Utah’s Waiver Approval Limits Enrollment, Restricts Access to Care

The Centers for Medicare and Medicaid Services (CMS) issued its initial approval today of Utah’s Medicaid waiver that expands coverage to some low-income adults but rejects a full expansion of Medicaid that would have covered tens of thousands more.

CMS gave Utah unprecedented authority to cap enrollment based solely on state funding decisions, and it also approved the state’s proposal to take coverage away from people not meeting job training and search requirements. But it deferred a decision on Utah’s request to receive the Affordable Care Act’s (ACA) higher matching rate for federal funding without fully expanding Medicaid to people with incomes up to 138 percent of the poverty line — an approach that CMS has repeatedly refused to approve, including under the Trump Administration.

Today’s approval falls far short of the policy that Utah voters adopted last November, when they voted to take up the ACA’s expansion of Medicaid to low-income adults, which would have extended Medicaid coverage to about 150,000 Utahns. In February, Utah policymakers repealed the voter-approved expansion and directed the state to pursue a series of waivers that would provide far less coverage than the voter initiative would have. Specifically, they directed Utah’s Medicaid agency to request CMS’ approval to:

1. Cover only people with incomes below 100 percent of the poverty line, instead of people with incomes up to 138 percent of the poverty line (i.e., a “partial expansion”).
2. Take coverage away from people not meeting “employment and training” requirements.
3. Cap enrollment based on state appropriations, meaning that the state could deny coverage to eligible people when it experiences budget pressures.
4. Impose a per capita cap on funding for expansion enrollees, meaning that the federal government would only provide funding up to a pre-determined per-person limit.
5. Receive the ACA’s enhanced federal matching rate of 90 percent for a partial expansion, instead of Utah’s regular Medicaid matching rate of 68 percent.

Today, CMS approved the first three of these policies. Utah has not yet submitted a waiver requesting a per capita cap, and CMS was silent on Utah’s June 2018 request for enhanced match for partial expansion. The Trump Administration previously denied requests from Arkansas and Massachusetts for an enhanced match for partial expansion, and the White House reportedly rejected CMS’ recommendation to approve one in Utah last year, although CMS Administrator Seema Verma said that the policy is again under review.

Today’s waiver will mean that tens of thousands fewer people will gain Medicaid coverage than under the voter-approved initiative.

First, the waiver leaves out about 50,000 near-poor individuals who would qualify for coverage under a full expansion. While this group can obtain coverage through the ACA marketplaces, near-poor adults are less likely to sign up for coverage through the marketplaces than through Medicaid, due to premiums and other barriers.

Second, people will almost certainly lose out on coverage due to the proposal to take coverage away from people who don’t complete job search and training requirements, or who can’t overcome the red tape when requesting an exemption. CMS’ approval of Utah’s waiver comes just days after federal court decisions striking down restrictive Medicaid waivers in Arkansas and Kentucky that included similar requirements.

Finally, CMS is letting Utah cap the number of eligible people who can enroll in coverage. Once the number of enrollees reaches the cap, other eligible people will be shut out of coverage.

Enrollment caps are arbitrary — they limit enrollment on a first-come, first-served basis and can leave similarly situated people treated very differently. Consider, for example, two 50-year-old women with diabetes who both lose their jobs. One woman loses her job when Utah’s budget is in surplus and can enroll in Medicaid. But the second woman loses her job a year later, when Utah is experiencing a budget crunch and has imposed an enrollment cap. She will become uninsured because enrollment is capped when she applies.

This may keep eligible adults from getting necessary health care. In the example above, the woman who enrolled could get insulin and other life-saving treatment for her diabetes, while the second woman likely wouldn’t be able to afford to buy her insulin and other medications. What’s more, because Utah can set the enrollment cap based on its budget, it’s likely to impose tighter caps during recessions, which is exactly when more people are unemployed and need coverage.

Approving an enrollment cap today breaks with precedent, and reverses past CMS guidance. Specifically, there’s no precedent for letting a state impose an enrollment cap on coverage for which the federal government is offering federal funding that rises to meet rising need.

Before the ACA, CMS approved state Medicaid waivers to expand coverage to low-income adults without children only if the federal government did not have to provide any additional funds for such expanded coverage. CMS therefore let states, including Utah, cap enrollment and provide fewer benefits as a way as a way to find savings that would offset the cost of their expansions. But the rationale behind those caps doesn’t apply under the ACA, as the federal government is offering the additional funding to cover all low-income adults in Utah.

As federal courts affirmed just this week, Medicaid’s purpose is to provide health insurance to low-income people. Today’s waiver approval does just the opposite, restricting access to coverage and care for those who need it.