The Trump administration on Friday evening made clear to the Utah legislature and governor that it would not approve a waiver for a partial Medicaid expansion, before the state even submitted the waiver request.
Utah legislators were confident they would receive the waivers they needed from the federal government to implement Senate Bill 96, the limited Medicaid expansion plan that replaced voter-approved Proposition 3. The first waiver was a 70% federal to 30% state funding match for covering recipients up to 100% of the federal poverty line—individuals making less than $13,000 annually. Utah obtained that waiver approval in March, expanding coverage to an estimated 90,000 more people.
The next waiver would have been a 90-10 federal-to-state funding match for the same population. Under the Affordable Care Act, the federal government does cover 90% of Medicaid costs for the state—if the state fully expands Medicaid up to 138% of the poverty line, which, in Utah, would cover approximately 50,000 more people. To cut costs, the Utah Legislature proposed covering only up to 100% of the federal poverty line, while hoping to receive 90% federal funding. The Centers for Medicare and Medicaid Services released a statement saying partial expansion continues reliance on the ACA and the department will only approve plans that comply with current policy. Additionally, the Trump administration has endorsed a lawsuit challenging the constitutionality of the ACA, which Utah Attorney General Sean Reyes has also signed onto.
Utah Health Policy Project analyst Stacy Stanford says this is exactly what full expansion advocates had predicted during this year’s legislative session, after lawmakers moved to undo Proposition 3.
“We warned that the Trump administration had signed on to this Texas vs. U.S. legal challenge against the Affordable Care Act, which includes an effort to dismantle the entire Medicaid expansion," Stanford said. "We did bring up the fact that it wasn't very logical for the Trump administration to pursue this arrangement with the state, if their goal was to dismantle the entire thing.”
With the 90-10 waiver shot down, SB 96 shows the next step is the so-called “fallback plan,” which is full expansion up to 138% of the poverty line but with the addition of work requirements for Medicaid recipients. The fallback plan stems from House Bill 210, legislation that mirrored full Medicaid expansion under Prop. 3, though HB 210 had fiscal adjustments from Prop. 3 and no work requirements. The Trump administration has approved Utah’s waiver request for work requirements, but Stanford says similar policies from other states have already been struck down in court.
“They can go ahead and proceed with [work requirements], and that doesn't concern advocates as much because we already are confident in our abilities to overturn that through legal means," Stanford said. "So this is a real win to go forward with the fallback plan, as they've nicknamed it, which is real close to what was in Proposition 3.”
Stanford believes SB 96’s fallback plan answers all the legislature’s funding concerns. It includes the .15% sales tax increase from Proposition 3; it removes a cost-of-living increase consideration; and, Stanford says, not as many people are enrolling in Medicaid as expected, keeping costs down.
“Then there is no fiscal argument against full expansion—it's more than paid for," Stanford said. "It will pay for itself.”
SB 96 sponsor and state senator for a portion of Summit County Allen Christensen declined to comment. In a press release, Utah Gov. Gary Herbert, Senate President Stuart Adams and House Speaker Brad Wilson expressed their disappointment in the Trump administration’s denial of the waiver request but assured Utahns who obtained coverage this year through SB 96 that the program is funded at least until June 2020. The statement says the state will continue to work with the Trump administration to provide a fiscally sustainable Medicaid program.
