Gov. Gary Herbert said Thursday he won’t include Medicaid expansion in his budget proposal next month, saying the program would likely be "a wash" financially for the state.
The Family Investment Coalition, a group of low-income advocates pressing for Medicaid expansion, asked the governor to prepare two budgets, one with the expansion and one without, so the public can see the dollars-and-cents impact of the change.
The group said that Health Department numbers show the expansion would increase revenue by $11 million in the coming budget year and would cover 123,000 uninsured Utahns.
But Herbert said the revenue projections he’s basing his budget upon — which were agreed upon with the Legislature — don’t include Medicaid expansion. It’s an issue he said will be considered separately.
"We’re certainly considering that as an option," Herbert said during his monthly KUED news conference. "We’ll look at the way to do Medicaid and Medicaid expansion in a way that is in the best interest of the taxpayers, both in the short term and the long term. We are analyzing the ramifications of doing full expansion or not doing any expansion."
Herbert said that, while there are projections that expanding Medicaid would infuse some money into the economy, the Affordable Care Act also probably takes money out of the economy through taxes and businesses that aren’t hiring because of uncertainty in how the law is being implemented.
"It’s probably a wash on balance, as far as the economy overall," Herbert said.
‘Pretty good deal’ • Karen Crompton, executive director of the group Voices for Utah Children, which is part of the Family Investment Coalition, said the expansion makes sense.
"If it’s a financial wash and we can cover 123,000 uninsured Utahns, that seems like a pretty good deal," said Crompton, who served on a working group the governor formed to study expansion. "Beginning in January, Utah will lose $4.8 million a month and still have 123,000 uninsured residents because we have not moved forward with the Medicaid expansion."
The Affordable Care Act, commonly known as Obamacare, allows states to draw on federal money to provide Medicaid coverage to individuals making up to 138 percent of the poverty line — about $32,400 for a family of four.
The federal payments would be stepped down until it is paying 90 percent of the cost in 2020.
House Speaker Becky Lockhart, R-Provo, said the Legislature will work with the governor, but said lawmakers are approaching the issue with caution.
"We’re not sure that the federal government will continue [to pay] the 90 percent, which will cost us even more" if we do the expansion, Lockhart said in an interview. "We have people who need legitimate help but we have a state Legislature… responsible for the taxes [residents] pay to the state, and we don’t have a lot of faith in the federal government."
Crompton said if state lawmakers are worried about the federal government not following through on its commitment, they could easily include an "escape clause" in the legislation to get out of the arrangement.
Options • Herbert said he is also considering "hybrid" options, where the state could take some of the money and take other steps to cover those Utahns above the poverty line who don’t make enough to qualify for subsidized health premiums.
Herbert said charity care may be part of the solution for covering those in that gap — although it is not the entire solution. The state could also draw on federal dollars or put in state money to provide subsidies so low-income Utahns could afford to buy insurance.
Philosophically, Herbert said, he doesn’t see health care as a right, but there is a role for government — as well as the private sector — to help care for those who find themselves in hard times.
"We recognize there are people that struggle and are in need of a helping hand, but that doesn’t mean government is the only source for that helping hand," the governor said. "That’s a mistake we make and think government will take care of us from cradle to grave. It’s very inefficient at doing that and it becomes very expensive to those out there producing the wealth and creating the economic expansion."
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