Herbert rejects Medicaid expansion

Friday , March 28, 2014 - 12:28 PM

Michelle L. Price, The Associated Press

SALT LAKE CITY —Utah'sRepublican governor announced Thursday he wants to reject a full Medicaid expansion that would enroll more people in the government program, and instead, seek federal dollars to cover the poor in private plans.

Gov. Gary Herbert's decision came after months of pushing back an announcement, making him one of the last governors in the country to announce his intentions about expanding Medicaid.

Herbert, like many Republican governors, is opposed to President Barack Obama's signature health law but has said the state has an obligation to help the poor.

"If the federal government will just block grant us the money, take away the strings and give us maximum flexibility, we will find innovative ways to do things better," Herbert said.

About 60,000Utahresidents are not currently covered by Medicaid or eligible for federal subsidies to pay for private insurance.

"This flaw, this hole, is not of our own doing," Herbert said. "But I do believe we have a moral obligation to ensure that the poorest Utahns can obtain good, quality health care."

His plan would set up a three-year pilot program to use about $250 million thatUtahwould have received to essentially cover all those who would fall under a full expansion. The grant money would instead help them purchase health insurance in the private market.

All participants would have to pay co-payments. Those with slightly higher incomes would pay up to 2 percent of their monthly incomes to help pay their insurance premiums.

"That's much better than having to do it a one-size-fits-all way out of Washington, D.C," Herbert said.

It would cover those 60,000 falling through the gap, and then some, helping about 111,000 people.

The block-grant path is relatively unique but shares similarities with plans in other states, such as Arkansas and Iowa, which have received federal approval.

Utah, too, would have to receive such a waiver from the federal government.

Mike Fierberg, a regional spokesman for the Centers for Medicare and Medicaid Services, said in a statement Thursday that the agency will considerUtah'srequest if it's written and presented.

"We can have no comment on the existing proposals, since nothing is final, and as such any comment would be speculative," he said.

Under the federal health care law, states have the option of expanding eligibility for Medicaid, the state-federal program for low-income people.

If states expand the program to include people making up to 138 percent of the federal poverty level, the federal government has offered to pick up the full cost through 2016. After that, reimbursement levels will gradually fall to 90 by 2020.

Like other Republican governors, Herbert has resisted embracing full expansion, citing fears that the federal government may fail to keep its part of the agreement down the road.

Overall, 25 states and Washington, D.C., are expanding their Medicaid programs, while 19 others have opted not to expand. Decisions are pending in other states.

Herbert said his plan "in many ways mirrors the Medicaid expansion" but emphasized that it is not Medicaid expansion.

Beyond federal approval, Herbert also needs to secure the support ofUtah'sRepublican-controlled Legislature, which has less than two weeks left in its 2014 session.

In states like Arkansas and Arizona, plans to expand Medicaid have been hung up as Republican governors wrestled to get GOP-controlled Legislatures to agree to fund the plans.

InUtah, the governor has said he wants to bring the Legislature on board with a decision.

His administration has been holding closed-door talks with lawmakers to find middle ground on the issue.

Herbert's toughest battle is expected to be with fellow Republicans in the House, including House Speaker Becky Lockhart, who is widely considered to be weighing a bid to challenge Herbert for the governor's office in 2016.

Lockhart, R-Provo, and Republicans in her chamber announced their own Medicaid plan last week. It rejects more than $500 million from the federal government, instead spending $30 million to $35 million in state money to cover the neediest of people living below the poverty line.

It's unclear how many of the 60,000 would be covered under the two-year plan, which prioritizes parents and the medically frail.

Lockhart has said that legislators could then take advantage of more flexibility available under the health law in 2017.

Herbert has called the plan illogical, and reiterated Wednesday thatUtahresidents send their tax dollars to Washington, D.C., so they deserve to have them spend back in their state.

In the Senate, Republicans have discussed several options but have not coalesced around a single plan.

Democrats, who are in the minority atUtah'sCapitol, have pushed for full expansion, saying it makes the most sense morally and financially.

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