Utah’s governor just signed a bill that authorizes a 1115 Medicaid demonstration waiver. The waiver combines work requirements with a request. This is interesting on several levesl.
The new law would ask the federal government to allow Utah to widen it’s low-income health insurance program. Right now, a single adult with Medicaid coverage can only make about $600 per year — essentially homeless. Under the new law, the same individual could be covered if they make anything up to the poverty level, approximately $12,000 per year.
It also adds a work requirement for those who qualify. If an individual is unemployed and wants Medicaid coverage, they’ll have to do things like get job training, volunteer or take classes.
This is interesting on several levels. First it is a red state with a Republican trifecta trying to expand Medicaid. They are asking for a work requirement but as far as I can tell the requirement would only apply to the expansion population. This is still a lot of people who make very little money so the vagaries of scheduling and intermittent work will be a massive implementation challenge but the work requirement is less restrictive than several that have been requested.
Far more interesting to me is that Utah is asking for a partial expansion. We’ve talked about partial expansions before.
The distributional consequences are important. For people who earn between 100-138% FPL in states that have not expanded Medicaid, nothing will change for them. They are no worse off. People who live on less than 100% FPL in these states will be dramatically better off as they will have Medicaid for their coverage….
More interestingly to me is that CMS recently turned down Arkansas’s request to change the enhanced match rate Medicaid expansion to 100% Federal Poverty Level (FPL) instead of the current 138% FPL. However there is a very critical difference: Arkansas had already fully expanded Medicaid. They went for the most expensive and convoluted system of expansion possible by sending most of the healthy population into the Exchange pool. That system costs 24% more than a straight up expansion of Medicaid but it got local buy-in. However Arkansas is now paying a fraction of the cost of expansion and they’ve been moving more of their private option population back into the less expensive legacy Medicaid system. The Arkansas proposal to shift the 100-138% FPL cohort to the Exchanges and off of Medicaid was an attempt to dodge previously obligated committments.
Utah has never expanded Medicaid. The 100-138% cohort is already on the Exchange and they are already eligible for federal subsidies. Expanding Medicaid to only 100% has no increase in costs for the Federal government on the Exchange side of the ledger. If there is only a partial expansion, the Feds are paying for the 100-138% cohort and if there is no expansion the Feds are still paying. This is a very different fact pattern than Arkansas so there is a chance that CMS could approve the waiver.
And if that is the case, then several more hold-out states would probably seek the same waiver.