Sunsetting Medicaid expansion

Late in the afternoon on Monday, February 10th, 2020, the Wyoming State Legislature failed to pass House Bill 75, a measure intended to pave the way for Medicaid expansion. Although the bill failed before it could officially be introduced in the House of Representatives, examining the contents of House Bill 75 closely to determine whether or not expansion would benefit Wyoming is still important.

There are two interesting aspects of the bill that are interesting to consider: first, lawmakers on the Revenue Committee, which is where HB 75 originates, chose to include a sunset clause that would repeal the law on January 1st, 2022. Although the authors of the bill most likely included the sunset measure with the knowledge that they could reauthorize it in a later session, it is worth noting that the Centers for Medicare & Medicaid Services (CMS), a part of the Federal Department of Health and Human Services, have never allowed an expansion state to withdraw once the expansion was adopted into law.

In fact, there is currently no avenue for withdrawal once a state expands Medicaid, which means that the sunset measure included in HB 75 would be illegal according to the federal government. This is a significant hurdle that authors of the bill would have to address if they hope to reintroduce Medicaid expansion. It would be interesting to know if the bill's authors knew this fact when they drafted the legislation.

The other worrisome measure included in House Bill 75 is a clause that demonstrates that the state government is unsure about whether or not they would need to raise additional revenue to afford expansion. Specifically, HB 75 says that the governor must provide a report to the legislature that includes, "whether any funding for the expansion will be necessary," and "the reasons that the expansion is viable and fiscally advantageous for Wyoming."

As the Wyoming Liberty Group has previously demonstrated, Medicaid expansion has not been fiscally advantageous for multiple states that expanded their coverage to able-bodied, childless adults. While it is difficult for us to determine whether or not Wyoming would need to increase taxes to generate more revenue for expansion, that was the case with numerous states across the country. Below is a breakdown of the additional fees, higher Medicaid premiums, and increased taxes that states had to pass in order to afford expansion.

• Arizona – increased their hospital fees.
• Arkansas – implemented work requirements on recipients and increased Medicaid premiums.
• California – implemented a tobacco tax and increased their hospital fees.
• Colorado – increased their hospital fees.
• Indiana – increased their cigarette tax, increased their hospital fees, implemented work requirements, and increased Medicaid premiums.
• Kentucky – implemented work requirements and increased Medicaid premiums.
• Louisiana – implemented a tax on HMOs.
• Minnesota – increased their provider fees.
• Montana – almost implemented a cigarette tax.
• New Hampshire – increased liquor tax, implemented work requirements.
• North Dakota – cut their provider reimbursement rate.
• Oregon – implemented a tax on hospitals and health insurance plans.
• Virginia – increased their provider fees.

When deciding whether or not Medicaid expansion would be "viable and fiscally advantageous" for Wyoming, we must consider that the current version of the Medicaid expansion bill, HB 75, includes a sunset provision that is illegal and the authors of the bill remain unsure if we would need to increase taxes, fees, or Medicaid premiums to afford expansion. After careful consideration of the bill in its current form, the Wyoming Liberty Group advised the legislature to vote to strike down HB 75 if it is reintroduced before Friday's legislative deadline.