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Debate over Expanding Medicaid Heats Up in Utah, Montana

By Rebecca Adams, CQ Roll Call

February 19, 2015 -- The debate over expanding Medicaid is moving forward in such states as Utah and Montana while stalling at least temporarily in North Carolina after the Republican governor there said he wants to wait until a Supreme Court ruling on federally subsidized private health insurance this summer.

Even in states that are not weighing Medicaid expansion, the health care program for the poor is under examination, in large part because it is one of the largest components of state budgets. In Illinois, GOP Gov. Bruce Rauner is proposing cuts of almost $1.5 billion to Medicaid.

The discussion over expanding eligibility, as encouraged by the health care law, appears to be picking up the most momentum in Utah, where the state Senate is preparing for a floor vote as early as tomorrow. A top Senate Republican legislative aide said that the timing is unpredictable and a vote could come next week.

Supporters of GOP Gov. Gary Herbert's plan, which would expand Medicaid to anyone with income up to 138 percent of the federal poverty level, are vying with a much more limited option that would target assistance to people with income up to 100 percent of the poverty level and who are medically frail. The federal poverty level for 2015 is $11,770 for a single person.

The Utah state House, which is expected to take up the debate after the Senate acts, was scheduled to hold a closed-door meeting of Republicans last week to weigh options.

Herbert argues that his plan would cost the state $236 million and return $3.2 billion in federal matching grants. The narrower option for the medically frail would cost about $200 million and bring back an estimated $611 million in federal Medicaid dollars. One reason is that the health law commits the federal government to paying all of the costs of people who qualify under expanded eligibility rules through 2016. Support phases down after that until the federal government will pay 90 percent of costs for those people in 2020 and afterwards.

Backers of Herbert's plan, which is dubbed "Healthy Utah," feel confident that it would pass the Senate and are working to build support in the House.

In Montana, the expansion proposal by Democratic Gov. Steve Bullock is scheduled for a March 6 committee hearing. The state House is expected to be the first chamber to consider it on the floor after the hearing.

Bullock has failed in the past to convince legislators to approve expansion. 

As in Utah, some GOP legislators are arguing for coverage to a smaller group of people. The House Human Services Committee held a hearing last week on a bill that would cover about 10,000 Montana residents, compared to Bullock's plan to cover 70,000 people.

An aide to Bullock said that, assuming the bill gets a floor vote in each chamber, a majority of legislators in both chambers now support it and the governor believes it would pass.

"Montana has an opportunity to bring our tax dollars back to the state to expand coverage to 70,000 of our friends, family members and neighbors," Bullock said in a statement. "I've put forward a uniquely Montana plan that would take advantage of this opportunity, while throwing a lifeline to our small, rural hospitals. This is an issue that is too important to fall victim to partisan games."

In Montana—as in states such as Tennessee and Virginia, where Medicaid expansion failed in the legislature despite support from the governor—activists led by the Americans for Prosperity advocacy group have been pushing legislators to reject expansion.

Opposing the conservative group are health care providers such as hospital officials and physicians that want patients to have a way of paying their medical bills.

Americans for Prosperity (AFP) held three meetings recently in the state, although the reception from local residents was not enthusiastic in at least two of them. Video footage by the Great Falls Tribune at one of the meetings shows residents walking out after a Republican legislator who is weighing whether to support expansion was not allowed to speak. At another, a Republican legislator who is considering supporting expansion was permitted to talk and got cheers when he said he would not sign a pledge against expansion that AFP is asking legislators to endorse.

In North Carolina, Republican Gov. Pat McCrory, who told President Barack Obama in January that he is open to expanding Medicaid, said recently he would wait to endorse expansion until after the Supreme Court rules in a case this summer affecting federal subsidies for private insurance. The case involves the constitutionality of federal subsidies in some states for health insurance sold in the marketplace created by the health care law, not Medicaid.

"I will not make any recommendation as to whether or not we extend insurance for the uninsured until the court case because there are so many ramifications of the court case," McCrory said after a speech before the North Carolina Hospital Association, which supports expansion.

McCrory has been talking with Health and Human Services Secretary Sylvia Mathews Burwell about Medicaid expansion. North Carolina lawmakers had a front-row seat to the fast failure of an expansion in neighboring Tennessee, when Republican Gov. Bill Haslam was unable to convince the state legislature to approve an expansion plan.

"The court case has major ramifications on the entire health system–especially with the state exchange and federal exchange issue up in the air. I told Secretary Burwell that," said McCrory, according to his spokesman. "But at the same time, that doesn't mean I can't explore what is Indiana doing, what is Pennsylvania doing, what is Idaho doing, what's working, what's not working. I've always said I've got to fix the current Medicaid [and] help the women, children, disabled, and elderly that are currently served on Medicaid before we expanded."

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