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Is Medicaid expansion inevitable in Utah?
Health care » Utah has taken entitlement medicine before, but it’s gagging on new dose.
First Published Mar 30 2014 01:01 am • Last Updated Mar 31 2014 09:39 pm

In pushing his "Healthy Utah" private-insurance alternative to expanding Medicaid, Gov. Gary Herbert must overcome Republican angst over "Obamacare" and ideological distaste for entitlement programs.

Political insiders put better odds on his brokering a funding deal with the feds than winning over members of his own party in Utah’s Republican-led Legislature.

At a glance

Herbert’s ‘Healthy Utah’ proposal

Participants in the “Healthy Utah” plan envisioned by Gov. Gary Herbert would have to contribute an average of $420 a year toward their health care.

Some would face a work requirement. Low-income parents whose children are on Medicaid could get financial help to move the whole family onto a private health plan.

“On private insurance they can probably get better quality of care and will have more insurance choices to fit their unique [health] needs,” Herbert said. “Nobody’s getting a free ride; they’ve got to put skin in the game. It’ll make for a better program with better outcomes and give us better bang for the buck.”

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But states have faced this decision twice before: once with the creation of Medicaid in 1965 and again, decades later, with the Children’s Health Insurance Program, or CHIP.

And while there was furor over both programs, the lure of federal cash proved too great for even the most obstinate of states.

‘Too far, too fast’ » Congress authorizes millions in federal funds to provide health care to the poor and a year later, only half the states have accepted the money.

The year is 1966 — not 2014, though the description applies to the current debate over the Affordable Care Act’s multibillion-dollar expansion of Medicaid.

Medicaid and its cousin, Medicare for the elderly, passed Congress as an amendment to the Social Security Act and were signed into law July 30, 1965, by President Lyndon Johnson.

Utah was one of the first 20 states to sign up. Cal Rampton, a Democrat, was governor.

"I remember that my father jumped on it pretty quickly because it was kind of the brainchild of his buddy Lyndon Johnson," recalls the late governor’s son, Vince Rampton, a lawyer in Salt Lake City.

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But just as Utah’s plan was approved in July 1966, alarms sounded nationally about Medicaid’s costs.

"Congress may decide to pull the brake on the federal financing of health care," The Associated Press reported in the July 9, 1966, edition of The Salt Lake Tribune. "... The House Ways and Means Committee has held two closed-door hearings to explore whether Congress unwittingly went too far too fast last year in inviting the states to dip into the treasury for medical aid funds."

A state prerogative » Unlike Medicare, Medicaid is run and partially funded by states.

The difference "had a lot to do with the politics of poverty," said Alan Weil, executive director of the National Academy for State Health Policy.

Conservative, mostly Southern, states blocked national aid programs they felt were too generous, believing they would eliminate Americans’ motivation to work, said Weil.

So offering Medicaid is voluntary and states have some discretion in setting eligibility rules, which are a near constant source of political wrangling.

States were enticed to adopt the program, however, by a promise that the federal government would pay 50 percent to 83 percent of the costs, depending on a state’s per capita income.

By 1970, a final group of eight, mostly Southern, states joined Medicaid’s early adopters. Arizona was the last, signing up in 1982.

Funding also quickly became a problem for states. One month into Utah’s program, on Aug. 13, 1966, The Tribune reported the state’s price tag was expected to more than double in 1967 to $12 million.

Then spending rose an annual average of 22 percent from 1973 to 1984 — a reflection of America’s spiraling health care costs. In 1984, the state’s share was $130 million, according to data from the Utah Hospital Association.

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