Over the next few weeks, Governor Herbert’s “Healthy Utah Plan” will be under consideration by the Utah State Legislature. Backed by the Utah Medical Association, the University of Utah Healthcare System and the Utah Hospital Association, Healthy Utah is the product of months of back and forth negotiations between the Governor and the U.S. Department of Health and Human Services.
As the most aggressive expansion proposal with any chance of passing, Healthy Utah is designed to provide Medicaid-financed healthcare services to uninsured adult Utahns who fall in the “coverage gap.” These approximately 95,000 people make too much to be eligible for traditional Medicaid, but do not make enough to qualify for federal health insurance tax credits. Currently, these individuals get coverage either by paying out-of-pocket or from Utah’s charity care network.
In order to move these 95,000 people from the coverage gap to coverage, Healthy Utah deepens Utah’s relationship with the Affordable Care Act (Obamacare) and proposes adding another $78 million in ongoing State funding. The Governor has stated on several occasions that Healthy Utah is designed to recoup some of the estimated $680 million in Obamacare-related taxes sent from Utah to Washington. In essence, this means using more Utah taxpayer money via the state to get paid back with “matching” Utah taxpayer money via the feds.
Perhaps the additional expenditure would make sense if it came with some meaningful concessions from the federal government, or included limits on the relationship Utah is bound to with the federal government. But it does not. And while this costly relationship between the state and the feds appears to have the unanimous support of State Democratic lawmakers and the editorial boards of both major newspapers, it does not make financial sense. An expenditure of taxpayer money is still an expenditure of taxpayer money, regardless of the government source.
The Utah Legislature’s Healthcare Reform Taskforce spent the bulk of its meetings last year studying Medicaid Expansion and the problems surrounding Obamacare. Near the end of the year, the Taskforce concluded that Healthy Utah should not even be considered as an option before the 2015 legislature.
Importantly, the Taskforce based its recommendation on Utah’s long, difficult history with Medicaid. As the go-to program to finance healthcare coverage for Utah’s poor, Medicaid has a well-earned reputation as inefficient and expensive. Among other things, Medicaid does not compensate providers fairly and it requires a tremendous cost shift to those who buy commercial insurance.
This is not a system to expand, but one that should be reformed. Four years ago the legislature did just that. By unanimously passing SB 180, the legislature created Medicaid Accountable Care Organizations (ACOs), simultaneously capped related Medicaid spending to the same rate as the general fund growth, and removed some of the perverse incentives that drove costs up and quality down.
Those on the Taskforce, who understand Medicaid the most, concluded that the Healthy Utah Plan would jeopardize these important reforms — among other things — and put the financing of traditional Medicaid at further risk. The Taxpayers Association commends the Taskforce for its thorough study of the Governor’s plan and encourages the full Legislature to follow suit in its opposition to Healthy Utah.