Medicaid Expansion: Utah Gambles with Vulnerable Citizens
“Bring me a sword,” said King Solomon as two mothers argued over a baby, declaring he would cut the baby in half and give each a share. The real mother, of course, quickly relinquished her claim, caring most about the welfare of the baby. In its quest to undo the voters’ decision regarding Prop 3 (Medicaid expansion), the Utah Legislature gambles that it has less concern for Utahns than does the federal government. That is an extraordinary position for a state legislature to take. The feds should take the threat seriously. Their actions on Prop 2 and Prop 3 indicate that current legislators have little regard for the People they supposedly represent.
The working premise behind SB 96 (Medicaid expansion) is that the federal government will see and believe that the Utah Legislature is willing to harm 150,000 financially-struggling Utahns. Then, the federal government will break laws to rescue those individuals. Let me walk you through the trap the Legislature attempts to set for the feds and bait with Utah citizens.
Utah citizens passed Prop 3, fully expanding Medicaid to all eligible Utahns under the Affordable Care Act (i.e., an additional 150,000 people). Full expansion means the federal government will pay 90% of Medicaid costs and the State of Utah will pick up just 10%. That’s a good deal. New cost to the State: $10-million/year. That’s not chicken feed, but . . . get this next part.
Under SB 96, which passed the Senate Monday, the Utah Legislature would reject that deal and, instead, spend $50-70-million to cover 50,000 fewer Utahns. That, of course, is a much worse deal. The price jumps up, because anything less than full expansion means the federal government will only cover 70% of Medicaid costs, leaving the State of Utah to pick up the other 30%.
Why would the Legislature want to strike such a crappy deal? First, I will give you the honest answer. Then, I will unravel for you the Legislature’s dishonest answer.
The Legislature proposes to strike this crappy deal, in order to repeal Prop 3 using sleight of hand. In a competing bill, Senator Jake Anderegg is upfront and honest about his anti-democratic desire to repeal the expansion immediately. By contrast, the “bridge” that SB 96 proposes to create would allow the Legislature to look like it cares while slowly repealing the expansion and—importantly—setting up the “damn federal government” for breaking another promise. (Yes, if you’re keeping score, that is exactly what the Legislature did previously with its paper-only Medicaid expansion—the one that prompted Prop 3 in the first place). The key to understanding the dishonesty of this approach is to understand the impossibility of obtaining the federal waiver contemplated by SB 96.
Rather than allow full Medicaid expansion as the voters decided, the Legislature argues that a better plan would be to (1) expand Medicaid to just a portion of eligible Utahns, (2) take the worse 70/30 federal reimbursement rates for 18 months, and (3) convince the federal government to grant a waiver that allows Utah to subsidize private insurance for the remainder of the eligible Utahns, and (4) presto chango, because all eligible Utahns would be covered, get the 90/10 reimbursement rate. On paper, the plan is pretty slick. But it is illegal.
Reality: the federal government can only grant Medicaid waivers under the ACA, if a State’s request is revenue neutral to the federal government. This plan, of course, is not revenue neutral to the federal government. So, the waiver won’t be granted. It can’t be granted.
To coerce the federal government to illegally grant that waiver—and here is where my Solomon analogy kicks in—SB 96 will revoke ALL expanded benefits the bill includes, if the federal government does not grant that waiver. The Legislature sets the countdown clock to 18 months. As Senate Majority Whip Dan Hemmert describes SB 96’s auto-repeal provision, “That provision is what gives CMS the motivation to work with us in getting the waiver granted.” What exactly is that motivation? It is 150,000 Utahns who will be denied the Medicaid coverage that Prop 3 gave them.
If the feds don’t grant the waiver that it legally cannot grant, Utah families and individuals will be harmed. Remember this when—in 18 months—legislators are crowing about the damn federal government harming Utahns. The reality is that the Legislature is harming those 150,000 precious souls right now. SB 96 is merely a dishonest attempt to shift the blame.