Word to the Wise: Beware Partial Expansion

Word to the Wise: Beware Partial Expansion

The Centers for Medicare and Medicaid Services (CMS) recently rejected giving enhanced federal funding to partially expand Utah’s Medicaid programs under the Affordable Care Act (ACA). 

Clearing the state to expand in March, CMS approved Utah’s previous request for the federal government to cover 70% of the health care costs for individuals earning up to 100% of the federal poverty level, with states responsible for the remaining 10% of costs.  

Utah’s rejected partial expansion sought for the federal government to cover 90% of the health care costs for individuals earning up to 100% of the federal poverty level, with states responsible for the remaining 10% of costs. This is considered “partial” because a 90-10 funding match is used in full Medicaid expansion to cover the health costs for individuals earning up to 138% of the federal poverty level. Utah, therefore, wanted to expand Medicaid to a lower threshold yet still receive enhanced federal spending.  

CMS said the White House rejected the request because Utah’s partial expansion allowed for fewer people to be enrolled than required by the ACA, and fully funding it “would invite continued reliance on a broken and unsustainable Obamacare system.”  

According to The Washington Post, Utah’s denial is less about the partial expansion and more about the ongoing fight regarding the ACA’s constitutionality. The Trump Administration has supported the 18 Republican attorneys general arguing in federal court that the ACA is unconstitutional. White House advisers argued that it would be nonsensical for the CMS to approve federal funding under the ACA while the administration pushed for the law’s repeal. 

Regardless of the motivation for the denial, Jessica Schubel, senior policy analyst for the Center on Budget and Policy priorities, said CMS’ move should serve as a harbinger for other states thinking of pursuing a partial expansion, such as Georgia and Oklahoma. “That is a very important message for states. It should be a wake-up call to them that instead of wasting taxpayer dollars on studies or spending more to cover less people then they should just move forward with full expansion.” 

The Kaiser Family Foundation (KFF) argues for full expansion over partial expansion. KFF states partial expansion could result in less coverage overall, and less coverage in Medicaid, compared to a full expansion. Partial expansion could also result in higher federal costs overall compared to a full expansion since the federal government pays the costs of subsidies in the marketplace and Medicaid costs are shared between states and federal government.  

KFF states studies show that full expansion, on the other hand, strengthens and supports the marketplace since providing Medicaid coverage for the 100-138% federal poverty level group improves the marketplace risk pool, resulting in lower premium marketplace premiums.  

Tom Hudachko, spokesman for the Utah Department of Health, said despite CMS’ rejection, the state still plans to submit a funding request to CMS. “We’re still preparing to submit our waiver as directed by state legislation passed this year. We have not received any indication, one way or the other, how CMS may act on the waiver once we do submit it.”  

Sources:

  1. https://www.washingtonpost.com/health/trump-administration-to-reject-full-medicaid-expansion-funding-for-utah/2019/07/26/964d5f3c-afd6-11e9-bc5c-e73b603e7f38_story.html 
  2. https://www.sltrib.com/news/politics/2019/07/27/we-probably-have/ 
  3. https://www.fiercehealthcare.com/payer/experts-say-states-may-put-partial-medicaid-expansion-pause-after-utah-denial
  4. https://www.deseretnews.com/article/900081481/utah-medicaid-funds-white-house-trump-sb96-affordable-care.html
  5. https://www.kff.org/medicaid/issue-brief/partial-medicaid-expansion-with-aca-enhanced-matching-funds-implications-for-financing-and-coverage/

The views and opinions expressed by the authors on this blog website and those providing comments are theirs alone, and do not reflect the opinions of Softheon. Please direct any questions or comments to research@softheon.com

Bisma M.

Bisma is the Health Care Policy Analyst at Softheon. She works to keep Softheon up to date on the latest health and technology policy updates. A native of New York, she ventured to the Midwest for college and is happy to be back in her home state.

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