Proposed Medicaid Expansion in Utah

In December 2014, Utah released more details for a proposal for a Section 1115 demonstration, Healthy Utah, to implement the Affordable Care Act’s (ACA) Medicaid expansion.  To be implemented, this proposal would need to be officially submitted to CMS (and subject to state and federal comment periods).  The proposal would also require approval by the Utah state legislature; however, in mid-December the Legislature’s Health Reform Task Force chose not to recommend the Governor’s plan to the full Legislature.  Instead, the Task Force proposed more limited coverage alternatives, but these proposals do not preclude the Governor’s plan from being approved by the legislature.¹

The demonstration would cover childless adults with incomes from 0-138% of the federal poverty level (FPL, up to $16,105 per year for an individual in 2014) and parents with incomes from 50-138% FPL ages 19 to 64 in Utah – an estimated 95,000 beneficiaries in FY 2016 and up to 140,000 in FY 2019.²  If implemented on January 1, 2016, the waiver would:

• Expand Medicaid coverage to newly eligible adults primarily by using Medicaid funds as premium assistance for Marketplace Qualified Health Plan (QHP) coverage.³ Newly eligible adults with access to employer-sponsored insurance (ESI) would receive premium assistance for ESI.
• Provide wrap-around coverage for Medicaid benefits not offered through QHPs, except Utah seeks a waiver of the federal requirement to provide non-emergency medical transportation in demonstration year one.
• Require monthly premiums up to 2% of income for newly eligible adults from 100-138% FPL. These beneficiaries could opt to participate in a pilot program that offers lower monthly premiums and a $50 copayment for non-emergent use of the emergency department (ED), which exceeds the $8 maximum copay allowable under federal law. Utah would seek § 1916(f) waiver authority for this copay pilot program.
• Require co-payments according to state plan amounts and consistent with federal law for all newly eligible beneficiaries.  Maximum cost-sharing, including premiums and copays, would remain capped at 5% of income.
• Create a healthy behavior incentive program that would offer referrals for smoking cessation services in demonstration year one. In year 2, the program would mirror the program already established for Utah state employees and offer unspecified incentives to beneficiaries who complete an annual health screening and whose screening indicates they are healthy or who improve in an area of concern.
• Allow parents covered through a Marketplace QHP or ESI to elect to have their Medicaid or CHIP eligible children covered in their same plan with the state providing cost-sharing, premium, and benefits wrap-around coverage through Medicaid/CHIP.

While the proposal notes that two-thirds of adults in the expansion group are employed and many of the remaining one-third are medically frail and not able to work, the proposal includes a provision to automatically enroll able-bodied adults in a concurrent work program when newly eligible beneficiaries apply for Medicaid. The work program would include an online assessment and access to training opportunities and job postings. Utah is exploring possible sanctions related to benefits available under other state programs for non-compliance with the work program but is not proposing that work program participation be a condition of Medicaid eligibility and is not seeking federal waiver authority for the work program.

Utah also proposes covering newly eligible beneficiaries from July through December 2015, through its existing Medicaid program. Beneficiaries would then transition to waiver coverage as of January 2016.

CMS has approved Medicaid expansion waivers in four other states (Arkansas, Iowa, Michigan and Pennsylvania).⁴  Some provisions in these other waivers are similar to several of Utah’s proposals.  Specifically, CMS has approved:

• using Medicaid as premium assistance and requiring newly eligible beneficiaries to enroll Marketplace QHPs in Arkansas and Iowa;
• requiring premiums equal to 2% of income in Michigan and Pennsylvania and $10 per month in Iowa for beneficiaries above 100 to 138% FPL, similar to what those beneficiaries would pay for Marketplace coverage;
• offering healthy behavior incentive programs (with protocols subject to CMS approval) in Iowa, Michigan, and Pennsylvania, that enable beneficiaries to reduce premiums or copays by completing specified activities;
• waiving, on a limited basis, the requirement to provide non-emergency medical transportation (NEMT). Iowa’s NEMT waiver is limited to year one, after which CMS is to evaluate the impact on beneficiary access to care.  Pennsylvania’s NEMT waiver is limited to year one, after which the state must begin providing this service to newly eligible adults.

CMS did not approve waiver authority relating to the work program proposed by Pennsylvania.  Indiana and New Hampshire have waiver applications pending with CMS.  Arkansas, Iowa and Arizona (states that are currently implementing waiver programs) have waiver amendments pending.  Table 1 describes the major elements of Utah’s proposed Section 1115 demonstration.