Lawmakers warned Gov. Gary Herbert's Medicaid expansion alternative carries 'substantial risk'

Published: Wednesday, June 18 2014 11:55 p.m. MDT

Updated: Friday, June 20 2014 7:13 a.m. MDT

GOP lawmakers were warned Wednesday the cost of accepting the nearly $300 million in Medicaid expansion money available under President Barack Obama's health care law may be much more than expected.

Matt Gade, Deseret News

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SALT LAKE CITY — GOP lawmakers were warned Wednesday the cost of accepting the nearly $300 million in Medicaid expansion money available under President Barack Obama's health care law may be much more than expected.

Dan Liljenquist, a former state senator, told both the House and Senate Republican caucuses that as many as 400,000 low-income Utahns could end up losing their employer-provided insurance and have to turn to the government.

That's on top of the 57,000 Utahns earning at least the federal poverty level expected to be covered under Gov. Gary Herbert's proposed "Healthy Utah" alternative to Medicaid expansion under the Affordable Care Act, Liljenquist said.

"That takes the out-year projections of an expansion to 138 (percent of the poverty level) and basically blows them out of the water. It's not a $50 million proposition" annually, but $250 million, Liljenquist said.

The former U.S. Senate candidate said there is a "substantial risk in having the state expand" coverage to that level because of having to eventually cover 10 percent of the cost.

He said he was not talking about providing coverage for nearly 60,000 Utahns earning up to 100 percent of the federal poverty level — less than $11,500 annually for a single person and less than $22,550 for a family of four.

"Don't get me wrong. I'm not opposed to looking at ways to help those folks," Liljenquist said.

Those Utahns are in the so-called coverage gap because Obamacare does not provide subsidies to offset their insurance costs until a state accepts Medicaid expansion. Herbert is trying to win federal approval for a state-run program.

David Patton, executive director of the state Department of Health, said the governor is aware of the concerns raised by Liljenquist that employers will decide to forgo the expense of offering insurance coverage.

"I think it is a legitimate risk," Patton said, even though he suggested Liljenquist's estimate of the number of Utahns impacted is high.

The latest version of the governor's plan to use the nearly $300 million available to the state for Medicaid expansion still calls for a three-year pilot program covering Utahns earning up to 138 percent of the poverty level.

But Patton said after the three years, the state is looking at what he called a "fallback position," dropping coverage for those Utahns earning above 100 percent of poverty. Those with below-poverty income levels could revert to Medicaid coverage.

"I think the bottom line in what Sen. Liljenquist is talking about is trying to do the same thing we're trying to do," Patton said. "If we can incorporate it with the governor's plan, we're great with that."

Patton said it's a good idea because the federal government is expected to pick up all of the costs for the full coverage for three years. During that time, he said it will become clearer what employers intend to do.

Herbert was in Washington, D.C., last week along with Patton and Rep. Jim Dunnigan, R-Taylorsville, the head of the Legislature's Health Reform Task Force, to meet with new U.S. Health and Human Services Secretary Sylvia Burwell.

Although the governor had said he hoped to win the Obama administration's approval soon enough to call lawmakers into special session this summer to approve his plan, that may not happen until fall.

Patton said that means a new plan couldn't be in place until July 1, 2015, although regular Medicaid or another type of coverage would be made available starting next January for six months.

Lawmakers fought over what to do about Medicaid expansion during the 2014 Legislature but failed to reach agreement before the session ended in March. The task force is now studying alternatives.

House Speaker Becky Lockhart, R-Provo, who is seen as possibly challenging the governor in 2016, favored bypassing the Medicaid expansion money in favor of using $35 million in state funds for limited coverage.

Lockhart said Wednesday she is still concerned about the long-term impacts of accepting the federal dollars available.

"Attaching ourselves as a state to Obamacare is extremely concerning to me," she said.

The speaker said again that lawmakers prefer to wait until the 2015 Legislature begins in January to consider a plan to deal with the issue, rather than in a special session.

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