FEBRUARY 12, 2014
www.UncoverObamaCare.org
Why “Doing Nothing” on
Medicaid Expansion Is
Utah’s Best Move
AUTHORED BY
Jonathan Ingram | Director of Research, FGA
Derek Monson | Director of Policy, Sutherland Institute
www. T h e FGA . org
This publication is a joint product of the Foundation for Government Accountability and the Sutherland
Institute. It appears as a report for the Foundation for Government Accountability’s Uncover
ObamaCare project, and as a Legislator Memo for the Sutherland Institute.
www.UncoverObamaCare.org
E X E C UT I V E S U MMARY
In January, Utah Governor Gary Herbert announced that “doing nothing is not an option” when it comes to
expanding Medicaid as permitted by the Patient Protection and Affordable Care Act. The two options under
consideration by Utah’s Health Reform Task Force are largely based on Arkansas’s Private Option, which is often
held up as a market-oriented alternative to ObamaCare.
Utah legislators should be cautious. Any proposal based on Arkansas’s flawed Private Option is simply Medicaid
expansion by another name. This report examines both proposals under consideration by the Health Reform Task
Force and finds:
• U TAH’S MEDICA ID EXPANSIO N P LAN S H U RT TH E M O S T VU LN E RAB LE
Medicaid expansion would redirect limited funding away from the elderly, children and disabled individuals
in order to fund Medicaid coverage for working-age, able-bodied adults.
• U TAH’S MEDICA ID EXPANSIO N P LAN S WI LL B E E XP E N S I VE AN D U N P RE D IC T A BL E
Enrollees in an Arkansas-style Medicaid expansion can pick any Silver-level exchange plan at no cost to
them. Costs will be wildly unpredictable, as the difference between the cheapest Silver plans and the most
expensive Silver plans reaches nearly 57 percent in some regions of the state.
• U TAH’S MEDICA ID EXPANSIO N C RO WDS O U T P RI VATE I N S U RAN C E
According to a report commissioned by the Utah Department of Health, roughly 75 percent of potential
enrollees in Utah’s Medicaid expansion are expected to drop their private coverage or forgo existing federal
exchange subsidies to go on Medicaid.
• U TAH’S MEDICA ID EXPANSIO N D O E S N O T P RO M O TE P E RS O N AL RE S PO N SIBIL IT Y
Unlike those with private insurance, enrollees have virtually no “skin in the game” when it comes to
contributing to the cost of their own health care. Under an Arkansas-style Medicaid expansion, taxpayers
foot the bill for all premiums and deductibles, and most copays and other cost-sharing.
Medicaid is failing patients and taxpayers, and the options under consideration by Utah’s Health Reform Task Force
will only make a bad problem worse. Utah should look for other ways to help underserved communities without
further reliance on federal funding.
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O V ERV I E W
Under the Patient Protection and Affordable Care Act, known as ObamaCare, Utah policymakers may choose to
expand Medicaid eligibility to cover all individuals earning up to 138 percent of the federal poverty level.1 Although
Utah is permitted to expand Medicaid eligibility in this way, the U.S. Supreme Court ruled in June 2012 that the state
is under no obligation to do so and no deadline exists to express interest.2-3
Across the country, half of the states have rejected this Medicaid expansion of ObamaCare.4 Some states, fearing
pushback from expanding a government-run system already on the brink of collapse, have proposed “alternative”
ways to expand Medicaid. But these “alternatives” are simply Medicaid expansion by another name.
Arkansas is perhaps the highest-profile case of Medicaid expansion through one of these so-called alternatives.
Rather than expand Medicaid through the traditional fee-for-service system, Arkansas lawmakers approved an
expansion of Medicaid eligibility through what they call the Private Option. Under Arkansas’ Private Option, the
expansion population receives Medicaid benefits through plans offered on the ObamaCare health insurance
exchange.
In January 2014, Utah Governor Gary Herbert hinted his support to implement ObamaCare’s Medicaid expansion
through an Arkansas-style model.5 While some Utah officials have proposed adopting a similar plan, lawmakers
should be wary. Many of the promises made by lawmakers to secure support for this new type of Medicaid expansion
have failed to materialize in Arkansas and are unlikely to occur in Utah or elsewhere.
In fact, these empty promises have led Arkansas lawmakers to re-evaluate whether to even fund the Private Option.
The bill has been controversial from its inception. When the plan was conceived in 2013, it initially failed to receive
enough support for appropriation.6 The appropriation eventually passed by a narrow margin, with just one vote to
spare in the Arkansas Senate.7 Since then, one Private Option supporter has been replaced by a staunch opponent
in a landslide special election in which the biggest campaign theme was the Private Option Medicaid expansion.8
And one of the deciding votes for the Private Option last year has since announced that she has revered her
position and will oppose funding for the program going forward.9
With these two developments, Private Option supporters must now recruit those who were previously opposed to
the plan to now support it. Given the fact that many of the other lawmakers who supported the plan last year are
also unsure how they will vote or are leaning against funding it, the Private Option’s long-term future is certainly in
doubt.10 As one Private Option supporter explained, the Private Option is “at best on life support,” and possibly
even dead on arrival.11
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UT A H ’ S P RO P OS E D ME D ICAID E XPANSION PLANS
The two options under consideration by Utah’s Health Reform Task Force are largely based upon Arkansas’s Private
Option.12 Under the first option, the state would expand Medicaid eligibility to able-bodied adults earning less than
100 percent of the federal poverty level.13 Under the second option, the state would expand Medicaid eligibility to
all able-bodied adults earning less than 138 percent of the federal poverty level.14
Both plans would have most Medicaid benefits delivered to this new expansion group through Qualified Health
Plans (QHPs) offered on the federal health insurance exchange.15 Under these proposals, able-bodied adults would
be able to select any Silver-level QHP offered on the exchange. The Medicaid program would pay the full cost of
premiums for these plans, as well as the cost-sharing and out-of-pocket costs owed by enrollees. Enrollees in Utah’s
proposal would receive all Medicaid benefits, with traditional fee-for-service Medicaid coverage for benefits not
covered by the QHPs.
UT A H ’ S M E D ICAID E XP AN S ION PLANS HURT THE MOST VULNERABLE
Utah’s Medicaid expansion plans put the state’s truly needy citizens at great risk. It is important to remember
who would actually qualify for Utah’s Medicaid expansion. The Medicaid expansion does not cover the elderly,
individuals with disabilities or even poor children–groups considered among the most vulnerable.16 Instead, Utah’s
plan simply expands Medicaid eligibility to a new class of able-bodied, working-age adults.17
Up to 85 percent of these able-bodied adults have no dependent children.18-19 Able-bodied childless adults
have never been considered among the most vulnerable citizens, which explains why they have historically been
ineligible for other types of taxpayer-funded welfare, including cash assistance and long-term food stamps.20-21 It
is no surprise, then, that the majority of Americans oppose giving non-cash assistance, such as food stamps and
Medicaid benefits, to able-bodied, working-age adults, especially those without children.22
Although Utah used Medicaid savings to help pay for some primary care services for a limited number of adults
without dependent children in the past, ObamaCare’s optional Medicaid expansion would create an entirely new
population in Utah eligible for all Medicaid benefits.23
ObamaCare’s Medicaid expansion would redirect limited state and federal resources away from the elderly, from
children and from disabled individuals in order to fund Medicaid coverage for working-age, able-bodied childless
adults. Worse yet, because the exchange’s QHPs reimburse doctors and hospitals at higher rates than Utah’s
traditional Medicaid program, providers will have large financial incentives to treat the new working-age adults
comprising the Medicaid expansion, rather than the most vulnerable already enrolled in Medicaid.
This will ultimately create a two-tiered system of care, where able-bodied adults are prioritized over the truly
needy. This is particularly worrisome, given the fact that all but one county in Utah has a shortage of primary care
providers.24 Simply adding 100,000 to 150,000 or more individuals to the Medicaid program will inevitably make
access problems even worse for those on traditional Medicaid, as it greatly increases demand while doing nothing
to increase the supply of providers.25-26 But Utah’s proposals go much further by creating perverse incentives for
providers to push the truly needy to the end of the line.
UT A H ’ S M E D ICAID E XP AN S ION PLANS ARE EXPENSIVE AND UNPREDICTA B L E
Utah’s Medicaid expansion is also likely to prove more expensive and create budget instability in the coming years.
Unlike Medicaid managed care reforms that Utah has begun, the state does not set multi-year contracts with
capitated rates through a competitive bidding process. Instead, an Arkansas-style Medicaid expansion will require
Utah to pay enrollees’ premiums and additional subsidies to insurers to cover deductibles, coinsurance, copayments
and other out-of-pocket costs. The state has no negotiating leverage with the plans and no predictability of future
premium increases.
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Delivering Medicaid benefits through QHPs is also certain to prove more expensive than even a traditional
ObamaCare Medicaid expansion. This is largely because QHPs pay higher reimbursement rates than Medicaid, but
cannot impose the type of cost-sharing that private insurers have historically used to encourage more appropriate
utilization. Utah must also provide all regular Medicaid benefits to the expansion group, so the state will not be able
to control or reduce costs by providing more limited benefit packages.
The Congressional Budget Office has previously estimated that QHPs will cost roughly 50 percent more than
traditional Medicaid.27 Even in Arkansas, which has led the charge to expand Medicaid in this way, policymakers
admit that the plan is a more expensive way to expand Medicaid and were only able to achieve budget neutrality
through faulty assumptions and budget gimmicks.28
This cost difference is likely to be even higher than expected in Utah, given that cost sharing is lower than allowed
on the exchange and that enrollees in the Medicaid expansion can pick the most expensive plans available at no
additional cost. The difference in costs between the cheapest Silver plans and most expensive Silver plans range
upwards of 57 percent in some regions.29 Enrollees in the Medicaid expansion are likely to pick the most expensive
plans, which typically have broader provider networks and drug formularies, because they have no financial incentive
to do otherwise. For example, the cheapest plan available to someone in Salt Lake City only has three hospitals in
its network within a 20 mile radius, while the most expensive plan has eight hospitals in its network within that same
distance.30
Premiums vary widely by plan choice in the Utah’s health insurance exchange
Lowest and highest annual premium for a 34-year-old, by rating area
Statewide average
$3,124
$2,213
Rating Area 1
$2,503
Rating Area 2
$2,331
Rating Area 3
$3,151
$3,056
$1,948
Rating Area 4
$2,478
Rating Area 5
$2,537
Rating Area 6
$2,537
Highest cost
$3,139
$3,151
$3,226
$3,335
Lowest cost
Source: U.S. Department of Health and Human Services
Expanding Medicaid to able-bodied childless adults has created budget uncertainty in other states, even when
using tools like capitation to create more predictability.31 Given the design of Utah’s proposed Medicaid expansion,
lawmakers should expect the proposal to create even more unpredictability. At a time when policymakers are
concerned with rebuilding Utah’s cash reserves and paying down existing state debt, creating a new entitlement for
able-bodied adults is a significant risk when there is no reliable way to project how much the expansion will actually
cost.
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UT A H ’ S M E D ICAID E XP AN S ION PLANS CROWD OUT PRIVATE INSURANCE
While preliminary estimates predict that between 100,000 and 150,000 newly-eligible Utahns would enroll following
a Medicaid expansion, most of those individuals would not come from the pool of uninsured but rather would be
crowded out of the private insurance market.32-33 In fact, roughly three-quarters of the people expected to enroll
in Utah’s Medicaid expansion are expected to drop their private coverage or forgo existing federal exchange
subsidies to go on Medicaid.
According to a report commissioned by the Utah Department of Health, up to 26,000 of those in poverty expected
to enroll will come from the ranks of the privately insured.34-35 Another 75,000 would be eligible for federal subsidies
to purchase private insurance through the health insurance exchange, but lose those subsidies if Utah expands
Medicaid.36
The Medicaid expansion will crowd out private insurance
Characteristics of expected Medicaid expansion population
Privately Insured
(below 100% FPL)
Uninsured
(below 100% FPL)
30%
18%
51%
Exchange Eligible
(below 100% FPL)
Source: Public Consulting Group; Utah Department of Health
The crowd-out effect could actually be even worse than expected under Utah’s proposal. Estimates produced for
the Department of Health indicate that hundreds of thousands of Utahns currently with private insurance would be
eligible for Medicaid under the expansion.37 By making these individuals eligible to receive similar private plans
with much lower out-of-pocket costs and premiums, Utah should expect a much larger number of individuals to
shift from their current plans into the Medicaid expansion.
States that have previously expanded Medicaid eligibility have seen a huge number of individuals shift from private
insurance to Medicaid.38 It is no surprise that economists predict that the Medicaid expansion will merely “shift
workers and their families from private to public insurance” rather than reduce the number of individuals without
insurance.39
Ultimately, Utah policymakers are being asked to gamble that the federal government will keep its funding promise
to provide Medicaid for a group of able-bodied adults who will come not from the ranks of the uninsured, but from
the privately insured.
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UT A H ’ S M E D ICAID E XP AN S ION PLANS DO NOT PROMOTE PERSONAL
RE S P O NS I B ILITY
Many supporters of this Arkansas-style approach to Medicaid expansion hope it will promote personal responsibility
in a way that traditional Medicaid does not. Those hopes are misplaced.
Supporters of this Medicaid expansion model often want new enrollees to pay premiums, deductibles and copays
for their new Medicaid QHPs—just as they would in the private market. But the federal government has made clear
that Medicaid’s nominal cost-sharing rules must apply to these kinds of Medicaid expansions.40 This means that
cost-sharing cannot exceed 5 percent of income, deductibles must be waived and copayments must be of nominal
amounts.41 In fact, the cost-sharing allowed in the Medicaid expansion plans approved in both Arkansas and Iowa
have stricter cost-sharing limitations than even traditional Medicaid.42-43
Additionally, the group of able-bodied adults above the poverty line in Utah’s full expansion proposal will have less
skin in the game than if the state does not expand Medicaid. If Utah does not expand Medicaid, a 34-year-old nonsmoking individual right above the poverty line would pay just $230 per year in premiums for the second-cheapest
Silver plan.44 If that individual picked some of the more expensive plans covered by the Medicaid expansion, he or
she would be responsible for up to $1,338 per year in premiums alone.45 But under the proposed Private Option
Medicaid expansion, those more expensive premiums would be covered free of charge to the individual, removing
the primary financial stake they would have in their health plan.
Similarly, if that same individual earned just under 138 percent of the federal poverty level and without Medicaid
expansion, he or she would pay $522 per year in premiums for the second-cheapest Silver plan.46 But if that individual
picked some of the more expensive plans, he or she would be responsible for up to $1,631 per year in premiums.47
With Medicaid expansion, on the other hand, those premiums are paid by taxpayer.
In addition to premiums, these individuals would be responsible for copayments, deductibles, coinsurance and
other out-of-pocket costs capped at $2,117 per year.48 So rather than promote personal responsibility, as some
expansion supporters may hope, Utah’s Medicaid expansion proposal is likely to reduce personal investment in
their health care decisions.
C O NC L U S I O N
Medicaid is already failing patients and taxpayers across the country. But Utah’s proposed Medicaid expansion
plan will only make these problems worse. The plan’s design will ultimately create a two-tiered system of care
that prioritizes able-bodied adults over the truly needy. Medicaid expansion will be expensive and unpredictable,
destroying the state’s ability to rebuild its cash reserves and pay down its existing debt. But despite massive new
spending, the primary result will be individuals crowded out of the private insurance market and into Medicaid,
reducing personal responsibility and cost-conscious behaviors.
Instead of creating a new entitlement for able-bodied adults, lawmakers should refocus their efforts on improving
the existing Medicaid program, building on Utah’s long and proud tradition of volunteerism by encouraging
authentic volunteer charity care in underserved Utah communities or finding another solution that does not require
further dependence on federal funding or subject Utah even more to federal rules and regulations. Medicaid was
intended to be an affordable health care safety net for the truly vulnerable. Utah policymakers should focus on
meeting this critical goal instead of undermining it with a short-sighted Medicaid expansion scheme.
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RE FE R E N C E S
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
8
States may expand Medicaid eligibility to provide medical assistance to all non-elderly individuals with incomes up to 138 percent of
the federal poverty level. See, e.g., 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII) (2013), http://www.gpo.gov/fdsys/pkg/USCODE-2010-title42/pdf/
USCODE-2010-title42-chap7-subchapXIX-sec1396a.pdf.
States are not required to expand Medicaid eligibility in order to continue participating in the Medicaid program. See, e.g., National
Federation of Independent Business v. Sebelius, 567 U.S. __ (2012), http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf.
Centers for Medicare and Medicaid, “July 13, 2012 letter to Gov. McDonnell,” U.S. Department of Health and Human Services (2012),
http://dl.dropboxusercontent.com/s/ud86s0z720mdlth/CMS_letter.pdf.
Centers for Medicare and Medicaid Services, “State Medicaid and CHIP income eligibility standards effective January 1, 2014,”
U.S. Department of Health and Human Services (2013), http://medicaid.gov/AffordableCareAct/Medicaid-Moving-Forward-2014/
Downloads/Medicaid-and-CHIP-Eligibility-Levels-Table.pdf.
Jennie Christensen, “Herbert hints at possible Medicaid expansion in Utah,” Cache Valley Daily (2013), http://www.cachevalleydaily.
com/politics/article_829dff76-8568-11e3-9e16-001a4bcf6878.html.
John Lyon, “Funding for Private Option fails in the House,” Arkansas News (2013), http://arkansasnews.com/sections/news/arkansas/
update-funding-private-option-fails-house.html.
Nicholas Horton, “Cooper wins, Private Option loses,” Arkansas Project (2014), http://www.thearkansasproject.com/cooper-winsprivate-option-loses.
Ibid.
Nicholas Horton, “Senator Irvin: I’m a no on the Private Option,” Arkansas Project (2014), http://www.thearkansasproject.com/senatorirvin-i-will-not-vote-for-private-option-appropriation.
David Ramsey, “The swing votes on the Arkansas Private Option reauthorization fight,” Arkansas Times (2014), http://www.arktimes.
com/arkansas/the-swing-votes-in-the-arkansas-private-option-reauthorization-fight/Content?oid=3192426.
Andrew DeMillo, “Analysis: Private Option supporters walk fine line,” Washington Times (2014), http://www.washingtontimes.com/
news/2014/jan/26/analysis-private-option-supporters-walk-fine-line.
Office of Legislative Research, “Expansion of health care coverage,” Utah State Legislature (2013), http://le.utah.gov/interim/2013/
pdf/00004342.pdf.
Ibid.
Ibid.
Ibid.
42 U.S.C. § 1396a(a)(10)(A)(i)(VIII) (2013), http://www.gpo.gov/fdsys/pkg/USCODE-2010-title42/pdf/USCODE-2010-title42-chap7subchapXIX-sec1396a.pdf.
Ibid.
The Urban Institute estimates that 85 percent of uninsured individuals eligible for coverage under the Medicaid expansion have no
dependent children, while 95 percent of uninsured individuals below the federal poverty line who are eligible for coverage under
the Medicaid expansion have no dependent children. See, e.g., Genevieve M. Kenney, “Opting in to the Medicaid expansion under
the ACA: Who are the uninsured adults who could gain health insurance coverage?” Urban Institute (2012), http://www.urban.org/
UploadedPDF/412630-opting-in-medicaid.pdf.
Estimates produced for the Department of Health project that 68 percent of Medicaid expansion enrollees will able adults without
dependent children. See, e.g., Public Consulting Group, “State of Utah Medicaid expansion assessment: Impact analysis 2014-2023,”
Utah Department of Health (2013), http://www.health.utah.gov/documents/PCGUtahMedicaidExpansionAnalysis.pdf.
Division of Employment Development, “Utah’s Temporary Assistance for Needy Families (TANF) state plan,” Utah Department of
Workforce Services (2012), http://jobs.utah.gov/edo/stateplans/tanfstateplanfy12.pdf.
Able-bodied adults without dependent children are generally eligible for food stamp benefits for only three months out of every three
year period without meeting specified work requirements. See, e.g., 7 C.F.R.§273.24 (2013), http://www.gpo.gov/fdsys/pkg/CFR-2013title7-vol4/pdf/CFR-2013-title7-vol4-sec273-24.pdf.
Kristina Cooke et al., “The undeserving poor,” Reuters (2012), http://graphics.thomsonreuters.com/12/12/Inequality-Indiana.pdf.
Roughly 9,000 childless adults per year receive limited primary care benefits provided through one of Utah’s Medicaid waivers.
Inpatient hospital care, specialty care, mental health services and other similar benefits are not covered under the waiver. See, e.g.,
Centers for Medicare and Medicaid Services, “Utah Primary Care Network (PCN) 1115 demonstration fact sheet,” U.S. Department
of Health and Human Services (2013), http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/
downloads/ut/ut-primary-care-network-fs.pdf
Health Resources and Services Administration, “Find shortage areas: HPSA by state and county,” U.S. Department of Health and
Human Services (2013), http://hpsafind. hrsa.gov/HPSaSearch.aspx.
Estimates produced for the Department of Health indicate that between 100,000 and 150,000 individuals would enroll in the Medicaid
expansion by 2023. See, e.g., Public Consulting Group, “State of Utah Medicaid expansion assessment: Impact analysis 2014-2023,”
Utah Department of Health (2013), http://www.health.utah.gov/documents/PCGUtahMedicaidExpansionAnalysis.pdf.
The legislature estimates that roughly 111,000 individuals would enroll through the Medicaid expansion. See, e.g., Office of Legislative
Research, “Expansion of health care coverage,” Utah State Legislature (2013), http://le.utah.gov/interim/2013/pdf/00004342.pdf
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27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
Jessica Banthin et al., “Estimates for the insurance coverage provisions of the Affordable Care Act updated for the recent Supreme
Court decision,” Congressional Budget Office (2012), http://www.cbo.gov/sites/default/files/cbofiles/attachments/43472-07-24-2012CoverageEstimates.pdf.
Jonathan Ingram, “The empty promises of Arkansas’ Medicaid Private Option,” Foundation for Government Accountability (2014),
http://uncoverobamacare.com/wp-content/uploads/2014/01/UO-The-Empty-Promises-of-Arkansas-Medicaid-Private-Option.pdf.
Author’s calculations based upon the cheapest and most expensive Silver QHPs in each region for non-smoking adults.
Author’s calculations based upon network listings provided by each Silver plan offered in Salt Lake County.
When Arizona expanded Medicaid to childless adults through managed care, it found the expansion cost four times what was
projected between 2002 and 2008. See, e.g., Jonathan Ingram, “Medicaid expansion: We already know how the story ends,”
Foundation for Government Accountability (2013), http://uncoverobamacare.com/wp-content/uploads/2013/10/Medicaid-ExpansionUncoverObamaCare.pdf.
Estimates produced for the Department of Health indicate that between 100,000 and 150,000 individuals would enroll in the Medicaid
expansion by 2023. See, e.g., Public Consulting Group, “State of Utah Medicaid expansion assessment: Impact analysis 2014-2023,”
Utah Department of Health (2013), http://www.health.utah.gov/documents/PCGUtahMedicaidExpansionAnalysis.pdf.
The legislature estimates that roughly 111,000 individuals would enroll through the Medicaid expansion. See, e.g., Office of Legislative
Research, “Expansion of health care coverage,” Utah State Legislature (2013), http://le.utah.gov/interim/2013/pdf/00004342.pdf
Public Consulting Group, “State of Utah Medicaid expansion assessment: Impact analysis 2014-2023,” Utah Department of Health
(2013), http://www.health.utah.gov/documents/PCGUtahMedicaidExpansionAnalysis.pdf.
According to the report, between 7,915 and 11,564 parents in poverty and between 10,204 and 14,908 childless adults in poverty could
be crowded out of private coverage by 2023 as a result of the Medicaid expansion.
According to the report, between 24,305 and 24,525 parents and between 50,533 and 50,991 childless adults expected to enroll in the
Medicaid expansion by 2023 will come from those above the federal poverty line, meaning that they will otherwise qualify for federal
subsidies in the exchange if Utah does not expand.
According to the report, there were 89,996 parents and 111,880 childless adults with private insurance below 138 percent of the federal
poverty level in 2012. See, e.g., ibid.
Jonathan Ingram, “Medicaid expansion: We already know how the story ends,” Foundation for Government Accountability (2013),
http://uncoverobamacare.com/wp-content/uploads/2013/10/Medicaid-Expansion-UncoverObamaCare.pdf.
Stephen D. Pizer et al., “The effect of health reform on public and private insurance in the long run,” Social Science Research Network
(2011), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1782210.
Centers for Medicare and Medicaid Services, “Medicaid and the Affordable Care Act: Premium assistance,” U.S. Department of Health
and Human Services (2013), http://dl.dropboxusercontent.com/s/y4bkvvy87up2qd0/Medicaid_FAQ_3-29-13.pdf.
42 C.F.R. § 447.54 (2013), http://www.gpo.gov/fdsys/pkg/CFR-2011-title42-vol4/pdf/CFR-2011-title42-vol4-sec447-54.pdf.
In Arkansas, individuals below 100 percent of the federal poverty level are responsible for absolutely no cost-sharing in 2014, while
cost-sharing for individuals above 100 percent of the federal poverty level is capped at $604 per year. See, e.g., Jonathan Ingram, “The
empty promises of Arkansas’ Medicaid Private Option,” Foundation for Government Accountability (2014), http://uncoverobamacare.
com/wp-content/uploads/2014/01/UO-The-Empty-Promises-of-Arkansas-Medicaid-Private-Option.pdf.
In Iowa, only individuals above the poverty line are enrolled in QHPs through the Medicaid expansion. Enrollees will pay $5 to $10
as a monthly contribution in lieu of copayments or other cost-sharing due at the point of service. Those monthly contributions are
waived in 2014 and can be waived in 2015 and beyond for receiving certain preventive care or by self-attesting to a financial hardship.
Enrollees may also be subject to a copayment for non-emergency use of emergency rooms, but that copayment is subject to
Medicaid’s nominal copayment rules. See, e.g., Centers for Medicare and Medicaid Services, “Special terms and conditions: 11-W00288/5,” U.S. Department of Health and Human Services (2013), http://www.medicaid.gov/Medicaid-CHIP-Program-Information/ByTopics/Waivers/1115/downloads/ia/ia-marketplace-choice-plan-ca.pdf.
Author’s calculations based upon an individual earning just above 100 percent of the federal poverty level. The applicable taxpayer
percentage is capped at roughly 2 percent of household income for the second-cheapest Silver plan.
Author’s calculations based upon an individual earning just above 100 percent of the federal poverty level. The applicable taxpayer
percentage is capped at roughly 2 percent of household income for the second-cheapest Silver plan, but the subsidy only equals the
difference between the applicable taxpayer percentage and the cost of the second-cheapest Silver plan. Individuals selecting more
expensive plans must make up the difference.
Author’s calculations based upon an individual earning just below 138 percent of the federal poverty level. The applicable taxpayer
percentage is capped at roughly 3.3 percent of household income for the second-cheapest Silver plan.
Author’s calculations based upon an individual earning just below 138 percent of the federal poverty level. The applicable taxpayer
percentage is capped at roughly 3.3 percent of household income for the second-cheapest Silver plan, but the subsidy only equals the
difference between the applicable taxpayer percentage and the cost of the second-cheapest Silver plan. Individuals selecting more
expensive plans must make up the difference.
Individuals between 100 percent and 150 percent of the federal poverty level qualify for cost-sharing reductions to bring Silver plans
up to an actuarial value of 94 percent, which lowers their deductible and total overall out-of-pocket costs. This means that, on average,
the plan will pay 94 percent of qualified medical expenses, although individuals may pay more or less than the average in a given year.
Out-of-pocket maximums for Silver plans with cost-sharing reductions for this group in Utah range from $500 per year to $2,500 per
year. The statute caps total out-of-pocket spending for this group at $2,117 per year. See, e.g., Bernadette Fernandez and Thomas
Gabe, “Health insurance premium credits in the Patient Protection and Affordable Care Act,” Congressional Research Service (2013),
http://dl.dropboxusercontent.com/s/bxcbpmv4gience9/R41137.pdf.
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Jonathan Ingram | Director of Research
239.244.8808 - office | [email protected]
Derek Monson | Director of Policy, Sutherland Institute
www.T heFGA.org