less than the $17,200 limit voters approved in 2018.

CMS also approved the state’s request to cap enrollment.  Utah lawmakers are still trying to get enhanced funding for Medicaid expansion as they try to limit income levels that would qualify.  The state is also seeking a waiver for a work requirement. 

     Utah State Senator Allen Christensen (R)- Ogden said he is optimistic that CMS will approve the funding requests.  The limit on income is the first of its kind in the nation. 

     “I’m just really optimistic on this whole thing and maybe it’s misplaced and more wishing and hoping than optimism, but I think it’s going to happen,” said Christensen.

Medicaid Expansion Very Expensive

    Christensen proposed S.B. 96 after voters in November approved Medicaid expansion to adults with incomes up to 138 percent of the federal poverty level.  Under the Affordable Care Act (ACA), the federal government funds 90 percent of the costs for five years for the expanded coverage instead of the traditional 70 percent match. Still, Christensen says full expansion would have been too costly for Utah which is constitutionally required to maintain a balanced budget.  

    His bill, for “partial expansion” calls for requesting a 90 percent match on coverage to adults with incomes at or below the 100 percent poverty level. Adults with incomes between 100 percent and 138 percent poverty level could buy subsidized coverage through the federal exchange. 

     “I’ve opposed full expansion for years, but the people asked for it, so this is our solution,” said Christensen. “We have offered per capita caps which the federal government has liked, and we feel we’re the first ones to make that bargain so hopefully that will come through,” Christensen said.

     The Utah Governor’s Office of Management and Budget and the state’s Legislative Fiscal Analyst found voter approved expansion under Proposition 3, would create a $47 million deficit in fiscal year 2023 and $83 million deficit in FY 2025.

     Utah’s expanded Medicaid was scheduled to begin April 1, regardless of waiver approval. Christensen said lawmakers appropriated funds to cover the initial cost.

Expansion Does Not Guarantee Access

“The partial expansion is anticipated to cover about 90,000 people, which is about an estimated 60,000 fewer than full expansion,” said Naomi Lopez Bauman, director of health care policy at the Goldwater Institute. “If the federal government does not provide an enhanced match, it will actually be a bigger budget hit than full expansion which would be triggered in order to obtain the enhanced match,” Bauman said.

     Bauman says in either case, expansion does not mean improved health care access.

“There have been access issues under the Medicaid program for years with few doctors accepting new Medicaid patients,” Bauman said. “Expansion does not address these access issues, which are driven in large part by low reimbursements. Lawmakers across the country have handed out millions of Medicaid cards but have left the access issue unaddressed.” 

     Matthew Glans, a senior policy analyst with The Heartland Institute, which publishes Health Care Newssays partial expansion will create high costs and unsustainable enrollment growth. “Contrary to expansion supporters’ claims that the new federal funding is ‘free money,’ Medicaid expansion, even a partial expansion, is expensive,” Glans said. “It creates new costs for states the federal government doesn’t cover or will not cover forever, leaving state taxpayers on the hook for new liabilities.”

“It is important to remember federal matching funds are unlikely to remain permanent,” Glans said.“No long-term funding source for Medicaid currently exists, and the national government is already drowning in more than $21 trillion in debt.”

What States Need to Consider

Glans says Utah should consider the experience of other states that have expanded their Medicaid programs. “According to a study by the Goldwater Institute, three years into Arizona’s expansion, the costs paid by private payers increased to around 27 percent above hospital costs or approximately $2.1 billion,” Glans said. “Goldwater also found that hospital costs for health care services increased more for insured patients than for the uninsured and that total charges increased across the board.”

Ashley Bateman( from Alexandria, Virginia

Ashley Bateman writes from Alexandria, Virginia.