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For Utah, Medicaid Expansion Is Better Choice Than Flawed, Limited Waiver

The Centers for Medicare & Medicaid Services (CMS) has approved an amendment to Utah’s section 1115 Medicaid waiver through which the state will provide Medicaid coverage to a small, poorly defined group of adults with no income — but that’s well short of the coverage gains that Utah could make if it adopted the Affordable Care Act’s Medicaid expansion for poor and near-poor adults.

Under the Medicaid expansion, which 32 states and Washington, D.C. have adopted, the federal government pays a matching rate to cover people with incomes up to 138 percent of the poverty line that’s higher than the state’s matching rate under its basic Medicaid program. The regular rate averages 57 percent across the states and is 70 percent in Utah. Under the Medicaid expansion, the federal government is picking up 95 percent of the costs in 2017, a rate that will decline until 2020, after which it will remain at 90 percent. Utah, where about 201,200 adults, or almost 12 percent of the state’s adults, are uninsured, could adopt the expansion and receive this enhanced match to cover about 91,000 uninsured adults.

Rather than adopt the expansion, Utah amended its 1115 Medicaid waiver to cover just 6,000 childless adults with no income who meet very strict criteria such as being homeless, leaving jail or prison, or having a behavioral health condition. Under the waiver, the federal government will continue to match Utah’s Medicaid spending at its regular matching rate.

The waiver will likely fall short of Utah policymakers’ goals to better serve very vulnerable populations, despite their claims.

  • The waiver perpetuates barriers to health coverage. To qualify, people experiencing homelessness must meet one of two definitions: they must either be chronically homeless (meaning they’ve been homeless for a year or repeatedly homeless over three years) and have a chronic physical or behavioral health condition; or they must need substance use or mental health treatment and have lived for six months within a 12-month period in a place not meant for human habitation (on the street, in a car, etc.) or in an emergency shelter or safe haven. These strict criteria could create a perverse incentive for people to remain homeless to get health care.
  • The waiver doesn’t provide the benefits people need to exit homelessness, jails, prisons, or other institutional settings. Utah’s waiver doesn’t include an enhanced benefit package designed for people who are chronically homeless, exiting jails or prisons, or leaving institutional settings like mental health hospitals. Services such as help finding housing, assistance filling out rental applications, eviction prevention, and linking people to community support services often aren’t included in states’ Medicaid programs but can be reimbursed under Medicaid; California, New York, Rhode Island, and Washington all use waivers to provide these services through Medicaid.

    For example, New York’s Medicaid supportive housing demonstration program has achieved a 40 percent reduction in inpatient hospital stays, a 26 percent reduction in emergency room visits, and a 15 percent reduction in Medicaid costs for high-cost, high-need Medicaid beneficiaries with housing instability. Instead of creating more supportive housing or other innovative strategies that integrate housing and services, Utah’s waiver covers a menu of clinical services that fall short of the comprehensive support services that people with chronic health conditions and long histories of homelessness or institutionalization need to maintain their housing and achieve better health outcomes.

  • The waiver doesn’t ensure long-term health coverage. If, after 12 months, individuals no longer meet the strict eligibility criteria — if, for instance, they start earning income through work — they will lose their Medicaid coverage. Health coverage is a life-long need, especially for people with chronic physical or behavioral health conditions.

Rather than using a flawed, limited waiver to cover vulnerable residents, Utah should follow the path of 32 other states and Washington, D.C. and expand Medicaid to ensure that all Utahans have access to coverage and get the treatment they need.

Peggy Bailey
Executive Vice President for Policy and Program Development