HHS OKs Utah Waiver Expanding Medicaid by Cutting Some Benefits

HHS Secretary Tommy Thompson on Saturday approved a waiver to allow Utah to extend Medicaid coverage to 25,000 uninsured residents while reducing benefits for existing beneficiaries, the Salt Lake Tribune reports. Thompson joined Utah Gov. Mike Leavitt (R) in Salt Lake City to announce the change, which represents the first time that HHS has approved a Medicaid expansion waiver that involves reduced coverage for some beneficiaries (Goodman, Salt Lake Tribune, 2/10). Under the waiver, Utah will be able to extend Medicaid coverage to uninsured adults with incomes up to 150% of the federal poverty level, or about $12,885 a year for an individual (Gehrke, AP/Newsday, 2/9). According to an HHS release, the newly eligible will pay a $50 enrollment fee and receive a benefits package that covers primary and preventive care services. The waiver also allows the state to provide full Medicaid coverage to about 150 "high-risk pregnant women" with income exceeding the state's eligibility limit; these women will not have to pay the enrollment fee or any cost-sharing (HHS release, 2/9). To cover the cost of the new enrollees, the state will reduce benefits for about 17,000 to 20,000 current beneficiaries. According to Stephen McDonald, spokesperson for the Utah Department of Health, the reductions will include a cap in the number of visits beneficiaries can make to physical therapists, chiropractors and psychiatrists; the elimination of transportation to doctor visits except in emergencies; and reductions in speech, vision and dental benefits (AP/Newsday, 2/9). However, children, the elderly, pregnant women and beneficiaries with disabilities will be exempted from any benefit reductions (HHS release, 2/9).

The waiver is the first of its kind to be announced since the Bush administration in August said it would allow states under the Health Insurance Flexibility Initiative to trim Medicaid coverage for optional beneficiaries in order to expand benefits to more people (California Healthline, 8/6/01). Thompson on Saturday touted the waiver as a product of the Bush administration's commitment to give states greater room to extend Medicaid coverage to a broader range of the uninsured. "Our goal is to give states like Utah the flexibility that they need to strengthen their Medicaid programs and extend health coverage to more American families. Through waiver demonstrations and plan amendment[s] like this one, states are expanding eligibility and improving access to quality care for residents who otherwise would not have health insurance," he said (HHS release, 2/9). In his Jan. 28 State of the State address, Leavitt called for extending coverage to more residents "with no additional state cost by changing our strategy to provide basic health care to many rather than unlimited care to a care to a few," adding, "It is the kind of common sense that will bring health care to tens of thousands of Utahns who need it and currently do not have it" (AP/Newsday, 2/9). But some advocates said that the new focus on broadening coverage while reducing benefits could threaten health care for the poor. Families USA Executive Director Ron Pollack said, "This proposal is like robbing Peter and Paul to pay Phil. The Utah waiver approved by the Bush administration will do considerably more harm than good for low-income families that need help to get health coverage" (Goodman, Salt Lake Tribune, 2/10).