What to do about Medicaid? Costs are burgeoning. Federal outlay for Medicaid is $565 billion annually (2016 figures), not far behind total federal defense spending. The U.S. is so debt-burdened that it cannot pay its bills without enormous borrowing, and it’s because of programs like Medicaid. We cannot persist in doing this.
Still, whether you like it or hate it, Medicaid is apparently here to stay — at least until federal and state governments can’t fund it anymore.
Medicaid pays the medical bills for one in five Americans. According to the Kaiser Foundation, Medicaid is less costly per person than private insurance and has good outcomes. The Kaiser Foundation reports, “Medicaid plays an especially critical role for certain populations, covering: nearly half of all births in the typical state; 76 percent of poor children; 48 percent of children with special health care needs, and 45 percent of non-elderly adults with disabilities … and more than six in ten nursing home residents.” Seventy-five percent of Americans have a favorable view of Medicaid.
And Utah voters have an important decision to make about expanding Medicaid.
Established in 1965 as part of the War on Poverty, Medicaid has become an essential part of the American safety net for the disabled, pregnant women, children, low-income families with children and low-income persons needing long-term care.
The federal government has historically paid about 70 percent and the state around 30 percent for Utah’s Medicaid program.
The Affordable Care Act (ACA) changed Medicaid eligibility dramatically for people in states that expand Medicaid. First, it extended eligibility to everyone earning up to 138 percent of the federal poverty limit (FPL). Second, the federal government’s match for expanded Medicaid recipients was 100 percent in 2014-2016, ratcheting down to 90 percent in 2020 and thereafter. Even with such a rich federal match rate, 18 red states including Utah have not expanded Medicaid. Medicaid expansion would bring about $700 million annually in new federal matching dollars to Utah.
But it’s not all roses. Many expansion states have seen membership and expenditures grow far beyond projections. Even with the 90 percent federal match, states are struggling to keep up with costs. Our Legislature didn’t expand Medicaid primarily out of fear it would break the bank at some point.
The 2018 ballot will ask voters to make an important choice on Ballot Proposition 3 to fully expand Medicaid. The measure extends eligibility to everyone under age 65 who earns less than 138 percent of the federal poverty level ($16,600 for an individual and $34,000 for a family of four in 2017). Utah’s share would be paid for by an increase in non-food sales taxes of .015 percent, from 4.70 percent to 4.85 percent. Between 100,000 and 150,000 people would become eligible under the proposition.
There is more: In the 2018 legislative session, the Utah Legislature passed HB472 directing the Utah Department of Health to seek a federal waiver to expand Medicaid subject to important conditions:
Eligibility would be extended to those earning 100 percent of FPL or less, but asks the federal government for the enhanced 90 percent match.
The bill requires able-bodied recipients to have a job, be looking or training for a job.
Probably most important for the legislative Republican majorities, the measure allows caps on enrollment when expenditures exceed appropriated funds. Between 70,000 and 90,000 would become eligible for Medicaid under HB472.
HB472 faces serious hurdles:
The federal government has never approved expanding only to 100 percent of FPL with the enhanced federal match; many doubt they have the legal ability to do so.
Some work requirements in other states have been disallowed. The Obama administration saw Medicaid as an entitlement that cannot be conditioned on anything beyond proving eligibility.
Usually, the federal government imposes no caps in Medicaid funding, and caps for states have not been generally allowed either.
Utah is likely to expand Medicaid soon. The primary issue is whether we’ll do it at the ballot box or through a unique, Utah-style federal waiver, a la HB472.
Disclosure: The author is the president of the Utah Hospital Association. The state will pay its share of expansion under HB472 by taxing Utah’s hospitals.