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Utah officials, advocates react to Trump administration's denial of expanded Medicaid funds

Lawmaker says fed denial to cost Utah 'tens of millions'

FILE - Sen. Allen Christensen, R-North Ogden, answers questions about SB96, the GOP leadership-backed replacement for the voter-approved Medicaid expansion ballot initiative, during discussion on the bill at the Capitol in Salt Lake City on Monday, Feb. 1
FILE - Sen. Allen Christensen, R-North Ogden, answers questions about SB96, the GOP leadership-backed replacement for the voter-approved Medicaid expansion ballot initiative, during discussion on the bill at the Capitol in Salt Lake City on Monday, Feb. 11, 2019.
Steve Griffin, Deseret News

SALT LAKE CITY — While state officials are disappointed by news the Trump administration will not give Utah its hoped-for funding for a partial Medicaid expansion, an advocacy group sees a reason for optimism.

"It's a big deal, and it's going to cost the state of Utah tens of millions of dollars," said Sen. Allen Christensen, R-North Ogden, who sponsored Utah's expansion plan, SB96.

Gov. Gary Herbert's office learned late Friday night of the White House's decision to reject the funding request before it had even been formally submitted, according to a joint statement from Herbert, Utah Senate President Stuart Adams, R-Layton, and House Speaker Brad Wilson, R-Kaysville.

FILE - In this Sept. 12, 2018, file photo, Utah Gov. Gary Herbert speaks during a news conference at the Utah State Capitol, in Salt Lake City.
FILE - In this Sept. 12, 2018, file photo, Utah Gov. Gary Herbert speaks during a news conference at the Utah State Capitol, in Salt Lake City.
Rick Bowmer, Associated Press

"We are deeply disappointed by this latest development," according to the leaders' statement. "We contemplated possible scenarios like this one, and SB96 ensures the program moves forward as we navigate the complicated federal rules and regulations involved in Medicaid."

The Centers for Medicare and Medicaid Services said the White House rejected the funding request because Utah's partial expansion plan allowed for fewer people to be enrolled than required by the Affordable Care Act, and fully funding it "would invite continued reliance on a broken and unsustainable Obamacare system."

Nevertheless, Utah's lawmakers say they will continue to work with the feds on the issue.

"We will continue to work closely with the administration to ensure that Medicaid expansion is carried out in a way that provides coverage for Utahns in need without creating an unsustainable financial burden on Utah taxpayers," the statement sent from the governor's office said. "We would like to reassure Utahns currently relying on Medicaid under the new expansion that they are still covered under the expansion that was activated on April 1."

That coverage will continue through June 30, 2020.

The bill lawmakers approved in February to replace the voter-backed Proposition 3 to expand Medicaid included a "fallback" plan. It would expand enrollment for adults earning up to 138% of the poverty level — as the voter-passed Proposition 3 would have — but includes provisions to control state costs.

The plan was created in the case that the federal government refuses to pay the 90% fund match for the partial expansion.

FILE - The tally board shows the vote total — 22 to 7 — as the Senate concurs with changes made to SB96, the GOP leadership-backed replacement for the voter-approved Medicaid expansion ballot initiative, at the Capitol in Salt Lake City on Monday, Feb. 11
FILE - The tally board shows the vote total — 22 to 7 — as the Senate concurs with changes made to SB96, the GOP leadership-backed replacement for the voter-approved Medicaid expansion ballot initiative, at the Capitol in Salt Lake City on Monday, Feb. 11, 2019.
Steve Griffin, Deseret News

Christensen called implementing the fallback plan "the most expensive route."

"And I have been opposed to it for a long time. And honestly, I wouldn't have voted for it … except the people, the public passed the referendum, and so we went ahead with it. But yes, it would be very expensive for the state to follow through with," Christensen said Saturday.

Advocates for a full Medicaid expansion in Utah saw the news as a beacon of hope.

"We're sort of cautiously optimistic here. I think what it looks like is that … the federal government couldn't approve the waiver as it was written with a partial expansion, but still meeting the full match. And it looks like they're apprehensive to do so for a couple of reasons," said Matt Slonaker, executive director of Utah Health Policy Project, which has been critical of changes to Proposition 3.

"But yeah, I really think it's time to turn the page. We don't really want to propose a waiver that just sort of sits out there for months and hear back only in the negative," he explained.

Slonaker said he hopes the news means SB96's backup plan will go into effect, aligning with what the majority of Utah voters wanted in Proposition 3.

Utah's "bridge" program to expand Medicaid to about 70,000 to 90,000 adult Utahns got federal approval in late March, and eligible adults began applying April 1.

The federal government will cover about 70% of the cost of the new program while the state of Utah will cover the remaining 30%. Under Affordable Care Act rules for full Medicaid expansion, the federal government would pay 90% of the costs.

In a statement to the Deseret News, the Centers for Medicare and Medicaid Services attempted to explain the reasoning behind the administration's decision to deny the state's request for a 90% funding match.

"CMS has long supported state flexibility to design innovative Medicaid demonstrations that improve outcomes and promote fiscal sustainability. However, a number of states have asked CMS for permission to cover only a portion of the adult expansion group and still access the enhanced federal funding available through Obamacare.

"Unfortunately, this would invite continued reliance on a broken and unsustainable Obamacare system. While we have carefully considered these requests, CMS will continue to only approve demonstrations that comply with the current policy," according to the statement.

The Centers for Medicare and Medicaid Services had approved a waiver for Utah's limited expansion program in March. A second waiver was needed to obtain full federal matching dollars for the limited plan.

Utah lawmakers extended Medicaid coverage for Utahns earning only up to 100 percent of the about $12,000 federal poverty rate — not up to 138 percent covered under the full expansion in Proposition 3 that would have covered an estimated 150,000 Utahns.

Leading up to lawmakers' passage of the plan, critics had questioned whether the federal government would approve the waivers needed for Utah's plan, while lawmakers said they had been given indications that the waivers would be approved.

The issue might become irrelevant if the Affordable Care Act is overturned by the U.S. Court of Appeals for the 5th Circuit in coming weeks. The court heard arguments earlier this month on whether the act is constitutional after penalties for not having health insurance were eliminated.

"I've been burned too many times on hoping for these various things to happen. I wait for them to actually happen and then follow through, and we will live with it no matter what final verdict comes down. We'll live with it and we'll make it right," Christensen said.

Contributing: Dan Bammes