The aim of Proposition 3 was noble: provide Utahns health insurance coverage when they do not qualify for a federal subsidy or cost-sharing reductions via the federal marketplace and when also rejected by Utah’s Medicaid program. Indeed, some of the experiences of Utahns who fall in this coverage gap are heart-wrenching.
However, Proposition 3’s expansion of Utah’s Medicaid program was a poorly done solution for three reasons.
First, Medicaid is a broken system. Proposition 3 expands Utah’s participation in this broken system without cost or enrollment circuit breakers. Unless the legislature amends Proposition 3, Utah will become more deeply entrenched in this broken system, with no real way out.
Second, Proposition 3 costs Utah more money than we can afford. Utah is spending an increasing amount on Medicaid. In 2000, the state share of Medicaid spending was $127 million, nearly 12 percent of the state budget. In 2016, the state share of Medicaid spending grew to $893 million, almost 19 percent of the state budget. Under Proposition 3, this ballooning Medicaid spending will only increase. Nearly every other state which has adopted Proposition 3-like Medicaid expansion has grossly underestimated enrollment and costs; actual enrollment and costs have been significant and, in some instances, debilitating.
Third, under Proposition 3 upwards of 41,000 Utahns will inherit inferior health care coverage. Currently 41,000 Utahns whose income falls between 100 percent to 138 percent of the poverty level have enrolled in very affordable health insurance in the commercial market via healthcare.gov. These plans offer rich benefits at a low cost, about $25 per person per month, because the plans are paid for by tax credits and subsidies that are fully funded by the federal government — to the tune of approximately $400 million each year. As Medicaid is expanded to the 138 percent federal poverty level through Proposition 3, Utahns earning between 100 percent and 138 percent of the poverty level will lose their plans and be forced to move to Medicaid, which offers mediocre coverage. And who picks up these costs previously paid with federal tax dollars? The state and its taxpayers.
Worse coverage. Higher costs. Broken system. It all adds up to a poorly done solution.
The good news is the Utah Legislature sees the problems with Proposition 3. The state of Utah is fortunate to have lawmakers who stand up for Utah’s best interest despite intense criticism. Senate Bill 96, Sponsored by Sen. Allen Christensen solves some of the problems by making sensible adjustments to Proposition 3. It protects 41,000 Utahns from losing extensive health care coverage. It caps costs, protecting state taxpayers from future debilitating Medicaid expansion costs.
What naysayers to Senate Bill 96 need to understand is that it still greatly expands Medicaid by eliminating the current coverage gap. Many Utahns who were previously declined will still qualify for Medicaid with the approval of Senate Bill 96.
The Senate has passed Senate Bill 96. We urge the House to do the same. And we ask Gov. Gary Herbert to sign Senate Bill 96 into law.
Craig Paulson is the past-president of the Utah Association of Health Underwriters/Utah’s Benefits Specialists and the president of Altura Benefits.
Jonathan Johnson is a former GOP candidate for governor in Utah.