LINCOLN — A federal agency’s rejection of Utah’s plan to partially expand Medicaid could send other states back to the drawing board on covering more low-income people under the Affordable Care Act, but it offers few clues about the potential fate of Nebraska’s Medicaid expansion plan.

More ominous was a federal judge’s ruling Monday that blocked Medicaid work requirements in New Hampshire.

U.S. District Judge James E. Boasberg in Washington ruled that the Trump administration hasn’t adequately addressed the potential loss of health coverage for low-income residents. The ruling comes four months after he blocked similar work requirements in Arkansas and Kentucky.

Nebraska Medicaid officials have announced plans to include work requirements for able-bodied adults in their implementation of voter-approved Medicaid expansion. The plan must win federal approval to move forward.

Regarding the Utah plan, Matt Salo of the National Association of Medicaid Directors said the decision by the U.S. Centers for Medicare and Medicaid Services will be a disappointment for conservative-leaning states where leaders had considered the proposal a middle-ground approach.

In a statement, a CMS spokesperson said the agency would not approve any other such requests from states proposing to do a smaller Medicaid expansion.

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“This would invite continued reliance on a broken and unsustainable Obamacare system,” the spokesperson said.

Supporters of full Medicaid expansion in Utah cheered the federal decision, citing a fallback provision that would require the state to cover more people if the U.S. government rejected the GOP-crafted plan.

Under former President Barack Obama’s signature health care law, the federal government will cover 90% of the cost for expanding Medicaid to adults making up to 138% of the federal poverty level. That’s a higher federal match than for other Medicaid programs.

Utah had sought the 90% match for expanding Medicaid only to a smaller pool of people — those making up to 100% of the federal poverty level.

In return, the state offered to accept federal payments based on the number of people enrolled, rather than on the medical services they used. That would put more financial risk on the state, which planned to limit costs by imposing work requirements and potentially capping enrollment.

Utah voters, like those in Nebraska, had approved a measure last year calling for a broader Medicaid expansion. In Utah, lawmakers approved the limited version. State officials developed Nebraska’s implementation plan independent of the Legislature.

The Nebraska plan would cover adults making up to 138% of the poverty level — about 94,000 additional people — but through a two-tier system. People wanting full Medicaid coverage would have to work, be caring for family members, volunteer or be working on higher education. People could have less coverage without meeting the requirements.

Nebraska will have to seek federal approval of a so-called 1115 demonstration waiver to implement the two-tier program. State officials are awaiting federal approval for expanding Medicaid and have not yet submitted the waiver proposal.

While supporters argue that work requirements help participants achieve self-sufficiency, the federal judge ruled that they undermine the Medicaid program’s mission of providing health care for the needy.

Boasberg said “we have all seen this movie before” and criticized U.S. Secretary of Health and Human Services Alex Azar for acknowledging the potential impact of the work requirements without analyzing the scope of the impact.

This report includes material from the Associated Press.

Martha Stoddard keeps legislators honest from The World-Herald's Lincoln bureau, where she covers news from the State Capitol. Follow her on Twitter @StoddardOWH. Phone: 402-473-9583.

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