Medicaid spending per capita in Utah is lowest nationwide, report says

SALT LAKE CITY — Medicaid spending per capita is lower in the Beehive State than anywhere else in the country, according to the findings of a Utah Foundation report published Wednesday.

As of 2016, $703 in combined state and federal Medicaid dollars were spent per capita in Utah, said the foundation, a nonpartisan policy research nonprofit. Per capita data was calculated by dividing costs by the number of total residents in the state.

Sam Brucker, a Utah Foundation research analyst who authored the report, said the low number is "good news" for the average Utah taxpayer.

"It's a lower tax burden overall for Utahns," Brucker said.

State costs for Utah's Medicaid program also account for 18.7 percent of the state budget, eighth lowest in the United States, the report found. Nationwide, Utah also had the lowest percentage of its population enrolled in Medicaid as of 2016.

The average cost for each Medicaid enrollee in Utah was $5,326 in 2014, the most recent year for which that figure is available, the report says. That number was the 10th lowest in the United States.

Low per-enrollee spending, which is "a little more significant" of a metric showing "what the actual population in Medicaid costs," Brucker said, is due in part to children making up a relatively high proportion of those the program covers in Utah.

In 2017, recipients 18 years old or younger made up about 63 percent of Utah's Medicaid enrollees, but accounted for less than a third of the program's costs, the report says.

"They may need some ... preventive services and (other) services that don't cost quite as much and they don't need them quite as often," Brucker said.

Utah's comparatively large families have also held sway on per capita income formulas the federal government uses to determine how much to pay for Medicaid services in the state.

A high number of children have contributed to per capita income in the state ranking among the lowest in the country, leading to the federal government paying 70 percent of Medicaid costs in Utah, which the report says is "the ninth highest reimbursement rate in the nation."

"We kind of make out well because of the way the federal funding is designed," Brucker said.

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Gov. Gary Herbert signed a bill Tuesday instructing the Department of Health to seek large-scale Medicaid expansion in Utah, which state officials say would expand coverage eligibility to everyone in the state up to the federal poverty line.

The state pays the remainder of Medicaid costs that are not reimbursed by the federal government.

In Utah, 10 percent of the population was enrolled in Medicaid in 2016, the report says. That coverage rate was lowest in the country, and 18 states and the District of Columbia had rates more than double that, according to data kept by health care policy think tank Kaiser Family Foundation.

Contributing to that low number, Utah is one of 18 states in the country that have opted not to expand Medicaid eligibility as provided for under the Affordable Care Act, Brucker said.

"So we're one of the 18 states still kind of in flux," she said. "You have ... the community health workers advocacy agencies who are encouraged to get a broader population covered. Then you have this other side where there is this concern with spending."

After years of failed efforts doomed by such budget concerns, state lawmakers passed a law this year seeking large-scale Medicaid expansion.

The law instructs state health officials to apply with the federal government to expand Medicaid eligibility to Utahns in households earning up to 100 percent of the federal poverty level, potentially giving coverage to up to 90,000 more Utahns.

Medicaid advocates, arguing their measure is a better option, have created an initiative that would expand coverage up to 138 percent of the federal poverty level and make up to 150,000 more Utahns eligible. This week, the initiative was certified as having enough signatures to go before the state's voters in November.

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Supporters gathered enough signatures to get Medicaid expansion on the Utah ballot, according to election data released Friday, as advocates go to voters in states where conservative leaders have not made coverage available for thousands of low-income residents.

"There is an ongoing tension between concerns about the growing cost of Medicaid and a desire to expand coverage to a broader population in Utah," said Utah Foundation President Peter Reichard in a statement Wednesday.

"As current and future Medicaid proposals unfold, coverage and its costs will demand close attention from the public and policymakers."

Nationally, Medicaid costs are expected to increase 5.8 annually on average through 2026, Utah Foundation's report says. Currently, the program is paid for chiefly through unrestricted federal matching funds activated by state expenditures.

One significant reason for the projected cost increase for Medicaid, Brucker said, is "because we're seeing increasing enrollment of older people in general and ... also individuals with disabilities, and those two populations do cost more."

In 2016, Utahns with disabilities were just 15 percent of all Medicaid enrollees in the state, but accounted for a little more than 47 percent of the program's costs, according to the new report. Utahns 65 years old or older are 3.9 percent of the state's Medicaid recipients, but account for 7.3 percent of its costs.

Those groups' prevalence among Utah Medicaid enrollees somewhat increased from 2016 to 2017, "while at the same time child enrollees decreased by 1.9 percent and pregnant women, who are also on average a less expensive group, also decreased 5.1 percent," Brucker said.

General rises in prices for medical care and prescription drugs are also seen as "primary factors driving Medicaid spending growth," the Utah Foundation said in a release.

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