Utah's partial Medicaid expansion cleared by CMS, sidestepping voters
Utah became the latest state to expand Medicaid with CMS' approval Friday, but the curtailed plan goes against the will of the state's voters, who approved a full expansion in November. The approval includes work requirements and comes days after a federal judged knocked down similar work mandates in two states.
Instead of expanding Medicaid enrollment to people 138% of the federal poverty level, Utah will only grow the program to the poverty level. The plan also includes an enrollment cap. At the moment, it calls for Utah to pay for 30% of the Medicaid expansion costs rather than 10% in a regular expansion plan. Utah Gov. Gary Herbert said his state will soon ask the Trump administration to pay for 90% of the costs despite the state only partially expanding the public health program.
- The partial plan will cover between 70,000 and 90,000 people. The voter-backed plan would have covered another 40,000 people. According to a state analysis, it's expected to cost the state $50 million more than a full expansion, so in effect, Utah will have a smaller expansion program but pay more money.
This is the first time CMS has allowed a partial Medicaid expansion. Utah's green light may prompt other red states to seek partial expansions themselves.
More than a dozen, mostly Republican-leaning, states haven't expanded Medicaid. Utah's partial plan will likely interest states that don't want to grow Medicaid as much as the Affordable Care Act permits. States like Texas and Florida may be more interested in a smaller program, especially if they can get the same level of funding that's part of a full expansion.
However, one issue that might prevent states from seeking a partial Medicaid expansion is that the federal government won't pay 90% of Medicaid costs, which it does for full expansion. That means Utah will have to pick up more costs for Medicaid expansion than the three dozen states with full expansion.
In a statement, Herbert said the state will soon submit a proposal asking CMS to provide more funding for Medicaid expansion. Utah will make "assurances on its costs and provide the state with additional flexibility to manage the program," he said.
A piece that will interest non-expansion states is the spending cap, which forces the state to keep close tabs on costs. The plan will let the state cap Medicaid expansion enrollment if spending exceeds projections. That means potentially fewer people getting Medicaid if Utah spends more than expected. Those people would still be eligible for ACA exchange plans though. Their income would also let them sign up for an ACA plan and enjoy tax credits to help pay for coverage.
The expansion is expected to launch Monday with the work requirement starting in 2020. Utah residents with an income up to about $12,492 for an individual or $25,752 for a family of four will be eligible for Medicaid under the new plan.
Utah is also the latest state to implement work requirements for Medicaid, an aspect of the plan likely to face additional scrutiny. The courts have already turned aside the work requirements for Arkansas and Kentucky. Kentucky had its work requirement rejected twice by the courts.
In the most recent case, U.S. District Judge James Boasberg issued dual rulings against the requirements. Boasberg questioned whether Arkansas' work requirements "would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid." Another issue with the Arkansas plan is that it reportedly led to more than 18,000 people losing Medicaid coverage, according to the Kaiser Family Foundation.
CMS is still reviewing work requirement projects for other states, including Alabama, Mississippi, Oklahoma, South Dakota, Tennessee and Virginia.