The Utah Legislature is concerned about the potential for cost overruns from implementation of Proposition 3, the Medicaid expansion. The effort to install “guardrails” on Medicaid expansion is SB96. It expands Medicaid to 100 percent of poverty level, reduces predicted costs, asks for a waiver from the federal government to implement work requirements and asks to allow funding for supportive housing. The Medicaid expansion and tax increase to fund it is still to be implemented on April 1, 2019.
The biggest question raised in the discussion is if the federal government will follow through on its verbal “promise” to agree to the waiver and pay Utah for expanding Medicaid at a 70/30 rate. If the waiver is not agreed to by April 1, Utah taxpayers will be on the hook for hundreds of millions of dollars spent to expand Medicaid. When the Legislature tried to expand Medicaid for mental health treatment, the federal government did not give the waiver and Utah rescinded the request when Proposition 3 was passed. Other states, specifically Kentucky, had their waiver request refused. In other words, there is no guarantee that Utah will be reimbursed by the federal government for spending money on health care expansion that is not approved ahead of time. It is like the federal government’s promise to reimburse Utah for keeping the national parks open during the last government shutdown. Utah did not get the money promised.
Another issue raised is the loss of almost a billion annually in money injected into Utah by the federal government if the Legislature stops Proposition 3 Medicaid expansion. It would be like losing half of the economic benefits of Hill Air Force Base. Hill Air Force Base spends $1.38 billion on salaries and over half a billion on contracts, construction and supplies. That billion from Medicaid expansion does not disappear, but is spent on Utah services that can double the indirect financial benefits, allowing recipients (doctors, medical practitioners) to spend more at Utah businesses. That billion is coming into Utah every year, if Proposition 3 is allowed to be implemented.
Many medical professionals have raised the issue of requiring work requirements for mental health treatment, something that is sorely lacking from the effort to reduce drug and alcohol abuse. Very few people who need mental health services will be willing to meet the work requirements. Even Operation Rio Grande provides evidence of the difficulty of many to get and continue in jobs. Over 3,000 applied for Medicaid expansion benefits (for the chronically homeless) and only 152 are working, according to the January 2019 Operation Rio Grande dashboard.
The concern about cost overruns during Medicaid expansion in other states does not provide a good prediction of what will happen in Utah. Utah has the lowest rate of unhealthy habits in the country. Trying to predict that we will have a cost overrun from health care expansion assumes that we are as unhealthy and use tobacco and alcohol as bad as other states. It makes more sense to implement Proposition 3 and see the real issues and if any problems develop after eight months, and if so, the Legislature can fine-tune the expansion then.4 comments on this story
The waiver will also request to use funds for supportive housing. But rent, by law, cannot be covered by Medicaid. Congressional action may be needed. In other words, a waiver is even more doubtful.
Proposition 3 should be implemented April 1, 2019, without any attempt to change the plan. To change the plan risks hundreds of millions of Utah taxpayers’ money without a guarantee that the federal government will repay Utah. Utah will also lose up to a billion dollars annually that will be a big economic development boost. The economics of Proposition 3 should clearly show that it should be implemented without any attempt at changing it.