Missouri Republican outlines Medicaid plan

Tuesday, February 26, 2013 | 8:16 a.m. CST; updated 12:00 p.m. CST, Thursday, March 7, 2013

JEFFERSON CITY — After rejecting President Barack Obama's call to expand Medicaid, a key Republican lawmaker is rolling out a Missouri alternative that would knock tens of thousands of children out of the program while adding some parents to the rolls and offering cash incentives for patients to hold down their health care costs.

The plan to be introduced Tuesday by Missouri Rep. Jay Barnes is billed as a "market-based Medicaid" program that would require private insurers to compete to cover lower-income patients in the government-funded program. Barnes provided a draft of the legislation to The Associated Press in advance of its formal filing.

The legislation includes a fivefold increase in the income eligibility threshold for adults to receive Medicaid coverage in Missouri, potentially adding about 180,000 people to the rolls but stopping short of Obama's call to cover all adults earning up to 138 percent of the federal poverty level, or $32,500 for a family of four. But the bill significantly pares back eligibility for children to put them on par with their parents, removing about 44,000 children from the Medicaid rolls whose parents currently earn up to three times the federal poverty level.

Barnes is chairman of the House Government Oversight and Accountability Committee, which on Monday defeated a Democratic bill to implement the Medicaid expansion under the Obama-backed Affordable Care Act. Because he's chairman, Barnes' bill has a built-in advantage to advance. But it still faces several large obstacles. First, Barnes must solidify the support of colleagues in a Republican-dominated legislature where some members remain reluctant to do anything beyond simply rejecting the provisions of Obama's 2010 health care law.

If the bill were to pass and gain the approval of Democratic Gov. Jay Nixon, Missouri then would need to get federal approval for the eligibility changes, the cash incentives for patients and the switch to a competitively bid managed health care system. That could be a significant hurdle, since Obama's administration has said previously that any state not raising adult Medicaid eligibility to at least 138 percent of the poverty level will not qualify for the enhanced federal funding allowed under the federal law.

If Missouri can't get full federal funding for Barnes' plan initially — and a 90 percent federal share in the future — then none of the changes would take effect.

"The Obama administration is going to have to retract its left-wing ideology, one-size-fits-all Medicaid system that doesn't work for either taxpayers or recipients and allow states to craft their own solutions," Barnes, R-Jefferson City, said.

Missouri House Speaker Tim Jones called Barnes' legislation a "commonsense conservative way to look at your Medicaid transformation." But Jones said he doesn't expect the bill to pass this year.

"I look at this right now as a two-year project, and we're just at the very beginning of it," Jones, R-Eureka, said.

House Minority Leader Jake Hummel, who sponsored the Democrats' defeated plan to expand Medicaid, said he hadn't been briefed by Barnes on his alternative proposal and was unaware of the specific details.

But "I'm willing to work across the aisle to get something done," Hummel, D-St. Louis, said. "It's too big of an issue to just let go and make it strictly a party-line position."

Missouri's Medicaid program currently covers about 879,000 children, custodial parents, pregnant women, disabled adults and seniors. The state uses a managed care model in the St. Louis, Kansas City and central Missouri areas but otherwise pays medical providers on a fee-for-service basis.

Barnes' proposal would require private insurers to competitively bid — based in part on the price of their plans — to offer managed care services throughout the state. Medicaid participants would then have several insurers to choose from and also could pick either a high-deductible plan or a co-payment plan. They would receive electronic benefit cards that would track their medical care and could receive cash incentives at the end of the year if they avoid costly medical bills such as trips to hospital emergency rooms for ailments that could have been handled by a family physician.

Eligibility levels for adults and children alike would be set at the federal poverty level, which is $23,550 annually for a family of four. That would be a significant increase in Missouri's current income cutoff for custodial parents, which is around 19 percent of the poverty level. But that would be a sharp decrease in the eligibility for children, who currently can gain coverage if their parents earn up to three times the federal poverty level, which is $70,650 for a family of four. Eligibility thresholds also would be reduced for pregnant women.

Barnes said his legislation could save nearly $928 million over eight years.

Nixon, who supports Obama's Medicaid expansion, had said that more than 300,000 adults eventually could have been added to the rolls while the federal government pumps more than $2 billion annually into Missouri's Medicaid system. The increased federal money is projected by Nixon's administration to result in increased tax revenues as medical providers would be assumed to employ thousands more people.


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