Will Missouri's GOP-backed Medicaid expansion get federal approval?

Mar 27, 2013

Credit File Photo / KBIA

Missouri’s Republican-led House on Tuesday struck down Democrats’ attempts to include Medicaid expansion in the state’s budget.

If that scenario sounds familiar to you, it’s because these rejections have happened a few times before. On Feb. 25, two House committees rejected Rep. Jake Hummel’s (D-St. Louis) bill to expand Medicaid under the terms of the Affordable Care Act. On March 14, the Senate Appropriations committee voted down the Senate Democrats’ version of the expansion bill.

Rep. Jay Barnes (R-Jefferson City) was in one of the committees that struck down Rep. Hummel's Medicaid expansion proposal. Barnes has since introduced his own version of the expansion -- outlined in House Bill 700

He touts his plan as the most market-based in the entire history of the safety-net program.

“We’d give [Medicaid recipients] economic incentives, for the first time in the history of the program, to choose cost-effective plans,” Barnes said.

The bill had its first hearing Monday in the Government Accountability and Oversight Committee. St Louis Public Radio's Marshall Griffin reports it would cover fewer adults than Democrats’ plan, but some believe it’s better than nothing.

Several groups that have backed Democratic Governor Jay Nixon’s call to expand Medicaid to 259-thousand Missourians next year also testified in favor of the House GOP alternative.  

“Our organization represents most of the ambulance providers, predominantly ambulance districts … we don’t necessarily agree with everything in the bill, but we think it’s a good start and we need to continue to move this forward,” said Brent Hemphill, a lobbyist who represents the Missouri Ambulance Association.

Currently, if you’re an able-bodied adult with no children, you aren’t eligible for Medicaid in Missouri, no matter how low your income. Barnes’ expansion plan would expand Medicaid eligibility to cover people earning up to 100 percent of the federal poverty level – which is about $11,000 per year for single individual. But the plan would also reduce children’s eligibility. As it stands right now, Missouri’s Medicaid covers children even when their parents earn up to 300 percent of the federal poverty level – $58,590 for a family of three.  

Barnes said children of families earning more than 100 percent of the federal poverty level would be eligible for subsidies under the health insurance marketplace.

Health policy analysts worry that Barnes’s plan stray too much from the Medicaid expansion requirements outlined under the Affordable Care Act, signed into law by President Barack Obama in 2010 and upheld by a Supreme Court decision in 2012.

“Between cutting children and then not covering adults up to the 138 percent of poverty that the federal government is asking... I have serious concerns that the federal government will not approve that,” said Karen Edison, director of the Center for Health Policy at MU.

The Affordable Care Act calls for expanding the program to cover everyone earning up to 138 percent of the federal poverty level – that’s about $15,000 for an individual per year. If states expand Medicaid by that guideline by 2014, the federal government will pay for the entire cost of the expansion in its first three years. Every year after that, states will gradually pay bigger chunks of the cost for newly eligible Medicaid recipients, eventually paying 90 percent of the entire cost per year. In total, one estimate says the federal government could funnel in $8.2 billion to Missouri, between 2014 and 2020. 

In a factsheet published in December, the Centers for Medicaid and Medicare Services stated the law will not provide funding for phased-in or partial expansion.

“I think [to include that fact in the factsheet] was a political decision, not a legal decision,” Barnes said. “If states start pushing back, I would hope the Obama administration would show flexibility and allow states like Missouri to craft their own solution rather than force their one-size-fits-all plan.”

Those who share Barnes’ point of view might point to our neighbor Arkansas. The federal government recently gave the state the green light to begin developing an alternative expansion plan. Instead of a Medicaid expansion, Arkansas wants to use federal money to buy private insurance for those that earn up to 138 percent of the poverty level.

That 138 percentage is crucial.

“The reason their plan seems to be moving forward is that they’re looking to fully expand their Medicaid up to 138 percent of poverty,” said Akeiisa Coleman, health policy associate at the Missouri Foundation for Health.

Coleman says it’s unlikely the federal government would be as flexible with a proposal that doesn’t cover everyone who earns up to 138 percent of poverty.

Barnes’s Medicaid expansion proposal is set for a vote next week in the Government Accountability and Oversight committee, which he also chairs.