SALT LAKE CITY — After years of debate over Medicaid expansion at the Utah Legislature, the state's voters have a direct say this Nov. 6 over the federal program's future in the Beehive State.
If approved, Proposition 3 will raise the state sales tax to expand Medicaid eligibility to all Utahns in households earning 138 percent or less of the federal poverty level.
Utah Decides Healthcare, the campaign that collected more than 147,000 signatures to get Proposition 3 on the ballot, estimates the widened eligibility criteria would lead to 150,000 additional Utahns signing up for health insurance coverage through Medicaid.
The campaign also estimates the sales tax increase — from 4.7 percent to 4.85 percent on nonfood purchases — will raise $91 million in revenue, triggering more than $800 million in federal matching funds to pay for the costs incurred by new Medicaid enrollees.
What is expansion?
The Affordable Care Act required states to expand Medicaid eligibility to all residents at or under 138 percent of the federal poverty level. However, a 2012 Supreme Court ruling effectively made Medicaid expansion optional for each state.
Multiple attempts at expansion have failed to gain enough support at the Legislature in recent years, including Gov. Gary Herbert's Healthy Utah plan that he pushed for in 2015.
In 2016, state lawmakers passed a limited form of expansion, designed to bring Medicaid eligibility to 4,000 to 6,000 of Utah's very poorest, including the homeless, in an effort to improve behavioral health and substance abuse treatment options.
This year, the Legislature passed a more extensive form of Medicaid expansion, instructing the Utah Department of Health to submit a federal waiver requesting to make all Utahns earning 100 percent or less of the federal poverty level eligible for Medicaid.
But the federal government has yet to approve the waiver, which could provide a 90 percent federal matching rate despite not expanding coverage eligibility to the full extent under the ACA. Proposition 3 would eliminate the need for a waiver, or undergoing that same approval process.
The state coverage plan awaiting federal approval would leverage existing funding streams in the state budget and not need a tax increase, according to its supporters. It would also require the state to rescind Medicaid expansion if the federal matching rate dropped below 90 percent. Its supporters have estimated it would lead to 70,000 to 90,000 additional Utahns enrolling in Medicaid.
As of fiscal year 2017, 308,701 Utahns were enrolled in Medicaid, according to Utah Department of Health data.
Prop. 3 arguments
As of mid-October, there are no groups registered in Utah to campaign against Proposition 3 that have reported raising money. The lack of vocal opposition to Proposition 3 in Utah stands in contrast to coordinated efforts to defeat the state's medical marijuana initiative.
But the lack of an organized opposition does not mean Proposition 3 is without critics. Among those who wish to see it voted down is Rep. Jim Dunnigan, R-Taylorsville, architect of the targeted Medicaid expansion that passed in 2016.
"I think my biggest concern is the lack of accurate information that's being disseminated, the numbers that are being thrown out," Dunnigan said.
He calls it is disingenuous to claim Proposition 3 would bring Medicaid coverage to 150,000 additional Utahns, because some of those calculated in that number are children, all of whom are already eligible.
"There won't be one new child eligible under the initiative who's not already eligible today," Dunnigan said. "Don't tug at the heartstrings that this is going to help the kids because the kids can't get health care. Those kids are eligible right now."
RyLee Curtis, campaign manager for Utah Decides Healthcare, said about 22,500 children are included in the campaign's estimate of 150,000 new Medicaid enrollees resulting from Proposition 3.
Curtis said they are part of what is called "a woodwork effect," which refers to an estimated increase in enrollments among those who are already eligible that often accompanies Medicaid expansion.
Rather than an attempt to exaggerate Proposition 3's effects, she said, the children are included in the new enrollment figure as a way of being upfront about the extent of new costs expected to be associated with the proposed expansion. She added that using such methodology to predict new enrollments is standard practice.
"The campaign wanted to be honest about the expected cost to the state, and expected enrollment and 'woodwork,' including those 22,500 children is certainly going to be a part of those estimates," Curtis said. "So we wanted to make sure Utah voters knew exactly who they were going to extend coverage to and … how much that would cost the state."
She said strong evidence exists showing parents are much more likely to enroll their children in Medicaid when they themselves are eligible for the program.
"Once their parents are covered … they gain access to health care coverage," Curtis said, and if the campaign's estimates are correct, "that nearly cuts the uninsured rate for (Utah) children in half."
A frequent argument made on behalf of full Medicaid expansion is that it will provide better access to health care for low-income Utahns who fall into a so-called "coverage gap" by earning too much to be eligible for Medicaid, but too little to qualify for essential cost-saving subsidies on plans sold on the Affordable Care Act's federal health exchange.
But Dunnigan says that approximately 30,000 Utahns who would qualify for Medicaid under Proposition 3 are not in a coverage gap, and rather belong to households earning between 100 and 138 percent of the federal poverty level and are eligible for heavily subsidized private sector insurance plans from the exchange.
He said it is not wise or compassionate to disqualify those people from getting the subsidies on the federal health exchange by virtue of qualifying them for Medicaid.
"I support covering the people in the Medicaid coverage gap," Dunnigan said. "If we're going to do that, we should do it the smartest way possible, and … it doesn't make sense to cover people who aren't in the gap."
Curtis said in response that expanding eligibility to everyone up to 138 of the federal poverty level, as legally provided for under the Affordable Care Act, is the state's only realistic hope of expanding Medicaid in Utah while maintaining a 90-10 federal funding match.
She said other states recently tried to secure a 90-10 federal match with partial expansions of Medicaid, but there is no provision in the law for them to do so, and their requests have been rejected by the Trump administration. As a result, she said, the Legislature's version of expansion is unworkable and destined to fail.
Supporters of the Legislature's 2018 plan have said the Trump administration showed initial encouraging signs that it will seriously consider approving it. Dunnigan said "we did hear a couple months ago that some of the senior officials … liked the idea, but they were tasked with not doing anything until after the election."
Dunnigan said it is noteworthy that the Legislature-approved expansion would also be able to use existing state Medicaid funds and money used for a service called the Primary Care Network to avoid a tax increase.
Gov. Gary Herbert also feels strongly about expansion's effect on taxes, his deputy chief of staff Paul Edwards says, which is why Herbert favors the Legislature's plan and not Proposition 3.
"The governor … will not be voting for the initiative because he believes Medicaid expansion can and should be paid for without raising sales taxes," Edwards said.
Under Proposition 3, Dunnigan said, Utah is too vulnerable to being hurt by a drop in federal matching rate, whereas the Legislature's version has "circuit breakers" that prepare for federal fund cutbacks.
A higher number of enrollees than expected has been a difficulty for other states and could also make Utah's budget vulnerable under Proposition 3, he said.
Curtis said the Utah Decides Healthcare campaign crafted its estimated number of new enrollees prudently, and that "history is a really good indicator" that the federal matching Medicaid rates will hold relatively steady.
"Since the 1960s the Medicaid program has held really good on their federal match rate promises to the states," she said.