- CMS will no longer approve full funding for a partial Medicaid expansion by states, dashing the hopes of a handful of Republican states looking to receive more federal money for covering fewer people than states fully expanding the program under the Affordable Care Act. The agency announced the change over the weekend in turning down a bid from Utah.
- "We are deeply disappointed by this latest development," Utah's Republican governor, Senate president and House speaker said in a joint statement Saturday. Utah received CMS approval for an expansion in April that only grew coverage to 100% of the federal poverty level, instead of to 138% of the federal poverty level as required under the ACA for the government to take on a larger share of the costs.
- A fallback provision in the state legislation is likely to kick off a full Medicaid expansion in the state, similar to the one approved by voters in November.
The policy shift puts the Obama and Trump administrations on the same side — though for very different reasons. President Barack Obama's healthcare regulators rejected partial expansion on the grounds that it goes against the tenets of the ACA, while Trump's are now rejecting it because it relies on the law itself.
"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," a CMS spokesperson said. "Unfortunately, this would invite continued reliance on a broken and unsustainable Obamacare system."
The Trump administration has refused to defend the law against the suit brought by a slate of Republican state attorneys general seeking to blow up the law. The case is awaiting a decision in the conservative-leaning Fifth Circuit Court of Appeals.
Though legal experts across the ideological spectrum decried the legal merits of the case, a panel of three judges seemed open to the plaintiff's reasoning, earlier this month peppering lawyers defending the ACA on behalf of House Democrats and Democrat-led states with questions on the constitutionality of the individual mandate.
After the U.S. Supreme Court's 2012 decision largely upholding ACA but nixing mandatory Medicaid expansion, states can choose whether to expand the program to 138% of the federal poverty level. The expansion significantly reduces the number of the uninsured and provides additional reimbursements for cash-strapped hospitals, especially those serving a more vulnerable population.
Currently, 37 states and Washington, D.C. have fully expanded Medicaid and, moving forward, "CMS will continue to only approve demonstrations that comply with the current policy," the spokesperson said.
In Utah, for example, the partial expansion would have covered between 70,000 and 90,000 people. A full expansion would cover between 110,000 and 130,000 people and cost the state $50 million less than its partial plan.
Despite this, a number of red states were looking into truncated expansions of the public health program, including Georgia and Idaho. Wisconsin covers adults up to the federal poverty line though it didn't adopt the ACA Medicaid expansion.
Utahns passed a ballot measure in November to expand Medicaid coverage under the ACA to 138% of the federal poverty level beginning in April of this year, increasing taxes to finance the expansion.
However, the legislation Gov. Gary Herbert signed in February was significantly different. Beyond winnowing the expansion down to adults only at 100% of the federal poverty level, it includes a work requirement for coverage eligibility, capped enrollment and a per capita ceiling on federal reimbursement.
The plan called for Utah to pay for 30% of the Medicaid expansion costs, rather than 10% in a regular expansion plan. However, Herbert planned to submit another Section 1115 waiver to CMS in the spring of 2020 asking the Trump administration to pay for 90% of the costs, despite the partial expansion of the public health program.
Republican legislatures and state governors have proved an effective roadblock to Medicaid expansion, often against the will of the voters. In Maine, for example, a ballot initiative passed in November 2017 approved the expansion, but then-Gov. Paul LePage delayed it for months. Current Gov. Janet Mills, a Democrat, implemented it her first day in office.