Battle on two fronts for Utah governor's Medicaid plan

Utah Gov. Gary Herbert has finally announced his plan for Medicaid, but he still faces a long road for it to become reality.

The first hurdle for the Republican governor will be convincing legislators, particularly those in his own party, that he's not seeking a full Medicaid expansion under the federal health law.

Herbert said Thursday that he's rejected an expansion that adds more low-income people to the government program. Instead, he wants federal dollars to help those people buy private plans.

"My plan to seek a block grant rather than simply expanding Medicaid will not only help us meet our moral responsibility to care for the poor among us, but it will in fact allow us to do it in a way that keeps the state in control and will help us work toward a healthy Utah," Herbert said.

But Republican leaders of both the House and the Senate have said that's essentially full expansion, which Utah's GOP legislators generally oppose.

Beyond getting legislators to sign on, Herbert needs a waiver from the federal government.

The plan, which appears to seek millions of federal dollars without federal strings attached, is something the government may be reluctant to approve.

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

Herbert's plan would set up a three-year pilot program that would use the money Utah would have received to essentially help the same population with private plans. The 111,000 people expected to be in the program would have to chip in with some costs.

Utah's Department of Health estimates the program would use $250 million in federal money the first year, and grow to about $280 million in the third year.

It's unclear what Herbert's block-grant plan would entail, though it shares similarities with other "private option" plans that federal officials have approved in Arkansas and other states.

"Anything that's radically different, probably not going to get through," Matt Salo, executive director of the National Association of Medicaid Directors, said Friday.

"I would say, without fear of contradiction, that the feasibility of a chunk of money with no strings is zero," Salo said. "Just flat-out zero."

Herbert's spokesman Marty Carpenter said Friday that the governor wants to bring legislators on board before submitting a detailed proposal to the federal government.

"The focus first and foremost is making sure that they understand the proposal, make sure they see the benefits of it, make sure they understand why he believes firmly that we can get this done," he said.

Carpenter said the goal is to find a solution before the Legislature adjourns, which is less than two weeks away.

It's unclear if that will happen or if legislators will be called into a special session to deal with the issue.

Other governors that have opted to expand Medicaid, either by adding more people to the program or seeking a private option, have been hung up in battles with Republican Legislatures.

Utah's GOP legislators are expressing skepticism about the proposal.

"As I'm looking at it, it appears to me to be full Obamacare expansion by another name," Becky Lockhart, a Republican from Provo and the speaker of the House, said late Thursday.

Senate President Wayne Niederhauser, R-Sandy, made similar comments Friday and noted that Republicans in his chamber made it clear this week they would not support that.

Herbert's plan mirrors "the ultimate intention of a full expansion," Carpenter said Friday, but reiterated earlier comments from the governor that the plan will not add people to that federal program.

Democrats, who would like to see full, traditional Medicaid expansion, appear most likely to support Herbert's plan.

Jim Dabakis, the Utah Democratic Party chair and a state senator from Salt Lake, said Thursday that Herbert's plan skewed closer to full expansion than he expected.

"His heart," Dabakis said, "is in the right place."



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