JEFFERSON CITY — After the U.S. Supreme Court's ruling on the federal health care law Thursday, Missouri Republican leaders closed the door on expanding Medicaid eligibility while taking a wait-and-see approach for a state-based online insurance marketplace.
The high court upheld the closely-watched individual insurance mandate that will require most Americans to obtain insurance or face a penalty. However, the Supreme Court struck down part of the law that would have threatened Missouri and other states with the loss of federal Medicaid dollars if they refused to expand coverage to adults earning up to 133 percent of the federal poverty level.
Now Missouri officials face two questions: Should the state voluntarily expand Medicaid to cover more people who earn more money? And should Missouri create a state-based insurance exchange or use one that will be run by the federal government?
Immediately after the court's ruling, Missouri Republicans said expanding Medicaid would be unlikely and too expensive. Missouri sharply trimmed its Medicaid rolls in 2005 while facing state budget difficulties. The expansion in Missouri would cover an additional 255,000 adults, but it would cost the state $100 million or more each year starting in 2017.
Republican Lt. Gov. Peter Kinder said the Medicaid expansion would have been "a break-the-bank provision for the state of Missouri." Kinder, who in 2010 filed his own, separate legal challenge to the federal health care law, pledged Thursday to continue fighting.
Nonetheless, some advocates said expanding eligibility for Medicaid would help. Missouri Health Advocacy Alliance Executive Director Andrea Routh said the coalition of mostly consumer groups and health care providers would push for coverage of more people.
"It's really important that that Medicaid piece be implemented in Missouri. It's really designed to give those low-income families coverage in a way that is organized and we can track the spending," Routh said.
Missouri had about 835,000 uninsured residents in 2010 – about 14 percent of the population, according to the U.S. Census Bureau.
Democratic Gov. Jay Nixon made expanding eligibility for the state's Medicaid rolls a major theme of his 2008 election bid, but he declined to comment about it Thursday. Instead, Nixon said his administration is reviewing the high court's ruling and that he is "committed to working collaboratively with citizens, businesses, medical providers and the legislature to move forward in a way that works best for families in our state."
Besides Medicaid, state officials also will confront whether to develop a state-based exchange that would allow people to comparison shop online for insurance. The federal government would run exchanges starting in 2014 for states that do not develop their own.
Missouri received a $1 million planning grant and was awarded a $20.8 million federal grant to prepare for its own insurance exchange. Officials spent the planning grant and $1.3 million from the other federal grant, but work ground to a halt amid opposition from the Republican-led legislature.
House and Senate leaders said Thursday they preferred waiting until the outcome of this year's elections before launching into a state-based exchange.
Missouri voters will decide this fall on a measure that would allow a state-created insurance exchange only if it is specifically authorized by a state law or a subsequent vote of the people. It would prohibit the governor or any executive branch officials from taking any steps toward establishing an exchange on their own. House Majority Leader Tim Jones added that if Republican Mitt Romney defeats Democratic President Barack Obama, he believes Romney would suspend the requirement to have health insurance exchanges in each state.
"I wouldn't want to waste a lot of legislative time and state resources right now, setting up something — or talking about setting up something — which may become completely unnecessary in November," said Jones, R-Eureka.
Other lawmakers were more forceful.
Sen. Scott Rupp, R-Wentzville, said Missouri had decided not to move forward an exchange to not "build the building blocks of Obamacare in the state."
Rep. Chris Moldendorp said legislative leaders should immediately appoint a committee to study a health insurance exchange and approve the creation of one in January. Molendorp, a Republican, operates an insurance agency in Raymore and sponsored legislation to establish a state insurance exchange in 2011.
"Exercising your last shred of sovereignty, exercising states' rights to control their marketplace — that is a conservative, prudent, responsible action by a citizen legislator," he said.