Senate plan to replace Medicaid expansion puts would-be beneficiaries back on the individual insurance marketplace

(Francisco Kjolseth | The Salt Lake Tribune) A group faces the House chambers at the Utah Capitol on Monday, Jan, 28, 2019, on the first day of the Legislative session to rally in support of protecting Proposition 3, the Medicaid Expansion law recently passed by voters.

Senate Republicans took the first step Tuesday toward replacing Utah’s voter-approved Medicaid expansion program with a more restrictive and nationally unproven plan.

The Senate’s Health and Human Services committee voted 6-2 along party lines to recommend SB96 after the bill’s initial language repealing Proposition 3 was swapped out for a version endorsed by Republican legislative leaders.

“The bottom line is we are expanding Medicaid,” said Sen. Allen Christensen, R-North Ogden, the bill’s sponsor. “We’re covering the gap completely. We are doing as Prop 3 voters wanted in a fiscally, financially responsible way.”

The committee vote followed 90 minutes of debate, which largely centered on the estimated costs of expanding health care coverage to low-income Utahns and the outcome of the November election, in which 53 percent of voters statewide approved allowing individuals earning up to 138 percent of the federal poverty line to enroll in Medicaid.

“We voted for full expansion — April 1st, no strings attached, no waivers,” said Stacy Stanford, an analyst with the Utah Health Policy Project. “The voters got it right and Proposition 3 is a superior law.”

Christensen said his bill would maintain the initiative’s April 1 deadline for expansion to take effect, as well as the 0.15 percent sales tax increase approved by voters as part of Proposition 3. But his expansion plan would include only those earning up to 100 percent of the poverty level, with the remaining expansion population expected to be served through subsidized health insurance on the Affordable Care Act individual marketplace.

Christensen, chairman of the Senate Social Services Appropriations Committee, also stated that he is philosophically opposed to Medicaid expansion, and was only interested in a partial plan because a majority of voters — including those in his own district — had endorsed Prop 3.

“If we had not passed Proposition 3,” he said. “I would still be standing as an advocate to not [expand].”

The replacement proposal is functionally similar to the partial Medicaid expansion plan approved by lawmakers last year, which was superseded by the public vote on Proposition 3. In addition to a more narrow pool of eligibility compared to full expansion, Christensen’s bill would impose work requirements on beneficiaries, and would establish an enrollment cap to protect the state against runaway health-care costs.

Like last year’s partial expansion plan, Christensen’s bill would require federal waivers from the requirements of the Affordable Care Act, or Obamacare, which Utah and other states have previously failed to receive but which Christensen was confident in securing. His proposal seeks an immediate “bridge” waiver to establish a 70-30 cost sharing agreement with the federal government, after which an additional waiver would be requested for the federal government to cover 90 percent of costs.

Prop 3, if allowed to take effect, would not require a federal waiver, as the Affordable Care Act offers a 90-10 cost sharing structure to full-expansion states. The initiative also includes individuals earning up to 138 percent of the poverty level, who under the proposed replacement bill would have to pay out of pocket for subsidized health insurance premiums.

“There’s a risk involved,” Christensen said of the waiver-approval process. But, he added, “They’ve told us we can basically count on an April 1 waiver approval.”

Prior to Tuesday’s hearing, the Senate’s GOP leadership team offered their tentative support for the proposal, which had not yet been made public. Sen. Dan Hemmert, R-Orem, said that voters had shown their support for a tax increase to expand health care coverage to more low-income Utahns.

“We’ll go as high as we can with the money we have,” Hemmert said.

Legislative leaders say the sales tax built into Prop 3 falls short of the expense of fully expanding Medicaid, which could present challenges to the state’s budgets over time. Those concerns come at a time when Utah Gov. Gary Herbert and House Speaker Brad Wilson, R-Kaysville, are seeking a tax cut of $200 million or more in response to a roughly $1 billion surplus in estimated revenue for the state.

“We don’t have the ability to print money,” said Senate President Stuart Adams, R-Layton. “We have to find a way to make our budget work.”

Tuesday’s committee hearing came one day after roughly 300 supporters of Proposition 3 rallied in the Capitol Rotunda in opposition to repeal efforts and in support of allowing the voter-backed initiative to take effect.

David Heslington, a former bishop of The Church of Jesus Christ of Latter-day Saints, spoke at both the rally and Tuesday’s hearing. He questioned why the committee was looking at reversing a public vote and reducing care to the poor at a time when legislative leaders are calling for tax cuts and a new parking facility at the Capitol complex.

“We’re gambling again," he said. “You’re the hope of the poor and those who suffer in silence.”

But Heather Williamson, state chapter director of Americans for Prosperity, said full expansion has been “catastrophic” in other states, pulling resources away from the most needy to serve a larger population of beneficiaries.

“Expansion has come at the direct expense of Medicaid’s most vulnerable patients," she said.

SB96 will now move to the Senate for a full vote of the chamber. The Senate Health and Human Services Committee was scheduled to discuss a second Prop 3 repeal bill, SB97, sponsored by Lehi Republican Sen. Jacob Anderegg, but voted to adjourn without hearing Anderegg’s presentation.