After years of debating whether to expand Medicaid in Missouri, voters will finally get the chance to decide in the August primary election.
Currently, the government-funded health insurance program for low-income Missourians and those with disabilities takes up roughly one-third of the state’s $35 billion budget. Supporters of expansion say there are still significant gaps in coverage.
Missouri has some of the strictest eligibility requirements in the country, said Traci Gleason, with the Missouri Budget Project, an organization that analyzes state finances.
“If you’re not a custodial parent, and you’re not a senior or disabled, you cannot access Medicaid,” Gleason said. “The small sliver of adults that we cover, those custodial parents, we cover at the lowest eligibility level allowed by federal law.”
Amendment 2 would expand Medicaid to cover adults whose income is 138% of the federal poverty level or below. For 2020, this was an annual income of $17,600 for an individual and roughly $36,000 for a family of four. Studies show close to 250,000 Missourians would become eligible for coverage.
Opponents say cost will increase
The main area of contention is how the state will pick up the tab as more people would be added to the program. Some, like Rep. Cody Smith, chairman of the House Budget Committee, say it will blow a hole in the state budget.
“Especially in light of a pandemic and an economic downturn, we need to try to understand what we’re getting into,” Smith, R-Carthage, said at a budget hearing in June.
According to information from the Missouri Department of Social Services, expanding Medicaid could cost the state $200 million annually. State Rep. Mary Elizabeth Coleman, R-Arnold, said this makes her worry that lawmakers will be forced to reduce benefits for those already covered under the state’s Medicaid program.
“Missouri currently has the most generous Medicaid plan in the country, even without expansion, for the populations it covers,” Coleman said. “I want to make sure we don’t see our elderly, disabled and kids have less benefits because we’re expanding it to healthy adults.”
If Amendment 2 is approved, a federal match would guarantee the state would only be required to pay 10% of the costs; the federal government would pay 90%. Since Missouri is one of 37 states that has yet to expand, it’s on the hook for 35% of the tab currently.
Coleman, who said she isn’t opposed to the idea of more coverage for Missourians, still has concerns about the cost. Because the individuals already on Medicaid cannot be re-enrolled under expansion, the state will still pay 35% plus the additional 10% of the thousands being added.
“That means that we have to either take money from other places or reduce benefits within the Medicaid population,” Coleman said. “I don’t want to see either of those done.”
Supporters cite savings
Gleason said it is more likely to improve state finances based on what’s happened in other states.
“Because of the way states finance Medicaid, they found that they don’t have to cut other spending in order to raise that 10% match because they can offset some, or all of those costs, through their existing program,” Gleason said. “In many cases the net cost to the state is negative, or at the least is cost neutral.”
Tim McBride, the former chair of the oversight committee for Missouri’s Medicaid program, supports expanding Medicaid to help drive down the annual cost for the state. Because of the Hancock Amendment, lawmakers cannot vote to increase taxes without approval from voters. He said this means more of the state budget continues to be allocated to the Medicaid program.
“We are one of the lowest-taxed states in the country and we have this limit on our revenues, so it’s creating a big issue when you have a Medicaid program that grows faster than the state revenues,” McBride said.
According to a study conducted by the Institute of Public Health at Washington University, expanding Medicaid could save the state $39 million in the first year, and by 2024 the state could save a total of $932 million. In the worst-case scenario, however, it could cost the state an additional $42 million.
Missouri’s Republican-dominated Legislature has repeatedly rejected the idea, with many members saying the cost would be too much for the financially strapped state. Gov. Mike Parson utilized his high-profile State of the State speech back in January to warn voters about Medicaid expansion.
“So, make no mistake about it,” Parson said. “The vague proposal they are not explaining or purposely withholding is a massive tax increase that Missourians cannot afford.”
Supporters of expansion include Missouri’s hospitals, which have witnessed the shuttering of several rural hospitals struggling for funding. The Missouri Foundation for Health released an impact report that shows an average of 16,000 new jobs would be created each year for five years, and that personal incomes would average a $500 increase per Missouri household every year.
In June, an unlikely supporter also emerged. The Missouri Chamber of Commerce and Industry, usually a top ally of Parson, called Medicaid expansion a “pro-jobs measure.”
“Passage will expand our state’s economic output by $2.5 billion,” said Missouri Chamber CEO Daniel Mehan.
Thirty-seven states have expanded Medicaid. None has reversed its decision, Gleason said, and none has lost money due to expansion even with the added 10%.
If voters approve expansion on Aug. 4, the Legislature will have the obligation of putting the plan in place. So, it’s not totally clear what the program will look like, and it likely won’t be operating until 2022.