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Gov. Gary Herbert blasted proposals to expand Medicaid coverage to more than 50,000 uninsured Utahns, saying it creates an unaffordable culture of dependency, a stark contrast with his Democratic challenger, Peter Cooke, who called it a "smart business decision."

The exchange in the second debate between the two candidates at the Salt Lake Chamber of Commerce on Thursday drew a stark contrast on an issue that will demand a decision from the governor before the end of the year.

The Affordable Care Act, also known as "Obamacare," calls for the expansion of Medicaid coverage to families and individuals making less than 138 percent of the poverty level, which comes to $30,700 for a family of four.

Herbert has said the state won't decide its course until after the election, in hopes that Mitt Romney and a new Congress might repeal the requirement.

But Cooke said deadlines are looming and action needs to be taken.

"We have to accept the Medicaid expansion. It's a smart business decision because the federal government picks up 100 percent of it," he said. "If the elections turn out a new president and there's a new concept, that's one thing. But the train has left the station, and we have to start making decisions as a state."

The federal government has committed to paying the full cost of the expansion through 2016, and a reduced amount, stepping down to 90 percent of the cost, by 2020.

Herbert gave his strongest denunciation of the proposal to date, saying it is unsustainable.

"Is it going to be Chinese dollars" that we receive, Herbert asked, arguing that 40 percent of the federal budget is now borrowed money.

He said the expanded federal program makes more people dependent on the government, erodes self-reliance and limits alternatives, suggesting that charity care could cover the uninsured.

"We've got a mentality developing in this country of entitlement … government every step of our life. I reject that notion," Herbert said. "The road of good intentions is paved, not with gold, but with taxpayer money. Whether it takes you to hell or not, it's going to cost you a lot of money."

Noting that Utah's health care costs are the lowest in the nation, Herbert said that "I don't want to junk a good system that's working better than anyplace in America for a mediocre, one-size-fits-all system that comes out of Washington, D.C."

Cooke said he would like to see the states receive block grants and have the latitude to implement the program themselves, but he said Utah has to declare its intentions on the expansion by Nov. 16, and stalling only invites the federal government to get more involved.

And it would be good for businesses, hospitals and doctors to have stability in coverage and it could control costs for consumers, Cooke argued.

The Utah Medical Association has endorsed the Medicaid expansion. On Thursday another group, the Utah Citizens' Counsel, a group of influential Utahns that includes former Gov. Olene Walker and former Gov. Jon Huntsman's health care adviser, John T. Nielsen, also endorsed the Medicaid expansion.

The group said it would extend coverage to 42,500 Utah parents and 10,400 childless adults, covering 14 percent of the state's uninsured, helping them to get preventive care that would keep them healthier and lower overall costs.

There is no hard deadline for states to decide whether to expand Medicaid, but a state is expected to tell the federal government by Nov. 16 if it intends to upgrade its health exchange to help shoppers connect with programs like Medicaid.

States that wait too long to decide risk losing hundreds of millions in federal funding.

The expansion would bring $152.3 million in new federal funding to Utah's doctors and hospitals in 2014 and $3.6 billion over 10 years. The state would have to come up with $6 million to upgrade its eligibility system in the first year, according to the Legislative Fiscal Analyst. Over 10 years, as federal funding is scaled back, the state would have to pay $239 million.

If lawmakers choose to proceed with the expansion, they will have to include the funding in the budget during the upcoming session and Herbert could include the money in his budget proposal in December.

The gubernatorial candidates also had some disagreement on illegal immigration, Cooke said he supports the Utah Compact — a statement of principles emphasizing compassionate immigration policies that was supported by the LDS Church and an array of business and political leaders. He signed the document this week and said he would veto bills inconsistent with the Compact.

Herbert said he has articulated principles on immigration that are in line with the Compact, but he won't sign it and derided Cooke as a "Johnny-come-lately" for signing it so recently, calling it "patronizing." Herbert said the area he might differ with the Compact is in his support for required background checks through E-Verify for potential workers and penalties for employers that fail to use the system.

Twitter: @RobertGehrke —

Online taxes

Gov. Gary Herbert said Utah is losing out on $120 million a year in sales taxes that are owed by residents making online purchases. Challenger Peter Cooke said he needs to study the issue more but isn't sure it would be a win for Utahns to start collecting that tax.