FAQ on HB437

Utah’s recently passed Medicaid bill (HB 437) did more than just extend coverage to 16,300 newly eligible Utahns. This article explains what’s inside the bill.

2016 marks the year that Utah moved from being a non-Medicaid expansion state to a partial Medicaid expansion state. Utah joins Wisconsin and Virginia in this category.

Because this is not a full Medicaid expansion, Utah is responsible for paying 30% of the costs ($31.2M in FY18) to run the program, while the federal government pays the remaining 70% ($72.8M in FY18). A hospital assessment and other saving mechanisms are built into this bill to help fund Utah’s share of the costs. Health care advocates will continue to push to have Utah join the 31 other states who have expanded Medicaid to all, not just to some of their low-income citizens.

[1] What does HB 437 do?

House Bill 437 (HB437) created by Rep. Jim Dunnigan (R-Taylorsville), and sponsored by Sen. Allen Christensen (R-Ogden) is an extension of Medicaid benefits to 16,300 low-income Utahns.

First, HB 437 creates new eligibility requirements for both parents with dependent children, and adults without dependent children (i.e. childless adults).

An estimated 3,800 parents with children will gain Medicaid coverage because the Department of Health (DOH) is authorized to raise the federal poverty level (FPL) criteria from about 40% FPL to 55% FPL. 

HB 437 Eligibility Categories by FPL

(See chart with Annual and Monthly income limits at right and download as pdf). 

Another 12,500 adults without children (i.e. childless adults) will gain 12-month continuous Medicaid coverage if they meet a series of eligibility requirements starting with an income of 0% FPL:

• Chronically homeless individual;
• If funding is available, an individual involved in the justice system through probation, parole, or court ordered treatment; and
• If funding is available, an individual in need of substance abuse treatment or mental health treatment.

For more details on who receives coverage under HB 437, and who is left in the Utah coverage gap, read Who’s Covered Under Utah’s Medicaid Extension? elsewhere in this newsletter.

The bill creates an option for geographic areas of the state to opt-in to a pilot program to integrate physical and behavioral health care services within Utah’s Accountable Care Organizations (ACOs), as well as authorizes a preferred drug list (PDL) for psychotropic drugs with an override for dispense as written. UHPP considers HB 437 a good first step, and certainly better than nothing at all.

[2] How did it pass?

The bill started in the House Business and Labor Committee where it passed out with a favorable recommendation (9-4-1) with the Democrats on that committee split. Then the bill moved to the House Floor for a vote, after a few amendments were made, where it passed with a favorable vote (55-17-3) with no Democrats supporting the bill on the floor. Next the bill moved to the Senate Health and Human Services committee where it passed out 5-1 on party lines to go to the Senate for a full floor vote where it passed 19-8-2 with no Democrats supporting the bill. Utah Democrats articulated their position on HB 437 in a press conference covered here.

[3] Who supported HB 437?

While HB437 didn’t garner the 70+ organization and individual supporters who rallied behind Healthy Utah, there were about 30 organizations who signed on in support of this extension of benefits.

[4] Can the eligible requirements change?

HB437 was written in a way that left the DOH with flexibility. The DOH can adjust the FPL guidelines up or down (covering more or less Utahns) dependent on program costs and appropriations. The DOH is also directed to study options to maximize use of employer-sponsored coverage for current Medicaid enrollees, and strategies to increase participation of currently Medicaid eligible, and uninsured, children.

[5] When will people be able to sign up?

Because of the state and federal waiver process—both of which require certain time durations and public hearings—the earliest date for federal approval of Utah’s Medicaid extension plan is August 2016. However, we don’t expect enrollment to begin until January 2017. See the complete HB 437 waiver and approval timeline here (pdf)

[6] Where are the savings reinvested?The bill establishes a “Medicaid Expansion Fund.”  The hospital assessment of $13.6M will be deposited into this fund (which can ultimately be raised to cover 33% of the state’s total cost of expansion if we fully expand Medicaid); 

Any savings determined by the DOH attributable to:

• The health coverage improvement program; 
• The inclusion of psychotropic drugs on the PDL;
• The services provided by the Public Employee’s Health Plan;

Any gifts, grants, donations, or any other conveyance of money that may be made to fund from private sources; and additional amounts as appropriated by the legislature. This fund shall earn interest and all interest earned on fund money shall be deposited back into the fund.

[6] Informational Links:

• Consolidated Motions for House Bill 3 (link)
• HB437 Fiscal Note (link)
• HB437 Bill Language (link)
• UHPP Bill Tracker (link)
• Support for HB437 (link)
• Where states stand on Medicaid expansion (link)
• 16-02-29 House B&L Vote 9-4-1 (link)
• 16-03-04 House Floor Vote 55-17-3 (link)
• 16-03-08 Senate HHS Vote 5-1 (link)
• 16-03-08 Senate Floor Vote (link)
• New FPL Ceilings for HB 437 eligibility categories (link)