Utah waiver denial dooms states’ hopes for partial Medicaid expansion

The Trump administration’s rejection Friday of Utah’s request for full Affordable Care Act funding for a partial Medicaid expansion likely ends the hopes of leaders in a number of states for a smaller and cheaper coverage program for low-income adults.

Idaho and Georgia are two other states that currently are considering partial expansions. There are an estimated 2.5 million uninsured adults in non-expansion states who could qualify for Medicaid nationally through partial expansions, according to the Kaiser Family Foundation.

Utah’s Republican leaders had asked the CMS to provide enhanced 90% funding for the cost of extending Medicaid to adults with incomes up to 100% of the federal poverty level, rather than up to 138% of poverty as authorized by the ACA.

Other states with similar waiver proposals, including Arkansas, Massachusetts and Wisconsin, previously were turned down by the Trump and Obama administrations.

In turning down Utah’s request, the CMS said it “will continue to only approve demonstrations that comply with the current policy” of paying the enhanced federal matching rate for Medicaid expansions up to 138% of poverty.

The CMS said granting Utah’s request “would invite continued reliance on a broken and unsustainable Obamacare system.”

Utah now may turn to its statutory backup plan, which would establish a standard ACA Medicaid expansion for adults with incomes up to 138% of poverty, though Utah’s Republican leaders did not explicitly commit to that in the wake of the CMS decision.

Utah Republicans passed the partial expansion bill in March, overriding a ballot initiative approved by state voters in November mandating a full ACA expansion for people up to 138% of poverty.

Gov. Gary Herbert and Republican legislative leaders said they “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 CMS rejection of enhanced funding for a partial expansion may prompt Utah to drop its accompanying request to shift to a system of per capita caps on federal Medicaid payments, predicted Matt Slonaker, executive director of the Utah Health Policy Project, which supports full expansion.

Now the state would have nothing to gain from accepting capped federal funding, he said.

Herbert’s office did not respond to a request for comment.

Republican leaders in Idaho and Georgia also recently pushed through legislation to implement or consider partial Medicaid expansions and seek full ACA expansion funding. Now those proposals appear to be in peril.

The office of Georgia Gov. Brian Kemp, who pushed for the partial expansion bill, did not respond to a request for comment.

Bob Trammell, Georgia’s Democratic House leader, said in light of the Utah decision, Kemp and GOP lawmakers now should consider full expansion.

“Certainly this is something that should factor into the decision, because it’s asinine to cover a smaller population at greater cost than if you (fully) expanded Medicaid and covered more people at a lesser cost,” he said.

A spokeswoman for the Idaho Department of Health and Welfare said the state Department of Insurance recently submitted a Section 1332 waiver request that would give adults with incomes between 100% and 138% of poverty a choice between expanded Medicaid and ACA exchange plans. She said the CMS decision on the Utah partial expansion waiver would have no bearing on Idaho’s proposal, which was mandated by Idaho Republican lawmakers, who also overrode a 2018 ballot initiative requiring a full Medicaid expansion.

But Joan Alker, executive director of Georgetown University’s Center for Children and Families, said states that are considering Medicaid expansion — including Idaho, Georgia, Kansas, North Carolina and Oklahoma — have no alternative to a full ACA expansion.

North Carolina’s Democratic governor, Roy Cooper, and GOP-led Legislature currently are locked in a bitter budget showdown over Cooper’s demand that Medicaid expansion be included in the budget package. In Oklahoma, a statewide coalition has launched a campaign to put the Medicaid expansion issue before voters in November 2020.

“The bottom-line question for legislators and governors is, ‘Do you want to expand or not?’ ” she said. “The drivers will be pressure from rural communities and hospitals because of the untenable reality of the coverage gap for the poorest people in the state.”

A study published last week by the National Bureau of Economic Research estimated that states’ refusal to expand Medicaid coverage led to 15,600 additional deaths among adults ages 55-64 over a 16-month period. Previous studies have found that Medicaid expansion improved access to surgery and kidney dialysis and enhanced beneficiaries’ financial well-being.

“There is probably no domestic policy program in the last two decades that has achieved more undisputed favorable results medically and financially for people than Medicaid expansion,” said Andy Slavitt, who headed the CMS in the Obama administration.

While Slavitt has mixed feelings about proposals to expand Medicaid partially rather than fully, he blasted the Trump administration’s decision to reject Utah’s request on the grounds that it conflicts with the administration’s goal of legally overturning the ACA.

“They love to support states unless it gets in the way of them accomplishing what they want, which is knocking healthcare into chaos,” he said.