Will Utah get a Medicaid waiver for limited expansion? Republicans in the Legislature are confident it will happen

Utah Capitol 20

Gov. Gary Herbert said Tuesday he believes Utah lawmakers are on the right track with their alternative plan for Medicaid expansion that supplants the voter-approved Prop. 3.

“I believe this is going to be the long-term Medicaid program not only for Utah but will point the way for other states,” Herbert told UtahPolicy.com.

Despite a public outcry, lawmakers are pushing forward with SB96, which expands Medicaid coverage to Utahns earning up to 100% of the federal poverty level, which is estimated to be about 90,000 people. By contrast, Prop. 3 if implemented gives health care to an additional 58,000 residents by covering those earning up to 138% of the poverty level.

The more limited plan pushed by lawmakers would be initially paid for by a 70/30 cost split with the federal government. If the state is successful in winning a waiver from the feds, then the state portion of the cost drops to just 10%. The 90/10 split is part of the Affordable Care Act but requires covering up to 138% of poverty, thus the need for the waiver.

Opponents of SB96 point out no state has been successful in winning a waiver so far, but Republicans in the legislature are convinced they’re going to win one with this effort.

One Republican lawmaker involved in the planning for SB96 tells UtahPolicy.com that they met with a top official from CMS (The Centers for Medicaid and Medicare Service) two days before the start of this year’s session. During the meeting, they were told CMS is developing a “special waiver” for states to give them the 90/10 cost split if they implement limited Medicaid expansion, even if the plan includes caps or work requirements as Utah’s plan does. The lawmaker asked that we withhold their name.

Republicans say privately they’re extremely confident that Utah, and other states, will be awarded this new waiver sometime in the 12 months following implementation of their Medicaid expansion, allowing the 90/10 cost breakdown while giving health care to fewer people than the full expansion under Prop. 3. That means SB96 is essentially a “bridge” program to fund expansion until that happens. 

Herbert echoed that optimism in his Tuesday comments.

“I think we have opportunities for waivers and additional changes in the program that will give states more flexibility,” he said.

Republicans are pushing hard to get SB96 to the governor’s desk by Friday with a ⅔ majority in both houses. That makes the legislation go into effect upon the governor’s signature, and will allow the state to apply for a separate waiver which authorizes the expansion to 100% of poverty contained in SB96. Legislative sources say they have been promised by CMS that waiver would be approved, allowing the program to go into effect by April 1, which is the original effective date for Prop. 3.

House GOP leaders are bringing lots of pressure to bear on their members, hoping to secure the 50 votes needed for the ⅔ majority. UtahPolicy.com is told several GOP members who represent more moderate or Democratic-leaning districts have been summoned to Speaker Brad Wilson’s office over the past few days to try and convince them to approve the bill.

However, many of those members say privately they are worried about a self-repeal provision inside SB96. As UtahPolicy.com first reported on Monday, if the state is not able to secure the waivers that lawmakers are counting on, Medicaid expansion will be rolled back.

“That’s a non-starter for me,” said one House Republican who was on the fence about the bill.

Herbert said that provision does give him pause, but he’s confident that Medicaid expansion in Utah will go forward one way or another.

“I’d be concerned about that if I didn’t think there was a way out,” he said. “I think we’re going ahead on this. I don’t think there’s any turning back.”

SB96 is up for debate on Wednesday afternoon in the House Business and Labor Committee. Democrats on the House Rules Committee attempted to send the bill to the House Health and Human Services Committee but were overruled by Republicans on a party-line vote 6-2. The HHS Committee had the potential to slow down SB96’s march as several medical professionals sit on that committee, which is the reason Democrats wanted to send the bill there. Republicans easily thwarted that gambit.

Lawmakers are pushing their own Medicaid expansion program over the vocal objections of the public as they say the initiative will eventually cost too much. Herbert says SB96, which has an estimated cost of $71 million over the first two years but could save the state millions of dollars in the future, is the preferable route, even though many Utah voters are upset that the legislature is ignoring the majority who voted in favor of Prop. 3.

“My concern is if we implement the current initiative exactly the way it is, we will be upside down by the third year and will have to come up with extra money somewhere,” he said. “That means raising taxes or take it from other existing programs. I support doing this in a fiscally responsible and sustainable way, and I think lawmakers are moving in the right direction.”