Utah and the ACA’s Medicaid expansion

Utah implemented limited Medicaid expansion as of April 2019, but with regular federal funding match; CMS has rejected enhanced federal funding with a limited expansion

utah Medicaid guide

Medicaid expansion in Utah

Voters approved Utah’s ballot initiative to expand Medicaid, but Republican lawmakers scaled it back

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By 2018, Utah was in its fifth year of rejecting federal funding to expand Medicaid under the Affordable Care Act’s guidelines. But during the 2018 legislative session, Utah enacted H.B.472, which directed the state to submit an 1115 waiver proposal to CMS by January 1, 2019, requesting approval for Medicaid expansion in Utah, but only for people earning up to 95 percent of the federal poverty level (really 100 percent, after the 5 percent income disregard).

For perspective, the ACA calls for Medicaid expansion to adults with income up to 138 percent of the poverty level. Here’s the difference that distinction makes:

  • In 2019, the poverty level is $12,490 for a single person, and $25,750 for a family of four.
  • 138 percent of the poverty level is $17,236 for an individual and $35,535 for a family of four.

The state submitted a waiver amendment in June 2018, seeking approval for modified Medicaid expansion under the terms of HB472. In addition to the expansion of Medicaid to individuals with income up to the poverty level, Utah was also asking the federal government to pay 90 percent of the cost (under the ACA, this is only available if a state expands Medicaid to individuals earning up to 138 percent of the poverty level), and allow the state to impose a work requirement on some Medicaid enrollees.

While lawmakers in Utah were considering a scaled-back version of Medicaid expansion, consumer advocates were working to gather enough signatures to get a Medicaid expansion initiative on the 2018 ballot in Utah. They were successful, and the Utah Medicaid Expansion Initiative passed with more than 53 percent support in the 2018 election. The Medicaid expansion ballot initiative, which called for Medicaid to be expanded to households with income up to 138 percent of the poverty level — with no strings attached — garnered support from numerous groups in the state, including AARP Utah, and the Utah chapter of the American Academy of Pediatrics.

The text of the ballot initiative called for Medicaid expansion to take effect as of April 1, 2019, and for Utah to raise the state sales tax by 0.15 percent (from 4.7 percent to 4.85 percent) in order to fund the state’s portion of the cost of Medicaid expansion.

Utah Governor, Gary Herbert, said that he would not block Medicaid expansion if the ballot measure passed — which it did — despite his opposition to the ballot initiative (this was in contrast with Maine’s former Governor LePage, who blocked Maine’s voter-approved Medicaid expansion ballot initiative for more than a year; it was eventually implemented when a new governor took over in 2019).

Utah’s limited Medicaid expansion costs the state more and covers fewer people than full expansion

But just weeks after the 2018 election, GOP lawmakers in Utah intervened to stop the implementation of the Medicaid expansion that voters had approved, opting instead for a version of Medicaid expansion that covers fewer people and costs the state more, at least in the first few years. S.B.96 was enacted in the 2019 legislative session, reiterating H.B.472’s call for Medicaid expansion only to those with income up to the poverty level.

S.B.96 was enacted in February 2019. The state’s Medicaid expansion ballot initiative had called for expansion to take effect by April 2019, which meant there was very little time to secure federal approval for the modifications the GOP lawmakers wanted to make to Utah’s version of Medicaid expansion. But since the state already had a pending waiver proposal at CMS with very similar terms to those called for in S.B.96, CMS was able to grant a modified approval of that earlier proposal — albeit at the state’s regular federal funding match rate of about 68 percent, instead of the 90 percent federal funding rate that applies in states that have fully expanded Medicaid. The approval came in late March, just in time for the state to implement its limited Medicaid expansion on April 1, 2019. Utah residents with income up to the poverty level were able to begin applying for expanded Medicaid as of April 1 (when an application is approved, coverage is backdated to the first of the month in which the application was submitted, so April 1 effective dates were available).

As of late May, more than 31,000 people had enrolled in the state’s expanded Medicaid program. Utah automatically transitioned about 17,500 Primary Care Network enrollees (this program is described below in more detail) to the new Medicaid expansion program, but the rest of the new enrollees have applied for coverage since the expansion coverage became available.

In addition to partial Medicaid expansion, Utah’s approved waiver also allows the state to impose a Medicaid work requirement starting in 2020, and allows the state to stop enrolling eligible residents in the expanded Medicaid program if “projected costs for the Adult Expansion Population exceed annual state appropriations.” If that happens, people will still be able to apply for Medicaid and the state will process their applications to determine if they could obtain coverage under any of the other Medicaid eligibility categories. But if enrollment were to close due to budgetary issues, the state would not have to maintain a waitlist or notify applicants if and when enrollment opened again at a later date.

Despite partial expansion, Utah wanted enhanced federal funding that applies to states with full expansion. But CMS has said no.

The Utah Department of Health published an implementation guide for the current limited Medicaid expansion and the state’s future plans. It notes that an estimated 70,000 to 90,000 people will be covered under the newly-approved version of Medicaid expansion (about 31,000 were enrolled in the first two months). And Utah’s limited Medicaid expansion does eliminate the coverage gap in the state.

But about 40,000 more people would have been eligible for Medicaid if the state had implemented the Medicaid expansion ballot initiative. Instead, these individuals (with income from 101 to 138 percent of the poverty level) currently continue to be eligible for substantial premium subsidies and cost-sharing subsidies in the exchange (their total out-of-pocket costs, including premiums and cost-sharing, would have been lower with Medicaid).

Utah’s 2018 waiver proposal — based on H.B.472 and mostly approved by CMS in March 2019 — requested enhanced federal funding for the state’s limited Medicaid expansion proposal (ie, the 90/10 split that otherwise applies only in states that have fully expanded Medicaid). Although CMS granted temporary approval (through January 2021) for Utah to expand Medicaid to adults earning up to the poverty level and impose a work requirement as of 2020, CMS clarified that the state would only receive its current federal funding match, which is about 68 percent — as opposed to the 93 percent match they would have received in 2019, and the 90 percent match they would have received in 2020 and beyond, if they had just expanded Medicaid as called for in the ACA and the voter-approved ballot initiative.

Because 32 percent of the cost of covering up to 90,000 people ends up being a larger amount than 10 percent of the cost of covering up to 130,000 people, Utah’s approach actually means that the state is spending more of its own money to cover fewer of its residents.

But Utah continued to work towards their goal of being the first state to gain federal approval for the enhanced Medicaid expansion funding despite a limited approach to expansion. They’ve described the Medicaid expansion that took effect in April 2019, funded at their existing federal matching rate, to be a “bridge plan” until they could gain federal approval for their next 1115 waiver.

In late May, Utah published a draft of their next proposed 1115 waiver (referred to as the “per capita cap” waiver proposal), opening up a public comment period that ran through June 30. However, in late July, before Utah had officially submitted the 1115 waiver, they received word from the Trump administration that their request for full Medicaid expansion funding was not going to be approved if they only partially expanded Medicaid. CMS explained that the state’s proposal to receive full Medicaid expansion funding while having people with income between 100 and 138 percent of the poverty level enroll in subsidized private plans in the exchange “would invite continued reliance on a broken and unsustainable Obamacare system.”

The specifics of Utah’s proposal that CMS has rejected

The draft per capita cap waiver proposal asks the federal government to switch to the enhanced funding model while still maintaining the income cap for Medicaid expansion eligibility at 100 percent of the poverty level and keeping the already-approved work requirement. But in order to make the arrangement more palatable for the federal government, Utah was proposing a per capita funding cap for the enhanced federal funding. As outlined in the draft 1115 waiver, the state planned to work with CMS to develop a per-enrollee base amount that will be adjusted annually and would vary for each of the state’s enrollment groups to account for differing costs across distinct populations. The state would be able to use leftover funding (ie, if expenses fall below the per capita cap) to offset excess spending in a future year, but if total costs exceed the per capita cap, the state’s funding for that portion of the costs would be covered at the normal Medicaid federal matching rate (ie, for Utah, that’s about 68 percent) The state was also proposing several other changes to the current waiver, including:

  • Up to 12 months of continuous eligibility.
  • A six-month period of ineligibility if a person commits an “intentional program violations.” The waiver proposal outlines what counts as a violation, but it’s essentially fraud with the intent to receive benefits or coverage that the person would not otherwise be eligible to receive.
  • Elimination of presumptive eligibility determined by a hospital.

When CMS informed Utah officials that their request for enhanced Medicaid expansion funding was not going to be approved, Gov. Herbert, Senate President Stuart Adams, and House Speaker Brad Wilson expressed their disappointment in a statement, and noted that they would continue to work on a solution for Medicaid expansion.

But Utah had already outlined contingency plans earlier in 2019. According to that plan, if CMS did not approve Utah’s per capita cap waiver proposal by January 1, 2020 (which now appears to be the case, as the crux of the waiver proposal has been rejected by CMS even before it was officially submitted for review), the state will submit its fallback plan waiver proposal to CMS by March 15, 2020.

The fallback plan calls for expanding Medicaid to 138 percent of the poverty level (ie, what voters approved in the 2018 election), but with a work requirement as well as the lock-out period for “intentional program violations.” It’s likely that this waiver would gain federal approval, as it’s not unlike waivers that have been approved in other states. But a federal judge has already blocked some states’ work requirements and although the Trump Administration has appealed, it’s possible that work requirements could be a non-starter by 2020. In that case, Utah’s final plan, if no waiver approval is granted by July 1, 2020, is to simply implement Medicaid expansion as called for in the ACA (and in the state’s ballot initiative), without a waiver.

The state has created an at-a-glance chart that compares the details of the bridge plan, the per capita cap plan, the fallback plan and the regular expansion plan.

Other states’ efforts to expand Medicaid only to those earning up to the poverty level

Wisconsin opted to offer Medicaid to people with income up to the poverty level but not to the population with income from 101 to 138 percent of the poverty level. As a result, Wisconsin has been missing out on the enhanced federal funding for Medicaid expansion. Arkansas tried to gain federal approval to reduce their Medicaid expansion income cap to 100 percent of the poverty level — while still retaining the enhanced federal funding — but CMS denied that request in 2018.

It’s worth noting that it’s cheaper for the federal government to cover the population between 100 and 138 percent of the poverty level under Medicaid, than to pay for premium subsidies. But it’s cheaper for the state to have that population covered by private plans in the exchange, with federal subsidies, since the state pays nothing at all for that option. If that population is covered under Medicaid, the state would be responsible for 10 percent of the cost. Clearly, it’s advantageous for the state to have that group on subsidized exchange plans, while it’s advantageous for the federal government to have them on Medicaid. From the enrollees’ perspective, Medicaid (including potential premiums and out-of-pocket costs) is significantly less expensive than subsidized plans in the exchange.

Very limited expansion was approved in 2017; enrollees have been transitioned to expanded Medicaid in 2019

In March 2016, Utah Governor Gary Herbert signed HB437 into law, providing for a limited version of Medicaid expansion. Utah’s version was much less comprehensive than the Medicaid expansion called for in the Affordable Care Act (ACA). Utah House Majority Leader Jim Dunnigan noted that the legislation “targets those in extreme poverty.”

Instead of expanding coverage to roughly 130,000 people (as would have been the case if the state had accepted federal funding for the ACA’s version of Medicaid expansion), HB437 was expected to provide coverage to about 9,000 – 11,000 of Utah’s poorest residents (by 2019, however, nearly 17,500 people were enrolled). The limited expansion provided Medicaid for 12 months to people who are homeless, mentally ill, in need of treatment for substance abuse, or recently released from incarceration.

Utah’s limited expansion of Medicaid was slated to cost the state about $30 million a year ($13.6 million of that from hospitals in the state), and the federal government about $70 million a year. Democratic lawmakers — who felt that HB437 was “less than crumbs” — noted that full expansion of Medicaid would have cost the state $44 million a year (some estimates say $50 million), but would have brought in $420 million a year in federal funds, garnering far more value from those state dollars.

Utah submitted a Section 1115 waiver proposal (the Primary Care Network demonstration) to CMS in July 2016, but CMS quickly responded, asking for additional information and an additional public comment period. The state had planned to implement the limited Medicaid expansion proposal in January 2017, but CMS approval didn’t come until October 31, 2017.

Under the terms of the approved waiver, the state was able to begin enrolling people as of November 2017. Utah residents could qualify for up to 12 months of coverage under the Medicaid waiver if they had income of no more than 5 percent of the federal poverty level (that amounted to no more than $603 in 2018), and were either chronically homeless or involved in the criminal justice program, and/or in need of substance abuse treatment.

In 2019, Utah transitioned Primary Care Network enrollees to the Medicaid expansion program.

What was Utah Access Plus?

Utah Access Plus was a compromise proposal reached by Utah’s “gang of six” in 2015, after lawmakers rejected Governor Herbert’s Healthy Utah Medicaid expansion proposal during the 2015 legislative session.  If it had won legislative support, Utah Access Plus would have used Medicaid funds to purchase private coverage for eligible residents. Because it was an alternative method of expanding Medicaid, it would have also needed HHS approval in order to obtain federal funding.

The “gang of six” included Governor Gary Herbert, Lt. Governor Spencer Cox, Senate President Wayne Niederhauser, House Speaker Greg Hughes, House Majority Leader Jim Dunnigan and Senator Brian Shiozawa. They worked together during the summer of 2015 to flesh out the details of a plan to replace two previous proposals (Gov. Herbert’s Healthy Utah plan and the House of Representatives’ Utah Cares plan). The gang of six announced in July 2015 that they had come to an agreement on a path to Medicaid expansion, but GOP lawmakers rejected their proposal, putting the state back to square one.

Prior rejection

Governor Herbert has been working for years to expand Medicaid. The House’s failure to support Utah Access Plus was the second time he had offered a proposal to lawmakers only to see it rejected. In October 2014, Herbert announced that he had come to a tentative agreement with HHS on his Healthy Utah plan that would have offered a modified, somewhat unique approach to expansion.

Governor Herbert unveiled the details of the HHS-approved Healthy Utah program at a meeting with legislators in December 2014. The proposal would have covered 126,000 Utah residents, but the legislation to implement it, SB 164, failed in committee in March 2015.  Lawmakers in the House Business and Labor Committee instead voted to recommend the Utah Cares proposal (HB 446) for further consideration. Utah Cares would have cost the state more, garnered less in federal funding, and covered fewer people with much more limited benefits. It had also not received tentative approval from HHS the way Herbert’s Healthy Utah plan had. Ultimately, neither bill advanced in the legislature during the 2015 session.

Who is currently eligible for Medicaid in Utah?

Utah was among the states that initially implemented Medicaid in the first year it was available; their program became effective in July 1966. Coverage is available under the following eligibility rules:

  • Pregnant women with household income up to 139 percent of poverty.  The mother receives full Medicaid coverage throughout the pregnancy and for 60 days postpartum.
  • Children with household incomes up to 139 percent of poverty (CHIP is available to children with household incomes up to 200 percent of poverty).
  • Women with household incomes up to 250 percent of poverty are eligible for certain cancer screenings through the Utah Cancer Control Program (UCCP).  If they are found to have breast or cervical cancer during the screening, they are eligible for full Medicaid coverage.  If they have a precancerous condition (breast or cervical), they are eligible for three months of Medicaid.
  • Adults (with or without dependent children) can get Medicaid coverage if their household income is under 100 percent of poverty. This is Utah’s version of Medicaid expansion, and it became available as of April 2019.
  • Utah provides Medicaid for various other select populations – check their list to see if you might be in any of the eligible groups.

How do I enroll?

  • You can enroll online at HealthCare.gov or through the state Medicaid office
  • You can enroll by phone at 1-800-318-2596 (HealthCare.gov phone application)
  • You can print a paper application (available in English and Spanish) and submit it by mail or fax (addresses and fax number here).
  • You can apply in-person at your local Department of Workforce Services office (click here to see a map and find your local office).

Enrollment dropped from 2016 to 2019, but is increasing again under expansion

From 2013 to July 2016, total enrollment in Utah’s Medicaid/CHIP program increased by 4 percent (12,828 people), but by March 2019, enrollment was about 3 percent lower than it had been in 2013. This was despite an increased eligibility limit for low-income parents, and the limited expansion of Medicaid for homeless people with no income, which took effect in November 2017. But enrollment in Utah’s Medicaid program is growing rapidly now that coverage has been expanded to adults with income under the poverty level.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

How to apply in UT

You can enroll online through HealthCare.gov or the state’s Medicaid website; by phone at 800-318-2596; or by mail, fax, or in person at a local office.

Eligibility: Coverage is available for low-income aged, blind, and disabled residents. It's also available for pregnant women with incomes up to 139% of poverty, children with incomes up to 200% of poverty, and adults with incomes up to 100% of poverty. Utah’s guidelines also provide for other groups to obtain coverage depending on circumstances.

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