Trump administration rejects Utah request for partial Medicaid funding

The Trump administration will not allow Utah or any other state to use federal funding to partially expand Medicaid, dealing a blow to conservative states that envisioned a new way to take advantage of ObamaCare.

Earlier this year, Utah Gov. Gary Herbert (R) authorized a limited Medicaid expansion plan, defying voters who had approved a full expansion in November.

Utah officials said they had been in contact with Trump administration health officials, who encouraged them to submit a request for the federal government to pay 90 percent of the cost of expansion — a request that had never been approved previously by any administration.

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Under ObamaCare, the federal government pays for more than 90 percent of the cost of states that wish to expand Medicaid. Utah hoped to receive the same level of federal funding while covering only a fraction of the people. 

But on Saturday, the administration said Utah’s request — which had not yet been formally submitted — was rejected and that it would not approve any other such requests from states in the future.

“A number of states have asked [the Centers for Medicare and Medicaid Services] for permission to cover only a portion of the adult expansion group and still access the enhanced federal funding available through ObamaCare. Unfortunately, this would invite continued reliance on a broken and unsustainable ObamaCare system,” a spokesperson for the Centers for Medicare and Medicaid Services (CMS) said. 

“CMS will continue to only approve demonstrations that comply with the current policy,” the spokesperson said.

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The Washington Post first reported the rejection Friday night. 

The reasoning for rejecting a partial expansion is consistent with the administration’s current argument that the entire ObamaCare law is unconstitutional. 

The administration is siding with a group of 18 Republican attorneys general who are trying to overturn the law in federal court, maintaining that it is unconstitutional.

Oral arguments in the 5th Circuit Court of Appeals were earlier this month, and a decision is expected in the coming weeks.  

In a statement, Herbert said the state was disappointed in the administration’s decision but reassured residents that Medicaid eligibility was not changing. 

“While we are deeply disappointed by this latest development, we would like to reassure Utahns currently relying on Medicaid under the new expansion that they are still covered under the expansion that was activated on April 1, 2019,” Herbert, Utah Senate President Stuart Adams (R) and House Speaker Brad Wilson (R) said in a joint statement.

“We will continue to work closely with the Administration to ensure that Medicaid expansion is carried out in a way that provides coverage for Utahns in need without creating an unsustainable financial burden on Utah taxpayers,” they added.

The partial Medicaid expansion will provide coverage for up to 90,000 people. But the plan will cover far fewer people and cost more money than what voters approved in November.

The Utah expansion will provide Medicaid for people earning up to the poverty line rather than 138 percent of the poverty level as under ObamaCare. Anyone earning between 100 percent and 138 percent of the federal poverty level will have to purchase coverage on the federal exchange.

The voter-approved expansion would have covered 150,000 people and would have been paid for by an increase in the sales tax. Under the new law, about 48,000 fewer people will be covered, and it will cost $50 million more than full expansion, according to a state analysis.