Trump administration to reject full Medicaid expansion funding for Utah

(Leah Hogsten/Tribune file photo) Ellie Brownstein, left, who is in opposition to SB96 and Wiz Rouzard with Americans for Prosperity in favor of SB96 debate for and against in front of the Utah House chamber, Friday, Feb. 8, 2019, in Salt Lake City. Utah lawmakers' plan to scale back a voter-approved Medicaid expansion has passed a key vote despite protests from advocates who say it guts a plan the majority of voters want.

Washington • The Trump administration will not give Utah or other states generous federal funding to partially expand their Medicaid programs under the Affordable Care Act, funding that Utah hoped to receive after the administration earlier this year authorized the state to move forward on an expansion of the government health insurance program.

This decision should trigger a fallback provision in Utah’s scaled-back Medicaid proposal that will allow for full Medicaid expansion, similar to the structure voters approved during the November election, but which was overruled by the Beehive State’s Republican leaders.

Utah received approval from the Centers for Medicare and Medicaid Services, under the Health and Human Services Department, in March to move forward with a Legislature-approved Medicaid expansion to provide access to health insurance for up to 90,000 low-income adults. Under that agreement, the federal government would pay for 70% of the expanded program, with the state funding the remaining 30%. People have been able to apply for coverage since April 1.

Under the Affordable Care Act, the federal government may pay for more than 90% of the program, as it does in the more than 30 other states that have expanded Medicaid, and Utah hoped to receive such support. But Utah is different from other states that expanded health insurance because it decided to extend eligibility to a more limited number of residents than is permitted under the ACA.

Utah’s proposal to CMS expanded Medicaid to residents who earn up to 100% of the federal poverty level, which is $12,490 a year for an individual and $25,750 for a family of four. The state also included a requirement that most Medicaid beneficiaries work or else lose their benefits, requirements that Kentucky and Arkansas tried to implement but that were blocked by a federal judge.

The Trump administration does not plan to approve enhanced federal funding for any state that implements a partial Medicaid expansion, two senior administration officials said.

Stacy Stanford, a policy analyst with the Utah Health Policy Project, said Friday night that this means the waiver Utah lawmakers were asking for is “dead in the water” and that “they should immediately proceed with full expansion.”

The fallback plan would take effect January 2020, she said, allowing Utahns who earn up to 138% of the federal poverty line to qualify for Medicaid.

Stanford said the Trump administration’s decision isn’t surprising given the president’s desire to repeal the health care law — and she said it’s something which proponents of full expansion had already warned Utah lawmakers about.

She added that in retooling the voter-approved expansion plan with SB96, lawmakers confused many people who could qualify for Medicaid.

“So, if the Legislature had never caused this confusion, we could be saving lives right now,” Stanford said. “We could be helping people right now that are falling through the cracks.”

SB96’s sponsor Sen. Allen Christensen, R-North Ogden, declined to comment on the Trump administration’s decision until he receives official confirmation. The bill’s House sponsor, Rep. James Dunnigan, R-Taylorsville, didn’t immediately respond to The Salt Lake Tribune’s request for comment Friday night.

The Obama administration also did not grant such funding for states that did not expand the program fully as the law envisioned, in an effort to encourage states to expand health insurance to as many residents as possible.

The reasoning from the Trump administration is different, however.

The administration is siding with 18 Republican attorneys general arguing in federal court that the entirety of the Affordable Care Act — which extended health insurance to about 20 million Americans through individual marketplaces and expansion of Medicaid — is unconstitutional. A decision from the 5th Circuit Court of Appeals is expected in the coming weeks.

According to the senior officials, who spoke on the condition of anonymity to discuss internal deliberations, White House advisers argued that it did not make sense to approve generous federal funding under the ACA while the administration is arguing that the entire law should be overturned.

White House advisers on the Domestic Policy Council and Office of Management and Budget, which are controlled by conservative Republicans, were the staunchest opponents of allowing Utah to receive enhanced federal funding for its expanded Medicaid program.

CMS Administrator Seema Verma presented Utah's argument for receiving the enhanced funding in a meeting with several White House and health agency officials, but the decision to deny such requests was ultimately unanimous, a senior administration official said.

Utah said it still plans to submit a funding request to CMS. "We're still preparing to submit our waiver as directed by state legislation passed this year," said Tom Hudachko, spokesman for the Utah Department of Health. "We have not received any indication, one way or the other, how CMS may act on the waiver once we do submit it."

The White House referred to CMS for comment. CMS declined to comment on the decision.

Under Obamacare, the federal government funded the entirety of the Medicaid expansion for two years before gradually shifting more of the costs back to the states. More than 30 states expanded Medicaid under the 2010 law, and a handful of states have voted to implement an expansion since Trump took office in 2017.

“We are now unified — this administration is charting a conservative course forward and the president gave us a clear directive,” said a senior administration official.

Republicans repeatedly failed to repeal and replace Obamacare — which was a top Republican campaign promise for eight years — in 2017 despite controlling the White House and both chambers of Congress. Republicans lost control of the House in 2018, in large part because of the unpopularity of their repeal-and-replace efforts and Democrats’ promises to protect and strengthen Obamacare.