Utah to potentially expand Medicaid

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Starting at the first of the year in 2014, Utah will have the opportunity to give about 190,000 uninsured, low-income Utahns access to affordable health care through an expansion of Medicaid.

In order to do this, Utah must decide to participate in the Affordable Care Act’s Medicaid expansion. If Utah decides to engage, virtually all of the costs of Medicaid would be paid by the federal government instead of by the state. Currently, the federal government pays 70 percent of Medicaid cost in Utah, with the state paying the remaining 30 percent. If Utah chooses to expand, the federal government would pay 100 percent of costs from 2014 to 2016. In 2022, the state would start paying 10 percent, with the federal government paying 90 percent, according to The Utah Health Policy Project.

If Utah chooses to accept the millions of dollars that would flow into the state from the federal government, there will be both immediate and long-term impacts. As these new dollars move through Utah’s economy, they generate rounds of spending. This concept of consecutive rounds of spending is called “the multiplier effect” by economists. This means the economic stimulus effect of new money entering a state exceeds the value of the dollars that come into the state.

The expansion would not only provide an opportunity for Utahns to get health coverage but would also stimulate the economy and provide jobs. The increased amount of federal funding is expected to increase economic activity in the state by $670 million in 2016. By that same time, the new income of federal dollars would support about 5,900 new jobs across Utah, which is a 0.32 increase of the current numbers of jobs in the state. Medicaid allows people to take responsibility for their health care.

Currently, there are 400,000 Utahns without insurance. According to a study by the Kaiser Commission on Medicaid and the Uninsured, the expansion of Medicaid would allow 189,000 families in the state to access quality health care by 2022.

“Under current law, Utah’s traditional Medicaid program covers many low-income children through Utah’s CHIP program, but it does not cover thousands of low-income, working parents and adults,” said Laura Nielson, Healthcare Policy and Collaborations Intern.

The decision lies in the hands of Utah’s political leaders. Gov. Gary Herbert has yet to make a decision about the expansion. Denying the opportunity to expand would deny Utah of $5 billion in federal tax dollars which would go to other states deciding to expand.

“In order to not miss out on full federal funding, Utah’s political leaders need to decide this year whether or not to expand. If they wait a year or more and then expand, they opted out of receiving millions of federal dollars. Many legislators feel expanding Medicaid in Utah is inevitable but keep saying that this is not the year to make a decision. This perception needs to change, otherwise Utah tax payers will lose out on the most generous phase of federally-funded expansion,” Nielson said.

Additional benefits of an expansion of the Medicaid program in Utah include:

  • A stronger health care system
  • An increase in state revenue
  • Healthier, more productive citizens
  • Saving Utah tax dollars spent on the uninsured
  • Reduced costs, the effects of which get passed on to consumers and businesses
  • Benefiting small businesses
  • Saving hospitals money
  • Protecting Utah workers from preventable illnesses
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