One of the most critical issues the Legislature will consider this year is whether or not to expand Medicaid under the Affordable Care Act (Obamacare). Utahns may not know much about Medicaid and the people it helps. Medicaid is a public assistance program that provides health care services to low-income people.
Participants in Medicaid usually pay no part of the cost for covered medical services, though a small co-pay is sometimes required. Medicaid is funded with federal and state funds, but is administered by the state.
Many changes to health care laws have been made under the Affordable Care Act, but the changes to Medicaid are some of the most significant and expensive. The goal of the Affordable Care Act is to provide access to health care to more people. One of the major ways the Act seeks to accomplish this goal is by expanding Medicaid to a broader range of incomes and situations.
Last year, this issue of Medicaid expansion went all the way to the U.S. Supreme Court. As originally passed, the law would have forced all states to expand Medicaid or face a loss of funds for their existing Medicaid programs. The Supreme Court held that Medicaid could be expanded, but that the federal government couldn't cut the funding to existing programs of those states that didn't expand their programs. In other words the expansion is optional, not mandatory.
The issue of funding and how much cost the state can bear is at the heart of this debate Medicaid debate. The goal of any type of public assistance is that it be temporary and limited in scope. Our existing Medicaid program is the state's second largest budget after public education. Last year, the state's share of the Medicaid bill totaled about $475 million. With growth and inflation, the program is on pace to become the number one budget item by the end of the decade.
The state now has the choice of expanding Medicaid to include people traditionally not eligible for the program -- adults under 65 without children or have a disability who have incomes up to 133 percent of the federal poverty level. The federal government would pick up expansion costs for the first three years, but federal participation would not cover administrative overhead and would decline significantly in subsequent years, leaving the state with a very large fiscal obligation. Ongoing costs of this now-optional expansion would be significant.
Additionally, as the result of various provisions of the Affordable Care Act, the state will be required to implement a mandatory expansion of Medicaid, regardless of whether it implements the optional expansion. By itself, this mandatory expansion would impose additional annual budget obligations on the state beginning at around $45 million and escalating substantially.
In my article last week, I wrote about the very tight overall budget situation that exists this year. To put is simply, there isn't enough money to cover existing Medicaid costs, mandatory Medicaid costs, and optional Medicaid expansion costs in addition to the state's other needs.
In public education alone, we need to absorb the costs of 12,000 additional new schoolchildren entering public school this fall. There simply isn't enough money to fund this one area of the state budget without sacrificing other programs. Our compassion for the less fortunate may be limitless, but our funding is not. We must be wise in order to do the most good for the broadest possible group of people.
Brad Dee is the House Majority Leader. He represents House District 11, which covers portions of Davis and Weber counties.