AutoInsuranceMM.Info – What is the Insurance – Utah and the ACA’s Medicaid expansion
Latest Utah Medicaid updates
Legislation enacted to expand Medicaid to 100% FPL, but federal approval is doubtful
Utah still has not expanded Medicaid, more than four years after federal funding for expansion became available. Governor Gary Herbert, a Republican, has pushed for expansion for years, but the Republican-controlled legislature in the state has thus far resisted all but the most incremental steps towards expansion. Lawmakers approved legislation in 2018 that would partially expand Medicaid, but winning federal approval is likely to be an uphill battle.
On March 27, 2018, Utah Governor Gary Herbert signed HB472 into law. The legislation directs the state to submit an 1115 waiver proposal to CMS by January 1, 2019, requesting approval for Medicaid expansion in Utah, but only for people earning up to 95 percent of the federal poverty level (really 100 percent, after the 5 percent income disregard; in 2018, the poverty level is $12,140 for a single person, and $25,100 for a family of four).
The legislation also calls for the waiver proposal to include a work requirement for people who gain access to Medicaid under the proposal, and a termination clause that would end Medicaid expansion if federal funding were to ever drop below 90 percent (under the ACA, federal funding for Medicaid expansion is gradually dropping until it reaches 90 percent in 2020, and is slated to remain at that level going forward). Utah’s legislation calls for aligning the Medicaid work requirement with TANF work requirements, which call for 30 hours per week, unless the person is a single parent with a child younger than six, in which case the requirement is 20 hours per week.
If implemented, the terms of HB472 would provide coverage for about 72,000 Utah residents by 2020 (increasing to 87,500 by 2024), as opposed to the 100,000 – 150,000 people who would become eligible if the state were to expand Medicaid coverage as called for in the ACA, to people earning up to 138 percent of the poverty level. Currently, people in Utah who earn between 100 percent and 138 percent of the poverty level are eligible for premium subsidies in the exchange, since they are not eligible for Medicaid. But people who earn below the poverty level are not eligible for premium subsidies or Medicaid, leaving tens of thousands of people in the coverage gap. HB472 would eliminate the coverage gap, if the state could gain federal approval and 90 percent federal funding for the proposed expansion.
But federal approval is a big question mark. Neither the Obama Administration nor the Trump Administration has ever allowed a state to tap into the ACA’s Medicaid expansion funding unless coverage is expanded all the way to 138 percent of the poverty level. Most recently, Arkansas proposed something similar to what Utah wants to do (among other changes), and the state’s proposed poverty level cap on Medicaid expansion was rejected by CMS, despite the Trump Administration’s vow to be as flexible as possible when considering states’ waiver proposals.
It’s worth noting that it’s cheaper for the federal government to cover the population between 100 and 138 percent of the poverty level under Medicaid, than to pay for premium subsidies. But it’s cheaper for the state to have that population covered by private plans in the exchange, with federal subsidies, since the state pays nothing at all for that option. If that population is covered under Medicaid, the state would be responsible for 10 percent of the cost. Clearly, it’s advantageous for the state to have that group on subsidized exchange plans, while it’s advantageous for the federal government to have them on Medicaid. From the enrollees’ perspective, Medicaid (including potential premiums and out-of-pocket costs) is significantly less expensive than subsidized plans in the exchange.
The work requirement called for in HB472 would likely be approved by CMS under the Trump Administration, as they have already approved work requirements for Indiana, Arkansas, and Kentucky. But capping eligibility at 100 percent of the poverty level could be a non-starter, putting Utah back to the drawing board in terms of Medicaid expansion and the coverage gap that still exists in the state.
Medicaid expansion supporters gathered enough signatures to get initiative on the 2018 ballot
Although lawmakers in Utah have approved partial Medicaid expansion that isn’t likely to win federal approval, Medicaid expansion proponents in Utah are working on another approach: a ballot initiative. They had to gather 113,143 signatures from registered Utah voters by April 15, 2018, in order to get the Utah Medicaid Expansion Initiative onto the ballot in the 2018 election.
Utah Decides, the group that was spearheading the signature drive, reported that they had turned in 165,000 signatures by the deadline. And on May 29, the signatures were certified by the Utah lieutenant governor, ensuring that the measure will be on the ballot in Utah in November 2018.
Nearly two-thirds of Utah voters are supportive of the ballot initiative. And numerous groups in the state are supporting the ballot initiative, including AARP Utah, and the Utah chapter of the American Academy of Pediatrics.
Maine voters passed a ballot initiative in the 2017 election to expand Medicaid, after their Governor had vetoed Medicaid expansion legislation several years in a row. But Maine’s governor has refused to move forward with implementation as of July 2018, and expansion might not happen until after a new governor is elected (the current governor is term-limited and will be replaced in the 2018 election). In Utah, however, Gov. Herbert has said that he will not block Medicaid expansion if the ballot measure passes, despite his opposition to the ballot initiative.
If passed, Utah’s ballot initiative would bypass lawmakers and implement full Medicaid expansion, as called for in the ACA. Coverage would be available to Utah residents with income up to 138 percent of the poverty level, or just under $35,000 for a family of four.
Very limited expansion approved in 2017, doesn’t help most uninsured Utah residents, and state is seeking to add a work requirement
In March 2016, Utah Governor Gary Herbert signed HB437 into law, providing for a limited version of Medicaid expansion. Utah House Majority Leader Jim Dunnigan noted that the legislation “targets those in extreme poverty” so it’s much less comprehensive than the Medicaid expansion called for in the Affordable Care Act (ACA).
Instead of expanding coverage to 126,000 people (as would be the case if the state were to accept federal funding for the ACA’s version of Medicaid expansion), HB437 expands coverage to about 9,000 – 11,000 of Utah’s poorest residents (other estimates say only 6,000). The limited expansion provides Medicaid for 12 months to people who are homeless, mentally ill, in need of treatment for substance abuse, or recently released from incarceration.
Utah’s limited expansion of Medicaid was slated to cost the state about $30 million a year ($13.6 million of that will come from hospitals in the state), and the federal government about $70 million a year. Democratic lawmakers — who felt that HB437 was “less than crumbs” — noted that full expansion of Medicaid would have cost the state $44 million a year (some estimates say $50 million), but would have brought in $420 million a year in federal funds, garnering far more value from those state dollars.
Utah submitted a Section 1115 waiver proposal (the Primary Care Network demonstration) to CMS in July, but CMS quickly responded, asking for additional information and an additional public comment period. The state had planned to implement the limited Medicaid expansion proposal in January 2017, but CMS approval didn’t come until October 31, 2017.
Under the terms of the approved waiver, the state was able to begin enrolling people as of November 2017. Utah residents can qualify for up to 12 months of coverage under the Medicaid waiver if they have income of no more than 5 percent of the federal poverty level (that amounts to no more than $603 in 2018), and are either chronically homeless or involved in the criminal justice program, and/or in need of substance abuse treatment.
In August 2017, the Utah Department of Health submitted an amendment to the Primary Care Network waiver, seeking permission to add a work requirement for the newly-eligible population. The amendment was still pending CMS approval as of April 2018.
House Republicans previously rejected expansion compromise
In October 2015, Utah House Republicans overwhelmingly rejected the state’s proposal to expand Medicaid to cover residents with household income up to 138 percent of poverty.
Just seven out of 63 Republicans in the Utah House of Representatives supported the Utah Access Plus proposal in a closed-door meeting to determine whether the measure had enough support to pass. Support from at least 38 Republicans was needed to keep it alive, as long-standing Republican House Caucus rules in Utah require enough Republican votes to reach the majority without counting votes from Democrats. Ultimately, it would not have mattered even if votes from Democrats had been considered, since that would have brought the total to at most 19 Representatives in support of Utah Access Plus – still well short of half the chamber.
Much of the debate over Utah Access Plus had to do with funding. Utah needed to generate about $50 million in order to cover the state’s portion of the cost of expanding Medicaid (the federal government funds the full cost through 2016, but after that, the state’s share gradually rises to 10 percent). Utah Access Plus relied on fees spread across the state’s medical providers and stakeholders, including hospitals, doctors, and managed care plans. A public hearing on the proposal drew significant criticism from healthcare providers who worried about the impact of the fees, particularly the fact that they could grow over time. For physicians, the fee was initially to be $67 per month.
The House’s rejection of Utah Access Plus effectively put Utah back at the drawing board in terms of Medicaid expansion. If lawmakers do not approve some sort of Medicaid expansion, they will miss out on $5.3 billion in federal funding by 2022. And until Medicaid is expanded, at least 41,000 (many estimates say more than 60,000) Utah residents remain in the coverage gap – ineligible for Medicaid and also ineligible for premium subsidies in the exchange.
What was Utah Access Plus?
Utah Access Plus was a compromise proposal reached by Utah’s “gang of six” earlier in 2015, after lawmakers rejected Governor Herbert’s Healthy Utah Medicaid expansion proposal during the 2015 legislative session. If it had won legislative support, Utah Access Plus would have used Medicaid funds to purchase private coverage for eligible residents. Because it was an alternative method of expanding Medicaid, it would have also needed HHS approval in order to obtain federal funding.
The “gang of six” included Governor Gary Herbert, Lt. Governor Spencer Cox, Senate President Wayne Niederhauser, House Speaker Greg Hughes, House Majority Leader Jim Dunnigan and Senator Brian Shiozawa. They worked together during the summer of 2015 to flesh out the details of a plan to replace two previous proposals (Gov. Herbert’s Healthy Utah plan and the House of Representatives’ Utah Cares plan). The gang of six announced in July 2015 that they had come to an agreement on a path to Medicaid expansion, but as of October, they were back to square one.
Governor Herbert has been working for years to expand Medicaid. The House’s failure to support Utah Access Plus was the second time he’s offered a proposal to lawmakers only to see it rejected. In October 2014, Herbert announced that he had come to a tentative agreement with HHS on his Healthy Utah plan that would have offered a modified, somewhat unique approach to expansion.
Governor Herbert unveiled the details of the HHS-approved Healthy Utah program at a meeting with legislators in December 2014. The proposal would have covered 126,000 Utah residents, but the legislation to implement it, SB 164, failed in committee in March 2015. Lawmakers in the House Business and Labor Committee instead voted to recommend the Utah Cares proposal (HB 446) for further consideration. Utah Cares would have cost the state more, garnered less in federal funding, and covered fewer people with much more limited benefits. It had also not received tentative approval from HHS the way Herbert’s Healthy Utah plan had. Ultimately, neither bill advanced in the legislature during the 2015 session.
Who is currently eligible for Medicaid in Utah?
Utah was among the states that initially implemented Medicaid in the first year it was available; their program became effective in July 1966. But existing Medicaid coverage is mainly limited to children and those who are elderly, disabled, or pregnant, as well as women with breast or cervical cancer and very low-income parents.
- Pregnant women with household income up to 139 percent of poverty. The mother receives full Medicaid coverage throughout the pregnancy and for 60 days postpartum.
- Children with household incomes up to 139 percent of poverty (CHIP is available to children with household incomes up to 200 percent of poverty).
- Women with household incomes up to 250 percent of poverty are eligible for certain cancer screenings through the Utah Cancer Control Program (UCCP). If they are found to have breast or cervical cancer during the screening, they are eligible for full Medicaid coverage. If they have a precancerous condition (breast or cervical), they are eligible for three months of Medicaid.
- Parents with dependent children can get Medicaid coverage if their household income is under 55 percent of poverty (this used to be 44 percent of poverty, but it increased as of July 2017, under the terms of the state’s demonstration waiver based on HB437).
- Utah provides Medicaid for various other select populations – check their list to see if you might be in any of the eligible groups.
How do I enroll?
- You can enroll online at HealthCare.gov or through the state Medicaid office
- You can enroll by phone at 1-800-318-2596 (HealthCare.gov phone application)
- You can print a paper application (available in English and Spanish) and submit it by mail or fax (addresses and fax number here).
- You can apply in-person at your local Department of Workforce Services office (click here to see a map and find your local office).
Small enrollment growth
From 2013 to July 2016, total enrollment in Utah’s Medicaid/CHIP program increased by 4 percent (12,828 people), but by the end of 2017, net enrollment growth since 2013 stood at just 2 percent, despite the increased eligibility limit for low-income parents, and the limited expansion of Medicaid for homeless people with no income, which took effect in November 2017.
How will expanding Medicaid help Utah?
The Kaiser Family Foundation estimates that 41,000 people are still in the coverage gap in Utah, unable to qualify for Medicaid and also ineligible for exchange subsidies to help them purchase private insurance [this is a significant reduction from KFF’s 2014 estimate (although it’s higher than their 2015 estimate), and it’s also significantly lower than the 77,000 people that the University of Utah has estimated are in the coverage gap in Utah. But Andrew Sprung has calculated the coverage gap in Utah by extrapolating based on the nationwide data, and he came up with 34,000 people; regardless of which number is correct, there are tens of thousands of people in Utah who have no realistic access to health insurance]. Subsidies in the exchange are only available to people with household incomes between 100 percent and 400 percent of poverty level, because Congress had intended for Medicaid to be available to everyone under the poverty level.
According to US Census data, Utah’s uninsured rate was 14 percent in 2013, and 12.5 percent in 2014. Although it had dropped to 8.8 percent by 2016, extending Medicaid coverage to the state’s poorest residents would help to make a much larger dent in the uninsured rate.
Healthy Utah supporters estimated that 126,000 people in the state would be newly-eligible for Medicaid coverage if the state expands coverage up to 138 percent of the poverty level and some estimates have put the total number of people who would become eligible as high as 150,000. Many of them are currently eligible for subsidies to purchase coverage in the exchange, because their income is between 100 percent and 138 percent of the poverty level. But they would have significantly lower out-of-pocket expenses with Medicaid.
High public support for Medicaid expansion
A poll conducted in June 2014 found overwhelming public support in Utah for Governor Herbert’s Healthy Utah plan. 88 percent of respondents favored the Governor’s approach over doing nothing, and 70 percent preferred it to standard Medicaid expansion as outlined in the ACA.
And as of early 2018, about 62 percent of Utah voters were in support of the proposed ballot initiative to expand Medicaid. If supporters can gather 113,000 signatures by April 15 (which they are on track to do), the initiative will be on the November 2018 ballot in Utah.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.