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In Republican Utah, a Second Try at Medicaid Expansion

By Marissa Evans, CQ Roll Call

October 7, 2015 --Lawmakers in Utah may try this month to expand Medicaid coverage with a plan hammered out by Republican governor Gary R. Herbert and key Republican legislators, who have come to be known in the state as the Gang of Six.

Their so-called Utah Access Plan will be formally presented to the public Tuesday, but a bigger test comes a week later, on Oct. 13, when Herbert and the six lawmakers decide if the proposal has enough support to justify calling a special session of the legislature to get it passed this year.

The proposal is meant to be a legislative middle ground after the Republican-controlled Utah House and Senate couldn’t agree on plans to expand the joint federal-state health insurance program for low-income and elderly beneficiaries.  

During the 2015 legislative session, the Senate approved Herbert’s proposed Healthy Utah plan, which would have covered 146,000 people at a cost of $78 million in state funds and $648 million in federal matching money in 2021, when federal funding for expanded Medicaid programs falls from 100 percent to 90 percent. But the House voted to implement the less ambitious Utah Cares plan, which had an estimated $56 million price tag and would have covered 93,000 people. The two plans couldn’t be reconciled before the legislative session ended in March.  

The new Utah Access Plus proposal would cover 95,000 people and includes provisions common in other red state Medicaid expansion plans, such as requiring beneficiaries to share in the cost of coverage. It also proposes a raft of new taxes and fees on health care providers.

It’s a draft of a proposal that’s likely to see some changes, says one of the Gang of Six, Republican State Senate President Wayne L. Niederhauser.

“We’re not absolutely settled,” Niederhauser said before the presentation of the plan at a public meeting late Tuesday afternoon in Utah. “Where there is unfairness we’ll hear about it on Tuesday and make adjustments.” 

The new proposal would provide coverage for families of four making up to $33,465 per year, with certain limitations, including:

  • Anyone who qualifies for Medicaid would be required to enroll in employer-sponsored health coverage if it’s available, with the state subsidizing the cost. 
  • Those who can’t get employer insurance but are above the federal poverty line will receive a subsidy to purchase private health insurance and contribute up to 2 percent of their income toward premium payments.
  • Beneficiaries making below the poverty line who are ineligible for workplace insurance would have their premiums and co-pays covered by Medicaid. 

The biggest challenge to the plan comes not from the requirements placed on beneficiaries, but from the taxes and fees proposed for health care providers, according to Niederhauser.

In all, the proposal would impose $50 million in taxes on doctors, pharmaceutical companies, hospitals and other providers in the state.

In addition, doctors, surgeons, physician assistants and other medical professionals who fall into the physician group of the federal Centers for Medicare and Medicaid Services’ provider class would be charged $797 in licensing fees starting July 2016 to help pay for the expansion. Hospitals would be assessed $1,600. 

Michelle S. McOmber, CEO of the Utah Medical Association, which represents 4,600 physicians in the state, said that the organization does not like the new plan and that “there’s no rhyme or reason” to the licensing fees. 

“It isn’t even the amount of the tax, it’s the way they’re going about it that we don’t agree with,” McOmber said. “We don’t think the way to fund government services is to tax individual providers or licensed professionals.” 

McOmber said that more daunting is that the $797 is only an estimate of how much providers would have to pay based on enrollment numbers. That number could swell under the plan to $1,100 by 2021. 

She said she’s hoping the legislature will consider increasing sales tax, the tobacco tax or the e-cigarette tax instead to help fund the proposal. 

Matt Slonaker, executive director of Utah Health Policy Project, said that while his organization has been advocating for Medicaid expansion for the last three years, the financing aspect of the plan will be a hurdle.

“Whenever you try to tax industry, the industry is probably not going to like it. But we worry groups are going to have strong lobbies, and that will have a big impact on how the vote turns out,” Slonaker said.

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