Utah must soon decide whether and how to expand Medicaid. It is a momentous choice. For two generations, Medicaid has provided health care to some needy Utahns — children, women with children and the disabled. Many groups note the federal government’s generous Medicaid matches and conclude that full expansion is a “no-brainer.”
The primary mission of Utah’s hospitals and heath care systems is to provide high quality, affordable health care to our fellow citizens. Knowing the transformational effects Medicaid expansion will have on Utahns and Utah’s finances, now and into the future, the Utah Hospital Association (UHA) has carefully considered the various options for Medicaid expansion, including not expanding it at all. UHA supports a limited and balanced approach to Medicaid expansion as follows.
Studies show conclusively that people with health coverage have much better health. Moreover, we strongly believe that it is part of the social compact to provide a “safety net” for those who cannot provide for themselves. It is that spirit that prompted Utah to participate in Medicaid in the first place, almost 50 years ago. Utah has shown that we take care of our own.
Expand Medicaid for individuals who live on a wage that is up to 100 percent of the federal poverty level (FPL). This action would open up Medicaid to those Utah citizens who cannot afford to purchase private insurance. The current federal poverty level is up to $11,490 for an individual and $23,550 for a family of four.
Institute a premium subsidy model for people with wages between 100 and 138 percent of FPL. Medicaid expansion was designed to cover individuals up to 138 percent of FPL. However, we have serious concerns about the unintended consequences of the Affordable Care Act-defined “full expansion” option. Approximately 113,000 adult Utahns in this income category already have employer-provided health insurance. It makes no sense to substitute publicly funded Medicaid for insurance now provided by the employers and the workers themselves (a phenomenon commonly referred to as “crowd out”). If Medicaid were available to workers in this category, employers would have a great incentive to steer employees to Medicaid to hold down company health care costs.
Others in this category also have access to private insurance, such as adult children under the age of 26 whose parents have health insurance and college students who can obtain a low-cost policy at their college. Moreover, people between 100 and 138 percent of the poverty level have access to health insurance through the federal health insurance exchange. These plans are with commercial health insurance companies. Second, the tax credit subsidies are very generous. In order to facilitate the adoption of plans through the exchange, UHA advocates the creation of a premium subsidy for individuals with incomes in the 100-138 percent FPL range.
By using the exchange, we preserve our commercial insurance market. And with the subsidy, all Utahns in this category can have affordable, high-quality health insurance. And by keeping most of current covered employees with their employer-based health coverage, we further solidify the private market instead of needlessly pushing tens of thousands of people into publicly funded Medicaid.
Negotiate for flexibility in managing Medicaid. Wisconsin, Iowa and Arkansas have negotiated innovative waivers with Secretary of Health and Human Services Kathleen Sebelius allowing flexibility, including allowing Medicaid funds to be used to purchase commercial health insurance rather than expanding traditional Medicaid. Pursuing a “block grant” under Section 1332 of the Affordable Care Act, which would likely not be available until 2017, would authorize the state to manage the Medicaid program or any programs developed in lieu of Medicaid. This element allows our state to pursue a uniquely “Utah” approach to coverage.
UHA respectfully recommends that Gov. Gary Herbert negotiate with federal officials to build a Utah model that would reduce the risk of “crowd out,” minimize costs to the taxpayer and provide coverage for uninsured people, especially those below 100 percent of the poverty level — those that would otherwise have no source of coverage.
Utah’s hospitals stand ready to help Herbert, state legislators and the Utah Department of Health bring coverage and quality health care within the reach of all Utahns.
Greg Bell is the president/CEO of Utah Hospital Association. David Entwistle is the board chairman of UHA. Edward Lamb, who also co-wrote this article, is the chairman-elect of UHA.
Copyright 2015, Deseret News Publishing Company