Senior Policy Analyst
Utah policymakers this week enacted Senate Bill 96, repealing a voter-backed ballot initiative (Proposition 3) to expand Medicaid under the Affordable Care Act (ACA) and provide health coverage to 150,000 Utahns. In its place, the state will pursue a series of unusual and uncertain federal waivers to impose a coverage scheme that Governor Gary Herbert claims “provides the coverage sought for by Proposition 3.” In reality, Utah’s new law will fall far short of Proposition 3 because its new restrictions will leave tens of thousands of Utahns without coverage and the coverage of thousands more in yearly limbo and subject to the whims of state lawmakers. Given the clear benefits of the Medicaid expansion, the Utah plan isn’t a reasonable alternative for other states considering an expansion.
Under Proposition 3, Utah would have become the 34th state (plus the District of Columbia) to implement the expansion, in which non-elderly adults with incomes below 138 percent of the federal poverty line gain Medicaid eligibility. Instead, the new law splits the expansion group in two. Utah projects that 100,000 people with income below the poverty line would gain Medicaid coverage (though significant restrictions apply, as discussed below), and another roughly 50,000 with income between 100 and 138 percent of the poverty line would be directed to the ACA’s marketplace, where they can buy coverage with federal tax credits.
Whether the federal Centers for Medicare and Medicaid Services (CMS) will approve this partial expansion is an open question but, even if it does, Utah will fall far short of its coverage projections. For one, near-poor adults are less likely to sign up for coverage through the marketplace than through Medicaid, due to premiums and other barriers. And the new law directs the state to impose harmful Medicaid eligibility restrictions, including:
To be clear, we don’t know whether CMS will approve all of Utah’s proposals. Beyond the unprecedented enrollment caps, the new law tries to get the federal government to cover the Medicaid expansion’s enhanced 90 percent federal matching rate for a partial expansion, rather than the state’s regular 68 percent matching rate on total Medicaid costs. CMS’ long-standing guidance says that states can only get the enhanced rate if they cover the entire expansion eligibility group. Indeed, CMS recently didn’t approve requests from Arkansas and Massachusetts for the enhanced match rate for a partial expansion.
A last-minute amendment to the law stipulates that if CMS doesn’t approve all of Utah’s waivers by the end of this year, the state will revert to the full expansion. But it’s unlikely that the law will ever result in the full expansion. For one, the law stipulates that if the full expansion takes effect, the state must put additional restrictions on coverage that include a likely work requirement, reduced benefits, and other “budget controls” that will limit enrollment. Further, Utah lawmakers have already shown their willingness to repeal the Medicaid expansion.
This week, Utah lawmakers traded the certainty of large gains in coverage and improved health outcomes under the full Medicaid expansion for a risky scheme that will severely limit low-income Utahns’ access to care.
|Utah Medicaid Law Would Impose Significant Restrictions on Coverage|
|Senate Bill 96 (enacted)||Proposition 3 (full expansion)|
|Eligibility Level||100% Federal poverty line||138% Federal poverty line|
|Takes coverage away for not meeting work requirement||Yes||No|
|Per capita caps that limit federal funding||Yes||No|
|Enhanced Medicaid match rate||Requested, but no such proposal has been approved to date||Guaranteed|
|Requires CMS waiver approval to implement||Yes||No|