Trump administration grants Utah’s waiver to begin Medicaid expansion under Prop. 3 replacement

SALT LAKE CITY -- The Trump administration has granted Utah's request for a waiver on Medicaid expansion.

The waiver means Utah will be able to offer Medicaid coverage starting April 1. However, it's not the full expansion voters approved in Proposition 3.

"We estimate 70,000 to 80,000 individuals will gain coverage through this expansion," said Nate Checketts, the deputy director of the Utah Department of Health.

The waiver means people making up to 100 percent of the federal poverty level (roughly $1,000 a month) qualify. The feds will cover 70% of the costs.

"We’re trying to help people as much as we can but there are real pitfalls. They built a bridge across the coverage gap but it has major gaps in between the planks," said Stacy Stanford, the policy director for the Utah Health Policy Project.

Voters approved Prop. 3, which expanded Medicaid to people up to 138% of the federal poverty level. They also approved a sales tax hike. But the Utah State Legislature said the money wasn't enough to cover ballooning healthcare costs, and they feared a budget buster. So they swapped it out with Senate Bill 96.

"We’re looking at about half of the people who would have gotten coverage under Proposition 3 will get coverage now," Stanford said in an interview with FOX 13 on Friday.

Utah Decides Healthcare, which sponsored Prop. 3, blasted the waiver.

"This waiver leaves more than 50,000 Utahns without health insurance and sends billions of our tax dollars back to Washington. In their rush to overturn the will of voters, politicians cooked up a backroom deal that leaves us paying three-times as much per person covered," said Andrew Roberts with the initiative campaign.

In his own statement, Governor Gary Herbert praised the waiver.

"This is an important first step in covering vulnerable Utahns in a financially sustainable way," he said. "But it’s just a first step. In the coming months, we will submit a detailed proposal seeking a new funding arrangement with CMS that will decrease the state’s share of the costs, provide the federal government with assurances on its costs, and provide the state with additional flexibility to manage the program."

Rep. Jim Dunnigan, R-Taylorsville, co-sponsored SB96. He insisted the bill proved the most coverage to adults who need it (and children are already covered).

"We’re going to leave 40,000 Utahns that were included in the Prop. 3 numbers in the federal marketplace where they’re going to be better served," he said Friday.

Under a 70/30 split, the state has agreed to fund it until July 2020. The state, meanwhile, will seek a second waiver asking the Trump administration to cover 90% of the healthcare costs.

"If by July 1, 2020 we haven’t received our 90% waiver then we will expand to 138% of poverty," Rep. Dunnigan told FOX 13. "Which automatically draws back to 90%."

Given the federal government approved the waiver on Friday, he was confident it would happen.

In addition to the 70/30 split, the federal government also approved a work requirement that was built into SB96. But courts have struck down work requirements in other states.

"CMS did approve that today with a work requirement for this expansion program," Checketts said. "We are not ready to implement that with our eligibility system so that will come into place likely January of 2020."

The conservative-leaning think tank Sutherland Institute, which supported the replacement bill, praised the requirement.

"This is a good thing for Utah families, taxpayers and the state's most vulnerable populations," the group's Derek Monson said in a statement. "The new work requirements in Medicaid will help low-income, vulnerable families climb out of poverty and the enrollment cap will protect taxpayers from unpredictable Medicaid costs."

Rep. Dunnigan said it was more of a "work effort" similar to what Utah requires for food stamps. However, given the court rulings in other states, it's possible that gets struck down. He acknowledged a severability clause in the bill if something is rejected by the courts.

Stanford said there would likely be a legal challenge on either the work requirement or the enrollment caps.

"There’s absolutely going to be some kind of legal action," she told FOX 13.

Despite the protests and criticism of the Prop. 3 replacement bill, Rep. Dunnigan said he was happy to see the waivers granted and people begin to get coverage.

"It’s going to be a great benefit in their lives," he said.

Applications can be submitted starting Monday, April 1, at this link. 

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