Utah needs Medicaid expansion as outlined by the ACA

Apr 4 2013 - 3:21pm

When people think of Medicaid, many assume it's for unemployed people who look to the government for health care coverage. But that's far from the case.

In Utah, most adults without children are completely ineligible for Medicaid benefits. Adults with children are eligible, but only up to 44 percent of the federal poverty limit (FPL) which is $10,360 for a family of four. People with disabilities are also covered, but only if they earn less than $15,000 a year. Those who are eligible just slightly beyond this limit are children under five and pregnant women. Most people on Medicaid are the "working poor" who can't afford coverage or do not have the option through their employer.

That's why AARP Utah supports expansion of the program in our state as outlined in the Affordable Care Act (ACA). It's important for people to pay their fair share for health care, but it's also important to provide a safety net for those with disabilities or extremely low income. The Supreme Court upheld the law but ruled that states have the freedom to choose whether to expand the program to cover adults up to 133 percent of the FPL.  Critics say this is unsustainable, but AARP believes it is much more costly to refuse expansion.  

Here's why. The ACA provides that the government will pay 100 percent of the cost of expansion for the first three years, and phase down to 90 percent thereafter. What does this mean for Utah?  According to the Utah Office of the Legislative Fiscal Analyst, over the first 8 fiscal years the Medicaid expansion will provide over $4.5 billion in economic activity for the minimal investment of $109 million from state funds over that same time period. 

Beyond the economic savings, people with health care coverage have far better outcomes at lower cost than waiting to go to the emergency room for expensive care. Using the emergency room as a primary care center is not only inefficient and ineffective, it also burdens hospitals with absorbing costs that may not be compensated. Covering patients who can receive preventive, coordinated care is not only more humanitarian, but helps hospitals recoup costs lost to charity care.  States that opt-out of expansion will have to decide if these costs can be absorbed by the state budget or left to hospitals, possibly hurting their ratings as revenues fall.

There are other consequences to the state as well. According to Jackson Hewitt Tax Service, states that do not expand Medicaid leave employers in the state exposed to higher "shared responsibility" payments under the Affordable Care Act. They estimate it could cost employers in Utah between $15 and $23 million every year because employers will have to pay a penalty if employees require a subsidy to receive health care coverage under a health care exchange.

Although there was an attempt to prohibit our state from moving forward with the Medicaid expansion during this legislative session, we applaud our legislature for amending this bill to remove the prohibition and instead outlining a thoughtful, deliberative approach to determine what is in the best interest of our state. As the executive and legislative branches continue to study the Medicaid expansion this summer, we are confident that they will find it will not only promote good health in our state, but will also provide great economic benefit.

AARP Utah will be working with legislators throughout the interim session to find a solution that works for our state. We urge the public to stay involved as well. Information about the interim session and Medicaid deliberations can be found at www.le.utah.gov.  

Ormsby is state director of AARP Utah.

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