April 1, 2019

Utah becomes 1st state to get CMS' approval for partial Medicaid expansion

Daily Briefing

    CMS on Friday approved Utah's Medicaid waiver request to implement a partial Medicaid expansion, making Utah the first state to receive approval for a partial Medicaid expansion.

    Just updated: Where the states stand on Medicaid expansion

    CMS also approved Utah's request to implement Medicaid work requirements, just days after a federal judge struck down the agency's approval of Medicaid work requirements in Arkansas and Kentucky.

    Background: Utah voters OK ballot to expand Medicaid—but GOP lawmakers pass scaled back plan

    Under the Affordable Care Act (ACA), states expanding their Medicaid programs must offer coverage to individuals with incomes up to 138% of the federal poverty line (FPL). The federal government currently covers at least 90% of the cost of expanding Medicaid up to 138% FPL.

    Last year, 53% of Utah voters approved Proposition 3, which directs the state to expand Medicaid coverage to individuals with annual incomes up to 138% FPL and implement a 0.15% sales tax on nonfood items to cover the cost of the expansion. Under the measure, the state would expand Medicaid coverage to an estimated 150,000 Utah residents who currently do not qualify for Medicaid or subsidized insurance from the state's exchange market.

    However, the state's Republican lawmakers raised concerns that the ballot initiative's sales tax would not generate sufficient funds to cover the expansion's costs and introduced a bill to allow Utah to seek federal permission to scale back the expansion. The state's Legislature approved the measure, and Utah Gov. Gary Herbert last month (R) signed it into law. State officials then submitted a Medicaid waiver request to CMS seeking a partial Medicaid expansion, as well as other changes to the state's Medicaid program.

    CMS OKs partial Medicaid expansion

    Under the approved waiver request, CMS gave Utah permission to expand Medicaid eligibility to individuals with incomes less than or equal to 100% FPL, which is about $12,140 for an individual. The approval marks the first time the agency has approved a state's request to implement a Medicaid expansion that does not meet the standards for expansion laid out under the ACA.

    However, CMS rejected the state's request to receive the same level of federal cost-sharing as states that have fully expanded their Medicaid programs in accordance with the ACA. CMS said the federal government would cover 70% of the costs of Utah's partial Medicaid expansion.

    CMS also approved Utah's request to require some Medicaid beneficiaries to fulfill work requirements by:

    • Applying for a job;
    • Completing an assessment to determine their employment training needs;
    • Completing online job training; or
    • Registering for work using an online system.

    Utah under the waiver will not require affected beneficiaries to report work hours.

    In addition, CMS approved Utah's request to cap enrollment in the state's partially expanded Medicaid program if costs associated with the expansion exceed funding provided by the state Legislature. However, CMS did not approve the state's request to establish per capita cost limits for beneficiaries covered under the state's partially expanded Medicaid program.

    CMS in its approval letter wrote that Utah's waiver promotes Medicaid's purpose of providing health care because it expands Medicaid coverage to more state residents. CMS wrote, "Members of the adult expansion population, absent the demonstration, would be ineligible for any Medicaid benefits, and absent approval of the amendment, would be eligible only for highly limited benefits."

    Utah officials have estimated that the state under the new waiver will expand Medicaid coverage to about 90,000 Utah residents, down from the 150,000 residents who would have been covered under a full Medicaid expansion.

    Utah's partial Medicaid expansion took effect Monday, and the state's new Medicaid work requirements will take effect in January 2020.

    Reaction

    Randall Serr, director of the enrollment-assistance organization Take Care Utah, said the waiver's approval will allow tens of thousands of Utah residents to enroll in the state's expanded Medicaid program, which will "stabilize the health insurance market." He said the approval will "make it so there's less people going to the emergency [department]. There's going to be a lot of benefits that I think everyone will see once it's in place."

    Nathan Checketts, Utah's Medicaid director, said the approval provides "a great opportunity for individuals [who] are uninsured and below the poverty level" to enroll in Medicaid coverage. Checketts acknowledged the agency's approval of work requirements in Utah could prompt legal challenges, saying, "We'll have to see if that happens. This has been a state-by-state issue."

    However, other experts have warned CMS could face legal challenges if it approved a partial Medicaid expansion.

    New Georgia law allows state to seek partial Medicaid expansion and more

    The news of Utah's waiver approval came after Georgia Gov. Brian Kemp (R) on Wednesday signed a bill (SB 106) into law that authorizes his administration to seek federal permission to reform the state's health care system.

    The law, called the Patients First Act, grants the state broader authority to pursue two different types of federal waivers—both Medicaid waivers and state relief and empowerment waivers—to reshape the state's Medicaid program and ACA exchange market as far as current law allows. 

    For example, the Patients First Act allows the state to submit by June 30, 2020, a Medicaid waiver seeking federal permission to partially expand its Medicaid program and implement Medicaid work requirements.

    In addition, the law allows the state to submit a state relief and empower waiver to change the state's exchange market. For example, the law allows the state to seek federal permission to implement a reinsurance program for the state's exchange market.

    Kemp said the state will "work with consultants, CMS, and health care leaders in Washington to craft custom waivers to ensure all Georgians have access to quality affordable care" (Galewitz, Kaiser Health News, 3/29; Pradhan, Politico, 3/29; Baker, "Vitals," Axios, 4/1; Wood, Salt Lake Tribune, 3/29; Utah Department of Health release, 3/29; Raman, CQ News, 3/27 [subscription required]; AP/Forsyth County News, 3/27; Romoser, Inside Health Policy, 3/27 [subscription required]).

    Just updated: Where the states stand on Medicaid expansion

    The Supreme Court ruling on the Affordable Care Act (ACA) allowed states to opt of the law's Medicaid expansion, leaving each state's decision to participate in the hands of the nation's governors and state leaders.

    The Daily Briefing editorial teams have been tracking where each state stands on the issue since the ruling, combing through lawmakers' statements, press releases, and media coverage. In this latest iteration of our Medicaid map, we've determined each state's position based on legislative or executive actions to expand coverage to low-income residents using ACA funding.

    Get the Map

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