Medicaid Expansion in Utah Fails to Protect Utahns

Recently we wrote about some of the problems with Medicaid expansion and reasons why the Governor and legislature should not proceed with the Healthy Utah proposal. Simply put, the discussion over Utah Medicaid expansion under “Obamacare” ignores the fundamental policy question about whether Utah should be providing taxpayer-funded health insurance or health care for able-bodied, childless, working-age adults at all.

Historically, the state has never done so, and policy makers have made little effort to do so until now. Many agree that such a program falls well outside the traditional limits of government policy. Nothing has changed about the fundamentals of this debate.

The incentives, however, have changed; under Obamacare, the federal government has promised to the states that it will pick up all or part of the fiscal tab for such a policy—at least for a period of time. We warn that this is a false and empty promise—one that is predicated on burdening future generations with debt by expanding unsustainable deficit spending. It is a promise that leaves our children and grandchildren exposed to serious future fiscal problems. It is a promise that leaves existing needy patients exposed to doctor shortages. For these reasons, we join with others to call on the legislature to protect Utahns from the problems associated with Obamacare’s Medicaid expansion.

Open letter to the ‘Group of Six’

June 8, 2015

Governor Gary Herbert
Lt. Governor Spencer Cox
President Wayne Niederhauser
Speaker Greg Hughes
Senator Brian Shiozawa
Representative James Dunnigan

Group of Six,

We are writing to you on behalf of our members and supporters across Utah, in regard to your efforts to address the question of Medicaid expansion, a key part of President Obama’s healthcare-reform law.

While well-intentioned, Medicaid expansion will not protect Utahns from harmful consequences.

Utah is a remarkably charitable and caring state. Protecting our friends and neighbors who are the most in need when it comes to healthcare is a high priority. Medicaid expansion would add thousands of able-bodied, childless, working-age adults into a pool meant for impoverished families with children, the elderly, the disabled, and other vulnerable groups.

Current Medicaid enrollees already struggle with access to care because of Medicaid’s low doctor reimbursement rates. In a state that already has a shortage of primary care providers, adding thousands of new enrollees but no new doctors would only exacerbate this problem. Spending limited resources on able-bodied adults would not protect the vulnerable people waiting in line; it would further imperil them.

Medicaid expansion would not protect hard-working Utah taxpayers. According to multiple state projections, Medicaid expansion could cost Utahns hundreds of millions of dollars. Even more concerning, other states have demonstrated that cost projections are often woefully inaccurate. For example, expansion in Arizona cost more than four times the state’s projections. Illinois recently revised their projections of Obamacare’s Medicaid expansion costs to more than three times initial estimates.

These added costs mean that desperately needed funding for education would not be protected, creating pressure on lawmakers to raise taxes, cut education funding, or both. Utah’s business-friendly reputation and attractive tax climate would be put at risk by expanding Medicaid.

Supporters of Medicaid expansion cite the promise of federal dollars that eventually taper to a 90 percent federal match rate to pay for the new expansion population in perpetuity. As we all know, federal dollars come with strings attached and are being drawn from an already dry well. Utahns are smart and recognize that federal dollars come from their pockets just as readily as state funds do. Changing the tax collector from the Utah State Tax commission to the IRS would not make a difference – Utahns would still pay. Additionally, Medicaid is a primary driver of the nation’s $18 trillion debt, and members of both political parties have acknowledged that this unrealistically generous match rate will not last. When the match rate is cut, Utah taxpayers will be left on the hook for even greater costs.

Making our state more dependent on unreliable federal dollars would be irresponsible. The Congressional Research Service recently confirmed that not expanding Medicaid does not mean Utah tax dollars go elsewhere – it simply means the money is not spent (or rather, borrowed) at all, protecting the next generation from even more debt.

Utahns deserve to know what has happened under the Arkansas expansion plan – the plan that formed the basis for the original Healthy Utah proposal. The “private option” in Arkansas ran over-budget every single month of 2014. The state projected that only 215,000 people would ever enroll in the program, but today there are already over 250,000 enrollees, and that number is sure to continue to increase. Arkansans made very clear their view of the private option in November 2014 by electing dozens of new legislators who ran on a platform opposing Medicaid expansion.

Suggestions of work requirements, cost-sharing, and expanding the private market would certainly be welcome reforms, but they should not have to come at the price of expanding the eligibility for a taxpayer-funded program that provides poor health outcomes. In other words, if the cost of Medicaid reforms is a full-scale embrace of expanded Obamacare, then that cost is simply too high. Moreover, such reforms are likely to be severely limited by the White House in Utah’s application for a flexibility waiver leaving the state with a Washington solution instead of a Utah solution.

Instead of embracing Obamacare by expanding Medicaid, we urge you to find a way out from under Washington, D.C.’s thumb. We applaud your willingness to reconsider the prospect of Medicaid expansion and instead work to find common-sense Utah solutions. The healthcare needs of Utah are not the same as those of Georgia or Rhode Island. Unfortunately, the Obama administration refuses to acknowledge this and continues to insist on their Washington, D.C., solution with its one-size-fits all approach.

We appreciate your efforts to protect all Utahns from the harmful consequences Medicaid expansion would bring to our state.

Sincerely,

Libertas Institute
Sutherland Institute
Utah Chapter, Americans for Prosperity
Utah Eagle Forum