Moved fast to shrink voter-approved Medicaid expansion

Utah officials moved fast to shrink voter-approved Medicaid expansion, documents show

By RACHANA PRADHAN

Utah officials pressed the Trump administration to approve a limited expansion of Medicaid just days after voters in the state last November supported a ballot measure calling for a broader expansion under Obamacare, according to correspondence obtained by POLITICO.

Emails and text messages obtained through a Utah public records request indicate that state and federal officials, in the immediate aftermath of the successful ballot measure, were privately discussing a slimmed-down Medicaid plan. They talked about covering fewer people than the Obamacare expansion, while implementing unprecedented curbs on the safety-net health care program.

Instead of adopting full Medicaid expansion insuring about 150,000 low-income adults, Utah Republicans earlier this month passed legislation covering about 90,000 people while asking the Trump administration to approve billions of dollars in enhanced funding under Obamacare. Utah is also asking the administration’s permission for significant new restraints on the program — including enrollment caps in case of cost overruns and per-person limits on spending — that the federal government has never before approved.

Obamacare required states to expand Medicaid to adults earning up to 138 percent of the federal poverty line — about $17,200 for an individual — to receive more generous funding from the federal government. The Obama and Trump administrations have not allowed states to do more limited Medicaid expansions while still receiving full Obamacare funding, but Republican lawmakers in Utah have insisted for weeks that Trump officials provided assurances they would back the plan.

State officials first formally asked the Trump administration to approve a so-called partial expansion last summer — months before 53 percent of Utah voters approved the Medicaid expansion ballot initiative — but the state never received an answer. Utah Medicaid Director Nathan Checketts told POLITICO that officials at the federal Centers for Medicare and Medicaid Services suggested they would revisit the state's request after last November's election.

The documents obtained by POLITICO show that the state, shortly after the election, ramped up pressure on the Trump administration to decide whether to allow partial expansions. These discussions occurred weeks before Utah Republicans introduced their legislation shrinking the voter-approved expansion, angering supporters of the ballot initiative.

Checketts and top Trump health officials, including then-Medicaid head Mary Mayhew and CMS senior counselor Calder Lynch, were in frequent contact during the following weeks.

“We know the state's request would be something new for CMS and represents a significant policy decision. Therefore, we understand why CMS has taken time to review and consider the state's request,” Checketts wrote to senior agency officials on Nov. 20, shortly after they had discussed the proposal during a conference in Washington, D.C.

“Even if CMS is not able to approve this request, our policy makers will benefit from knowing which options are (or are not) likely to be approved,” Checketts continued.

Ten days later on Nov. 30, Checketts wrote to Mayhew and Lynch that the governor’s office was "reemphasizing our state's interest in getting a response” on its partial expansion request. About two weeks later, in mid-December, CMS Administrator Seema Verma spoke with Utah Gov. Gary Herbert about the plan, according to the emails.

The emails from federal Medicaid officials never said whether they would approve the Utah plan.

“We haven’t had any promises," Checketts said Thursday. “We’re optimistic about the chances."

On Dec. 26, Checketts wrote to Lynch that he would be meeting with “key legislators” the following day to discuss expansion options. A text message between the two on Dec. 27 also mentions “new flexibilities being offered" to design the state's Medicaid program.

“When they sort of open the door and say we’re going to be more flexible, as a state we’re trying to figure out, well, what exactly does that mean?” Checketts said.

States have long pushed the federal government for greater leeway to tailor their Medicaid programs, which they jointly run with the federal government. The Trump administration, however, is encouraging new flexibility that would let red states reshape the entitlement in ways that Democrats say undermine the coverage program and may be illegal.

The administration has approved Medicaid work requirements in several states, though they’re being challenged in court. The administration is also readying a plan that would allow states to seek Medicaid block grants to rein in spending, a long-standing conservative goal.

A spokesperson for CMS declined to comment on Utah's pending request but said its conversations with the state weren't unusual.

"Medicaid is based on a collaborative federal/state partnership, given that, it should come as no surprise that CMS speaks with states all the time, including Utah, about a variety of issues regarding their programs," the agency spokesperson said.

Obamacare supporters said that Utah officials are ignoring voters by pursuing a partial Medicaid expansion. Further, they say state officials are making a risky bet that the Trump administration will approve such a plan for the first time — and could be inviting litigation if it does.

Nate Crippes, an attorney at the Disability Law Center, said the state's proposal to cap funding is especially troubling.

"I would be very, very surprised if that wasn't challenged," he said.

The Trump administration will review the Utah plan in the coming months. Key state lawmakers said Trump health officials have signaled their support.

“They are telling us ... this is going to happen,” said state Rep. Jim Dunnigan, who sponsored the scaled-back Medicaid plan in the Utah House, earlier this month.

While the Utah plan undergoes federal review, the state will expand coverage on April 1 to people below the poverty line, initially without the enhanced Obamacare funding. That move will cost the state tens of millions of dollars more than the full Obamacare expansion would have. Poor adults earning above the poverty line, who would otherwise be enrolled in Medicaid expansion, will remain eligible to receive generous Obamacare subsidies to purchase private coverage.

If the Trump administration refuses the state's plan, the Utah law includes a trigger that would automatically adopt the full Obamacare expansion. At the same time, the state would ask the Trump administration for permission to add requirements for some people to work to maintain coverage.