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Utah lawmakers seek to scale back voter-approved Medicaid expansion

When voters of deep-red Utah approved a ballot initiative to expand Medicaid in November, David Heslington, bishop of an inner-city congregation of The Church of Jesus Christ of Latter-day Saints, was elated. He has seen firsthand that expanding health coverage to poor and working-class Utahns would save lives, having conducted funerals in the spring for two men who had overdosed on opioids after being unable to afford addiction treatment.

Two weeks ago, as the Utah Legislature rushed to shred that initiative, Heslington implored lawmakers to reconsider: “Do you feel any obligation to implement the will of the people you supposedly represent?”

On Monday, the Legislature gave its answer: It enacted a Medicaid plan that would cover tens of thousands fewer people than what voters called for, despite days of demonstrations by people carrying signs saying, “Respect democracy, our vote matters.” Republican Gov. Gary Herbert has said he is reviewing the bill, and he is expected to sign it.

Just before Monday’s final vote, state Sen. Allen Christensen, a Republican and the bill’s chief sponsor, said GOP lawmakers “are doing the long-term responsible thing.”

What has been playing out within Utah’s granite Capitol has ripple effects that stretch beyond the sparsely populated Western state.

The actions of Utah’s lawmakers are testing the legitimacy of the citizen initiative, a staple of small-D democracy in about half the states. Idaho lawmakers also are considering restrictions to a Medicaid expansion approved by voters there. Maine residents approved a similar ballot initiative in 2017 but had to wait for the arrival of a Democratic governor for the expansion to finally begin this month.

At the same time, the legislation just approved by Utah’s heavily Republican Legislature is unlike any the federal government has allowed before, and it would test the willingness of the Trump administration to rethink a central tenet of how the Affordable Care Act has been carried out.

Until now, if a state chose to expand Medicaid under the federal health law – as about three dozen states plus the District of Columbia have – federal officials have required them to include people with incomes up to 138 percent of the federal poverty line, nearly $17,000 for an individual or nearly $35,000 for a family of four.

Utah’s plan expands Medicaid only to people earning up to the poverty line and wants the federal government to pay the state the more generous reimbursement reserved for a full expansion under the ACA. The expansion would broaden coverage beyond the state’s stringent limit of parents earning up to 60 percent of the poverty level and no other adults unless they are homeless.

Both the Obama administration and Trump’s health care advisers have rebuffed states seeking to raise eligibility only partly – including an earlier request by Utah in June.

But that is what Utah is preparing to ask for. If the federal government goes along, health policy experts predict, requests from other Republican-led states will follow.

According to Utah’s expansion advocates, the legislation overriding voters’ will is almost certain to spawn litigation to try to stop it.

Lawmakers immediately began considering plans to limit the ballot initiative when they convened in late January, leading to a rally outside the Capitol that was the biggest in the six years advocates have been pressing to expand Medicaid, according to Matthew Slonaker, executive director of the Utah Health Policy Project, a nonprofit that supported the initiative, called Prop 3. “I have never seen people so furious,” Slonaker said.

Advocates of full expansion say this is a risky gamble that could end up costing the state millions of dollars because of the way the federal government reimburses for Medicaid.

However, two members of the governor’s staff and a leading Republican lawmaker said they have received private assurances from officials at the top of the Centers of Medicare and Medicaid Services (CMS), which oversees the Medicaid program, that they are receptive to Utah’s plan.

Paul Edwards, the governor’s deputy chief of staff for policy, and Nathan Checketts, the state Medicaid director, said in interviews that CMS officials had at first said they could not approve the state’s application in the summer for a partial Medicaid expansion. But after the November elections, CMS Administrator Seema Verma signaled to Herbert that she is open to that, Edwards said.

Edwards and Checketts said that CMS officials said they would consider a partial expansion if Utah combined it with an even more unorthodox idea – enacting per-person caps for Medicaid spending – an idea long popular with conservatives and which represents a fundamental shift in the program from an entitlement available to anyone who is eligible, to a grant with a per capita dollar limit. This idea was part of the ACA-repeal legislation that failed in Congress in 2017.

Republican Rep. Jim Dunnigan, sponsor of the House version of the Medicaid plan that passed Friday, said he talked to a senior CMS official at a recent conference who told him the same thing. “We think there is a very good chance,” Dunnigan said in an interview.

A CMS spokesman declined to comment on the prospects for Utah’s request, saying the agency does not comment on applications before they are evaluated.

The prospect of a capped Medicaid program and a limited expansion has stirred anger. On Friday, as the House debated its version the bill, a quartet of faith leaders linked arms and sat on the floor outside the chamber.

Carissa Monroy, a family physician at a community health center on Salt Lake City’s south side, has attended rallies and roamed the Capitol’s halls to meet with lawmakers. Some of her patients are refugees and, after qualifying for an initial eight months of health coverage, often become uninsured.

“Utahns in general are pretty caring and giving people,” she said. “It feels like it’s this mental block with not wanting to expand Medicaid, because so many of the Republican legislators have been opposed to it for so long.”

In the past week, the Utah Senate and House had different ideas about how far to stray from what voters approved by 53 percent in Prop 3. Under both the Senate and House versions, expansion up to the poverty line would allow perhaps 80,000 to 90,000 poor Utahns to join the program, but exclude perhaps another 40,000 who have incomes up to the ACA’s threshold for the full expansion.

Under the initial Senate bill, if the federal government didn’t give permission for the higher reimbursement rate, Utah would not expand Medicaid at all.

But the final version includes what lawmakers called a backstop. Medicaid would expand in April to include people up to the federal poverty line, with those with slightly higher incomes encouraged to sign up for private health plans through the ACA’s federal insurance marketplace.

To start with, the federal government would pay its normal share of Medicaid – 70 percent – while the state seeks permission for the richer, 90 percent reimbursement normally reserved for full Medicaid expansions. And if the federal government rejects that, then, the full expansion that voters approved would begin in mid-2020.

For the governor, this Medicaid plan culminated years of attempts to extend insurance to more low-income Utahns in a way that is palatable to conservatives. In 2015, for instance, the state House rejected Herbert’s proposal, similar to an arrangement in Arkansas, to expand Medicaid by enrolling eligible people in private ACA plans.

Heslington, who rotated out of a seven-year term as a Latter-day Saint bishop last year, believes the state’s restrictive policies have led to people with untreated mental illnesses sleeping on Salt Lake City’s streets. “That leaves the churches, the nonprofit organizations with good volunteers, just trying to help people in need,” he said, and they don’t always succeed.

Dunnigan said that steering people with slightly higher incomes into ACA health plans would give them better access to medical specialists, who can be reluctant to treat Medicaid patients at low payment rates.

But Rep. Marie Poulson, a Democrat, cautioned her colleagues not to “fall into the trap of thinking our voters are not informed. . . . We need to remind ourselves they voted for us.”

Slonaker, of the Utah Health Policy Project, said the legislative plan would cover fewer people at greater cost to the state, while “the voters’ intent is playing second fiddle.” In the meantime, his group plans to start enrolling who they can for coverage in April.

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