Nixon proposes Medicaid expansion; GOP leaders ignore gov.

Saturday, March 7, 2009 | 3:46 p.m. CST; updated 6:01 p.m. CST, Saturday, March 7, 2009

HANNIBAL — Gov. Jay Nixon plans to seek an expansion of Medicaid coverage for thousands of low-income adults by relying on increased hospital taxes and federal dollars.

The Democratic governor is ready to roll out his revised health care proposal Monday — the same day the Republican-led House Budget Committee is to begin debating a spending plan that ignores Nixon's call to expand government-run health care.

Nixon said Saturday that he's hopeful lawmakers will embrace his new proposal, though GOP House leaders said they remain reluctant to do so.

"We'll be laying out this week what we think is a sound, solid significant step" to expand health coverage, Nixon said in an interview during an annual Democratic event in Hannibal. "(I) look forward to trying to work with Democrats and Republicans to try to get that in the budget and get that into people's health care."

Missouri provides health coverage to more than 840,000 children and low-income adults.

But those rolls were near 1 million in 2005, before Republicans lawmakers and then-Gov. Matt Blunt eliminated coverage for thousands of adults and reduced benefits for others in a budget-cutting move. Blunt did not seek re-election last year.

Nixon campaigned for governor by pledging to reverse the 2005 Medicaid cuts. But because of state budget troubles, he proposed only a partial restoration during his State of the State speech in January.

Nixon sought to add about 35,000 adults to Medicaid by raising the current income eligibility cutoff of $292 a month for a family of three to $763 a month, or 50 percent of the federal poverty threshold. He also sought to add about 27,000 children to government health care by removing or lowering their premiums and increasing the state's enrollment efforts.

Republican House members have defeated attempts to expand the children's health care plan this year. And neither the adult nor children's Medicaid expansions are included in the budget proposed by House Budget Committee Chairman Allen Icet, R-Wildwood.

Lawmakers familiar with Nixon's revised plan say hospitals would agree to pay a larger tax to the state, which would use the money to draw down additional federal Medicaid dollars. That pool of money then would be used to expand the state's Medicaid coverage for adults without tapping into general state tax revenues.

Under Nixon's original $142 million plan to expand adult Medicaid coverage, $14 million would have come from state general revenues, $37 million from other sources such as the existing hospital tax, and nearly $92 million from the federal government.

"The hospitals of Missouri have offered to pay the entire $14 million" otherwise coming from state tax dollars, said Rep. Chris Kelly, D-Columbia.

Dave Dillon, a spokesman for the Missouri Hospital Association, declined to discuss details of the plan Saturday. But he added: "It is perfectly in line with our agenda to expand coverage."

Federal law allows a state hospital tax of up to 5.5 percent to be used for matching federal Medicaid dollars, Dillon said. Missouri's current tax rate is 3.25 percent, which was expected to rise to 3.4 percent in 2010, he said.

House Speaker Ron Richard, R-Joplin, said he and other Republican House leaders met with Nixon on Wednesday to discuss the governor's revised health care plan. The plan was discussed Thursday in a closed caucus of House Republicans.

"Our guys are pretty firm (against) the expansion," Richard said.

Added House Majority Leader Steven Tilley, R-Perryville: "In tough economic times, expanding welfare is probably not the direction that the House would like to go."

Icet said he doesn't have any desire to expand Medicaid coverage for able-bodied adults, no matter what Nixon proposes. House Republicans remain reluctant to reverse the cuts they made in 2005, citing fears it will lead to higher costs to the state in the long-run.

"Given the difficult vote we took and given the abuse we have taken for doing what we believe was the right thing ... do we now go back?" Icet said. "We're just putting ourselves back into that difficult position."

Nixon plans to announce his revised health care proposal at 10 a.m. Monday at a health care center in St. Louis, followed by later events in Cape Girardeau and Springfield. He plans additional news conferences about the plan Tuesday in Columbia and Kansas City.


Associated Press writer Chris Blank contributed to this report from Jefferson City.


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