Utah already won a key Obamacare concession. Can it win another?


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Utah Gov. Gary Herbert is looking for a way to join the Medicaid expansion, and that could have national implications.

Herbert, whose aides have been meeting with federal officials at the Centers for Medicare and Medicaid Services since last week, told local media yesterday that he hopes to have a deal in place with the Obama administration by the summer.

“There's clearly a growing understanding in the Obama administration in the need for states to have more flexibility,” the Republican governor told reporters.

A good number of the 24 states that haven’t joined the Medicaid expansion are looking at a way they could enter the program by crafting their own plans. Arkansas and Iowa last year paved the way after getting federal approval to use their health insurance exchanges to provide private coverage to the Medicaid expansion population.

Herbert has broadly sketched out what his plan would look like. He’s asking the feds for a three-year block grant to cover about 110,000 low-income people with private insurance. He’s also seeking cost-sharing and work requirements that could be tough sticking points with CMS.

Still, if there were a state to push the administration for more flexibility, Utah would be the likely candidate. That’s because it already won a key concession from the Obama administration on its exchange design.

Utah had its own exchange for small businesses that predated the federal health care law, and the state wanted to keep running it as is without also having to oversee individual enrollment. The Obama administration originally said states couldn’t divide up an exchange like that – but after Utah battled with the feds for three years on this point, CMS changed course early last year and said states could choose to run just their own small business exchanges.

Since then, three other GOP states have taken that option besides Utah. Idaho and New Mexico are running just small business exchanges this year – though they’re supposed to take over control of the individual exchange in 2015 – and Mississippi is scheduled to open one this summer.

Even if Herbert can negotiate an arrangement with the feds, there’s no guarantee that his state will support it. The Legislature was reluctant to expand the Medicaid program this session, and the House speaker has been strongly opposed to the idea. Still, it will be important to see how Herbert and the Obama administration work together on Obamacare again.

Jason Millman covers all things health policy, with a focus on Obamacare implementation. He previously covered health policy for Politico.
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