- 2015 Session
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Medicaid Expansion – The Basics
Contributed by Dustin Phelps
Utah Senate Intern Extraordinaire
Medicaid Expansion is one of the most important – and confusing – issues that we will face this year as a state. Everyone has heard about it but relatively few understand the who, what, when, where, and why’s of the situation. We asked one of our fantastic Senate interns to take out all the stops and help put things into layman’s terms for you, gentle Utah citizens. And so, here you have it – Medicaid Expansion 101, or Medicaid Expansion for Dummies.
Understanding the “Healthy Utah” Discussion
The Governor’s “Healthy Utah” plan is one of the most important proposals that the Utah State Legislature will consider this session. Unfortunately, it is also one of the most complicated.
Due to this complexity, we created a short guide to help interested citizens better understand the terminology and issues that are most relevant to the “Healthy Utah” discussion. With any luck, the information found below will help you to better understand what “Healthy Utah” is all about and where you stand on the issue.
1. What is all this talk about percentages of the poverty level?
• The poverty level is frequently mentioned in reference to the “Healthy Utah” plan because eligibility for health insurance assistance depends on income and income is measured as a percentage of the federal poverty level.
• Percentages of the federal poverty level are a measure of how much money an individual or family makes in relation to the federal poverty line.
For example, let’s take a family of 4. The federal poverty level for a family of 4 is currently $24,250. So, if such a family earns $18,187 per year, then they make 75% of the federal poverty level. But if a family of four earns $48,500 per year, they make 200% of the federal poverty level.
2. I’ve heard about the “coverage-gap” or “donut-hole,” what is it?
The Affordable Care Act provides premium assistance to purchase health insurance for individuals with an income above the federal poverty level. However, it does not provide premium assistance to individuals who live below the poverty level.
While pregnant women, children of the poor, and individuals with certain disabilities or illnesses have long been covered by Medicaid, many adults living in poverty do not qualify for Medicaid assistance.
This has created an odd situation in which thousands of impoverished Utahns do not qualify for assistance in obtaining healthcare because they are not eligible for Medicaid and they earn too little to qualify for ACA premium subsidies. People who live below the poverty line and do not qualify for either Medicaid or insurance subsidies are said to be in the “coverage gap”.
3. What is the general difference between “Medicaid Expansion” and “Healthy Utah?”
• Under the ACA, states have the option to extend the traditional medicaid program to adults who earn up to 33% of the poverty level and receive enhanced federal funding. This is the “Medicaid Expansion.”
• “Healthy Utah” covers the same adults and qualifies for the same enhanced funding, but it does so by taking a different approach. It subsidizes the purchased private health plans instead of covering people through the traditional Medicaid Program.
4. How much would “Healthy Utah” cost the state of Utah?
• The federal government has agreed to cover most of the costs associated with “Healthy Utah.” During the first year of implementation, the federal government would be expected to cover nearly all costs. Over the following three years, Utah would gradually take on a greater share of the cost, but the federal government has agreed to cap the state’s cost share at 10%.
• It is estimated that when hits the full 10% cap in fiscal year 2021, the cost will be $78 million.
5. What are some of the arguments made in favor of “Healthy Utah?”
• Many argue that because Utahns are required to pay new taxes to fund “Obamacare,” the state ought to bring at least some of that money back by implementing federal funds for Healthy Utah. Otherwise, we leave billions of Utah tax dollars in the hands of the federal government instead of infusing that money into Utah’s economy.
• The Governor has argued that Healthy Utah is a more efficient alternative to the Medicaid expansion because it relies on the private market.
• Various individuals and organizations assert that “Healthy Utah” should be adopted because it will help to insure 140,000 people who would otherwise not have access to health insurance.
Detailed projections on Healthy Utah enrollment numbers, potential cost to Utah, and federal money returned to the state are available here.
Senator Brian Shiozawa is running legislation that would authorize implementation of Healthy Utah – 2015’s SB 164.
6. Are there any alternatives to “Healthy Utah?”
• Absolutely. Senator Christensen has introduced an alternative plan. You can read Senator Christensen’s explanation of his proposal here.
• Senator Davis is sponsoring SB83 – considered ‘full Medicaid Expansion’.
• Representative Spendlove is sponsoring HB307, medicaid expansion, but only to 100% of the poverty level.
• We can also choose to do nothing.
Thanks for tuning in, Utah. Drop us a line to let us know what you think, or contact your senator about it here.