But any celebration may have been too hasty.

The U.S. government has rejected Utah's Medicaid vision plan on a technicality, placing the benefits - eye exams and eye glasses - on hold indefinitely.

Coverage was supposed to kick in on July 1.

State Medicaid director Michael Hales is working with state lawmakers to broker a fix-it plan, but says federal approval could take months.

At the root of the problem is a managed-care proposal that legislators devised to save taxpayer money.

Health officials asked for a quarter-of-a-million dollars to fund vision benefits for the year.

Utah lawmakers allocated $174,000, figuring the balance could be made up by charging patients $10 co-payments.

Under federal rule, however, co-pays can't exceed $3.

The Deficit Reduction Act has allowed states flexibility to bend such rules, but only for Medicaid beneficiaries with incomes above the federal poverty level, said Hales.

"The populations we're looking to cover fall below the poverty level," he said. That's an annual income of $10,210 for a single person.

Hales says lawmakers have two options: fund vision without the co-pay until the money runs out or cobble together another managed-care plan and apply for a federal waiver.

The second option could take six to seven months, said Hales.

Karen Crompton, executive director of Voices for Utah Children, would like to see lawmakers fully fund the program. "This is something that could be fixed pretty quickly and pretty cheaply," she said.

But she isn't convinced health officials need legislative approval to move forward.

The directive on co-pays was inserted as intent language - not law - on the final Friday of the 2007 Legislative session.

Republican Rep. Dave Clark from Santa Clara is banking on leniency from the federal government. He feels a $10 co-pay isn't too much to ask, considering people can pay upwards of $36 in co-pays a year on one prescription drug.

kstewart@sltrib.com