VOTERS GUIDE 2012: Missouri faces tough Medicaid choice

Monday, September 17, 2012 | 9:00 a.m. CDT; updated 10:31 p.m. CDT, Tuesday, September 18, 2012

Editor's note: This story originally published in advance of the August primary. It has been edited to include responses from the candidates who will appear on the Nov. 6 ballot.

COLUMBIA — The U.S. Supreme Court's ruling on the Affordable Care Act has left Missouri with a looming decision on expanding its Medicaid program.

The federal health care law originally required states to grow their Medicaid programs or risk losing their existing Medicaid funding from the federal government. States would have been required to take on more patients with higher incomes or risk being unable to fund Medicaid at all. 

The Supreme Court, however, rejected this mandatory expansion in its June 28 ruling, which upheld most of the Affordable Care Act. Chief Justice John Roberts said the forced growth of the Medicaid program was a "gun to the head" of the states. The Medicaid provision was the only part of the health-care law rejected by the court. 

About 14 percent of the state's population, or 835,000 people have no health insurance. The aim of the Medicaid expansion was to bring that number down.  

Because of the Supreme Court's ruling, states will get to choose whether to expand their Medicaid coverage.

States that "opt in" will have to take on all adult residents whose income is 133 percent of the national poverty line. For a four-person household, the 2012 federal poverty line is an annual income of $23,050, which means adults in four-person households with annual incomes of $30,657 would be eligible.

If a state takes this option, the federal government will pay 100 percent of the cost associated with the expanded program for three years. After that, the state will start to gradually pay for the estimated 255,000 new patients.

Missouri's Medicaid program is one of the leanest in the nation, and it is unlikely to grow under Republican leadership in Jefferson City.

Legislative leaders are already calling on the state to reject the federal government's "opt-in" deal. House Budget Committee Chairman Ryan Silvey, R-Kansas City, said he can't see how the General Assembly would think it is a good idea to expand the program. Democratic Gov. Jay Nixon has not yet offered his stance on the issue.

Missouri's current Medicaid program and its history 

The federal government created the Medicaid program in 1965 to provide health care to people older than 65, people who are blind or have a disability and families with dependent children. Since then, the program has been expanded to cover pregnant women and children living in poverty, as well as children in state custody.

Missouri's current program covers adults who have children and whose incomes are less than 19 percent of the federal poverty line. The program does not cover adults without children. The federal government pays 63 percent of the costs associated with the current program; Missouri pays the remaining 37 percent.

The program reached its current eligibility levels in 2005, when Republican Gov. Matt Blunt and the Republican-controlled General Assembly cut about 100,000 people off the state Medicaid's program in an effort to balance the state's budget. Before the cuts, adults with incomes less than 75 percent of the federal poverty line were covered by the program.

In 2009, Gov. Jay Nixon tried to reverse at least some of the cuts. Nixon cut a deal with the Missouri Hospital Association to provide health care coverage for 35,000 low-income people at no cost to the state.

Nixon's 2009 proposal would have expanded Medicaid coverage to adult parents with incomes below 50 percent of the federal poverty line. It would have cost roughly $150 million, with the cost split between the federal government and the hospitals.

The Republican-controlled legislature blocked the expansion.

Despite cuts, Missouri's Medicaid spending has been growing. In the 2013 fiscal year, Missouri's Medicaid program will cost $8.2 billion, roughly one-third of the state's $24 billion budget. Of the total cost, $1.7 billion comes from the state's general revenue fund.

How the expanded Medicaid program would work

If Missouri lawmakers choose to grow the state's Medicaid program, the federal government would pay 100 percent of the additional cost for the first three years. Starting in 2017, however, the state would have to start paying only some of the annual costs for the expanded program.

There is no exact estimate of the number of Missourians who would qualify under the expanded Medicaid program. Estimates start at 255,000 people, but some lawmakers acknowledge the number could stretch to 400,000.

The expanded program would also cover adults without children, who are currently left out of Missouri's system.

For the first three years of the program, the federal government would pay an estimated $6 billion over three years at no cost to the state. By 2017, however, the state would have to start contributing to the program's cost. 

In 2017, Missouri would pay about $100 million, or 5 percent of the cost annually for the new program. The state's payment would increase by 1 percent every year until 2022. In 2022, Missouri would be paying $247 million, or 10 percent of the program's cost. For all years following 2022, Missouri would continue to pay the 10 percent rate, State Budget Director Linda Luebbering said.

The state could see other cost increases outside of the expansion. About 900,000 Missouri residents are eligible for Medicaid, but not all of them are enrolled. The Affordable Care Act's individual mandate, however, will require them to get insurance, which means many probably will sign up for Medicaid. If they were eligible for the existing state program, then the state must pay the 37 percent matching rate instead of the 10 percent rate offered in the health-care law. 

What local candidates would do

Given the timeline for implementing the federal health-care law, it is likely that whoever is elected in 2012 will have to decide whether Missouri should opt in to the expanded Medicaid program. Here's what candidate for local legislative offices had to say about the issue.

State Senate District 19

  • State Rep. Mary Still (D): She said expanding Medicaid would make "good economic sense to take advantage of what the federal government is offering." She also said "the payment from the federal government would be a great infusion into our economy, especially one with a lot of hospitals."
  • Incumbent Sen. Kurt Schaefer (R): He said he could not vote to expand Medicaid unless he is confident money would not be drawn from public education once the federal assistance begins to dwindle. He added that if Missouri had to come up with $100 million this year for Medicaid, the result would have been "devastating to public education." 

House District 44

  • Mike Becker (R): He said he is “strictly against” expanding Missouri’s Medicaid program because the state can't afford it. He also believes the expansion would “force people out of private health-care programs and onto the state’s insurance rolls.” He  questioned what programs would have to be cut or what taxes would have to be raised in order to pay for the expansion.
  • Caleb Rowden (R): He opposed the expansion and said "the moral of the story is we don’t have the funds to be able to do it when the rubber meets the road."
  • Chris Dwyer (R): He said the entire health care law is "unconstitutional." He added the expanded program is "going to cost (Missouri) money."  
  • Former state Sen. Dennis Smith (R): He said the expansion would be "very, very problematic because it is a serious obligation." Because Missouri is now struggling to balance its budget, he said he "cannot comprehend how Missouri will be able to pick up that obligation."
  • Former state Sen. Ken Jacob (D): He said "only a fool would not take (the federal) deal" and said Republican opposition was about putting "partisanship before plain and simple good business."

House District 45 

  • Incumbent Rep. Chris Kelly (D): He said he supports the expansion "100 percent." He said "the health-care costs that we have now will be less by a long shot" when Missouri would have to pay for the expanded program. 

House District 46

  • Incumbent Rep. Stephen Webber (D): He said expanding the state's Medicaid program is a "no-brainer." Webber dismissed the argument that the expansion would be too costly and said Republicans have voted to cut corporate taxes. That revenue, he said, could have been used to fund the expanded program.
  • Fred Berry (R): He said the Medicaid expansion is "unaffordable." He also said one of his priorities would be to further block the law's implementation. 

House District 47

  • Former state Rep. Nancy Copenhaver (D): She said she would support expanding the state's Medicaid program and does not understand why Missouri would walk away from billions of dollars in federal money. 
  • John Wright (D): He could not be reached but has previously said his opinion on the Affordable Care Act "doesn't much matter" after the Supreme Court ruling. He also said that further policy and discussion on the health care law should occur at the federal level.  
  • Mitch Richards (R): He said he opposed the expansion and called it a "gross expansion of power (by the federal government)." He added that "in order to expand money for Medicaid, you would have to take away money from higher education or raise taxes."

House District 50

  • Incumbent Rep. Caleb Jones (R) said before Missouri does anything with its Medicaid program, state officials need to analyze the current Medicaid roles, as well as other programs, to make sure those on the roles have to be. "It's been a tough decade of budget years. Analyzing all the programs (and the budget) would make sure we are actually helping the community."

Missourian Reporter Matthew Patane contributed to this report. 

Supervising editor is Scott Swafford.

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