The national Affordable Care Act (ACA) passed by Congress in 2010 was originally designed to extend health care coverage to all Americans.
Although most people receive health insurance through their employment, many employers do not offer health care coverage. Other people who are self-employed or unemployed cannot afford the cost of purchasing health insurance. These uninsured people often neglect regular health care and, when they do become sick, face catastrophic costs that drive them into bankruptcy.
The rest of society also pays large amounts for the uninsured, because whenever patients are unable to pay, hospitals and doctors must charge paying customers (and their insurance companies) higher rates to make up for the losses.
The inefficiencies and inequities of this situation led Congress to pass the ACA in 2010.
The law requires individuals to purchase health insurance and requires large employers to offer insurance to employees. The law also makes health insurance policies available to employees at small firms and the self-employed through private insurance exchanges where these individuals can purchase coverage.
To defray the costs of purchasing insurance, the law grants tax subsidies to middle-class people on a sliding scale based on income.
The ACA was intended to provide health care for the lowest-income Americans through an expansion of the existing Medicaid program.
Medicaid is a federal-state partnership that has historically covered only very low-income families with children, the disabled and the elderly.
Medicaid patients receive care through participating providers, paid for by the government. The federal government pays 70 percent and state government 30 percent of medical bills under traditional Medicaid.
The ACA was written to expand Medicaid to cover poor adults with no children and a greater portion of poor adults with children.
For this expansion population, the law requires the federal government to pay 100 percent of medical costs for the first three years. After three years, the federal government will pay 90 percent of the costs for the expansion population and the states will pay 10 percent.
In 2012, the U.S. Supreme Court ruled that the federal government could not force states to expand Medicaid in this fashion. Medicaid expansion therefore became optional for each state.
Roughly half of the states have since opted for full Medicaid expansion as envisioned by the ACA.
Utah government leaders have proceeded cautiously in deciding whether to expand Medicaid. The main concerns have been the potential long-term costs to the state and the effect of Medicaid expansion on existing private insurers and providers.
After more than a year of study, Utah Governor Gary Herbert proposed a plan for using federal Medicaid dollars to provide private insurance to the low-income adults in the potential Medicaid expansion population.
The Healthy Utah plan would enroll these new low-income people in private insurance coverage instead of placing them in the traditional government-run Medicaid plan.
According to Governor Herbert, the main benefit of using this approach is that patients and providers will be subject to private market supply and demand and incentives, which should produce better and more efficient care than traditional Medicaid.
The biggest argument for doing something like the Healthy Utah plan in Utah is that citizens of our state are now paying more than $250 million in taxes to the federal government under the ACA, without receiving any of that money back through Medicaid expansion benefits.
Furthermore, approximately 100,000 of the poorest Utahns continue to go without any health insurance coverage. These people still receive care when their health needs become critical, but they do so at emergency rooms and hospitals where costs are extremely high.
All other Utahns then pay for these increased costs through our medical and insurance rates.
opting for some version of expansion such as Healthy Utah, our state would receive approximately $50 million per year in federal funds to pay for medical care for the poor.
In addition, the cost savings from more effective regular and early treatment by standard providers (rather than emergency rooms) is expected to total another $50 million.
Governor Herbert is in the final stages of receiving federal approval for the Healthy Utah alternative to Medicaid expansion. Some features of his proposal include increased copays and a requirement that the able-bodied be employed, both of which must be approved by federal regulators.
All details are expected to be worked out by mid-September, after which Governor Herbert hopes to call the Utah Legislature into special session to approve the plan.
Utah legislative leaders have expressed concerns about the Healthy Utah plan due primarily to its unproven cost projections.
But Governor Herbert has proposed limiting the plan to a three-year pilot program for starters, after which the state could revaluate and pull back if the costs outweigh the benefits.
I support holding a special legislative session as soon as possible to consider the governor’s proposal.
Utah is currently missing out on the economic benefits the plan offers while paying out millions in taxes to the federal government. Most importantly, thousands of low-income Utahns still have no practical way to get health insurance coverage.
I believe the Healthy Utah plan deserves serious and timely consideration by the Utah Legislature.