Utah governor unveils Medicaid expansion alternative

February 28

After weeks of loud debate within the Republican-dominated legislature, Utah Gov. Gary Herbert (R) said Thursday he will seek to use federal funding intended to expand Medicaid to help provide coverage for more than 100,000 low-income residents.

But Herbert’s plan won’t be a straightforward expansion of Utah’s Medicaid program. Instead, Herbert will ask the Department of Health and Human Services to provide block grants that would allow the state to spend the money on subsidies for Utah residents who make up to 138 percent of the federal poverty line.

The three-year pilot program Herbert proposed  Thursday, dubbed the Healthy Utah Plan, would provide subsidies to individuals and families based on their ability to work, their household incomes and access to health care through employers, Herbert’s office said.

Participants would have to make co-payments, and parents with children on Medicaid would have the option to put their whole family on private insurance plans. Recipients of the subsidies would contribute an average of around $420 per year toward their own health care.

Herbert took pains to distance his plan from a traditional Medicaid expansion.

“I am not recommending an expansion of the federal Medicaid program. However, I am prepared to pursue a block grant from the federal government to bring Utah taxpayer dollars back to our state to fulfill our responsibility to care for the poorest among us,” he said in a statement unveiling the proposal.

The state legislature, which is dominated by Republicans, had been reluctant to embrace Medicaid expansion; Herbert, on the other hand, has said doing nothing is not an option.

Herbert’s administration compared the Utah plan to similar proposals in Arkansas and Iowa, both of which have already received waivers from HHS. Seeking a waiver for a program dubbed something other than Medicaid expansion gives Republican governors and legislators the political cover necessary to accept the federal money doled out under the Affordable Care Act, a law that’s deeply unpopular among Republican voters and party activists.

Other Republican-controlled states like Indiana, Pennsylvania and Wisconsin have sought HHS waivers. In Arkansas and New Hampshire, where Republican legislative leaders are working with Democratic governors, the expansion proposal includes a so-called “private option,” in which the states would provide subsidies to low-income residents who would then purchase private insurance plans.

Though in public they universally oppose the health-care law, Republican governors find the money hard to turn down. Utah would stand to gain $258 million per year in federal funding by expanding Medicaid to those who make up to 138 percent of the federal poverty limit.

Reid Wilson covers state politics and policy for the Washington Post's GovBeat blog. He's a former editor in chief of The Hotline, the premier tip sheet on campaigns and elections, and he's a complete political junkie.
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