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Utah Senate passes bill limiting Medicaid expansion in favor of costly alternative

The bill would lower the number of people eligible for Medicaid coverage under the expansion.

Credit: Getty Images
Credit: Getty Images

The Utah Senate voted Monday to partially repeal a ballot measure that would have expanded Medicaid to nearly 150,000 low-income residents in the state, weeks after voters overwhelmingly cast their ballots in favor of the initiative.

The legislation now moves to the state House, where it is also expected to pass. Gov. Gary Herbert (R) is also expected to sign the measure.

Senators voted 22-7 largely along party lines to pass GOP-sponsored legislation that would cap the pool of people eligible for Medicaid coverage and would end up costing the state seven times more than the ballot measure, which was approved in November. While the ballot initiative — Proposition 3 — would allow individuals earning up to 138 percent of the federal poverty line to enroll in Medicaid, the bill would limit the beneficiaries to those earning up to 100 percent of the federal poverty line.

In addition to expanding Medicaid eligibility, the ballot initiative included a provision, which the bill maintains, that would increase the state’s sales tax on non-food items by 0.15 percentage points (from 4.7 percent to 4.85 percent). That sales tax would “more than cover the state’s cost of expansion,” according to Center for Budget and Policy Priorities Senior Policy Analyst Jesse Cross-Call.

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But if the bill is signed into law, the state would have to pay 30 percent — compared to just 10 percent under Prop 3 — of the costs for new Medicaid beneficiaries. 

That’s because, under the Affordable Care Act, the federal government pays 90 percent of the cost of coverage for states that opt to expand their Medicaid programs to people earning up to 138 percent of the federal poverty line. Without the expansion, Utah is eligible to have just 68 percent of its Medicaid costs covered by the government.

The bill that advanced Monday would direct the state to pursue a funding waiver asking the Centers for Medicare and Medicaid Services (CMS) to cover a smaller group of people at the 90 percent rate intended for Medicaid expansion states. While bill sponsor Sen. Allen Christensen (R) expressed confidence that the CMS will agree to this, the agency has never done so for any other state. According to the Salt Lake Tribune, the bill would automatically repeal Medicaid expansion if it does not receive a waiver from CMS.

“There’s a lot of talk that we’re simply repealing Prop 3,” Christensen said Monday. “We’re not.”

“To get this 90-10 waiver we’re going to have to wait a while typically,” Christensen admitted Monday. He added that, in the meantime, the Senate would pursue a short-term waiver, dubbed a “bridge plan,” that would go into effect on April 1, when individuals earning up to 100 percent of the poverty level are enrolled in Medicaid. That would hold the state over until the state receives the waiver covering 90 percent of the state’s Medicaid costs. 

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“What the Utah Senate is embarking on is a very risky strategy of not only covering fewer people but … this whole thing could collapse on itself in the whole back-and-forth with CMS,” Cross-Call said. “Or, the back-and-forth with CMS could go on and on and on and delay coverage.”

Republicans have claimed that the measure is fiscally responsible, but have little to show for it. After repeated delays in the vote due to uncertainty over the cost of the bill, a fiscal projection note released last week estimated that the bill would cost $72 million to cover about 50,000 fewer people than the ballot initiative, compared to approximately $10 million for Prop 3 in the same time span.

The bill also conditions Medicaid eligibility on reported work, a policy that requires low-income residents to report a specific number of hours of work or volunteering in order to keep their health care coverage. Last week, Christensen describe his provision as a “work effort,” however, and likened the requirement to the state’s work requirement for food assistance, which requires beneficiaries to apply as job seekers with the state. In Arkansas, Medicaid work requirements have resulted in a dramatic loss of coverage to beneficiaries.  

Last November, 53 percent of Utah voters approved the Medicaid expansion ballot initiative, a reality that state Republicans have readily dismissed.

“The voters didn’t have all the information,” Sen. Jacob Anderegg (R) said Monday. “We can’t print money … I have a constitutional mandate to balance the budget … Going back to full expansion doesn’t work.”

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Utah was one of three states — including Nebraska and Idaho — to vote favorably for ballot initiatives to expand Medicaid, though Utah’s initiative was the only one to include a pay-for. Despite that, efforts to hobble the referendum began as soon as the legislature gaveled in last week, as Democrats struggled to stall the process.

“This is, to me, the most irresponsible way of bringing programs and services to our constituents when they already voted … The people of Utah deserve this,” said Sen. Luz Escamilla (D) on Monday. She proposed an amendment that would allow Prop 3 to go into effect if the CMS waiver is not approved, but it was rejected.

Last week, 40 groups, including the Utah Health Policy Project, United Way, AARP, and Voices for Utah Children, released a letter calling on the Utah legislature to implement the full Medicaid expansion approved by voters.

“Voters did not choose to add restrictions or caps that will only delay implementation,” the letter stated.