Obama budget alters Medicaid expansion plan in Missouri

President Barack Obama proposed in his budget Wednesday to delay planned cuts in special federal payments to hospitals that serve large numbers of poor people.

Proponents of Medicaid expansion had argued that those cuts — part of the Affordable Care Act — could force some rural hospitals to close unless the state expanded Medicaid to cover more people.

Now, any political leverage that argument provided is gone, at least for this year.

Republican legislators who oppose the Medicaid expansion cheered the president’s move.

“This is a good day for Missourians as far as I’m concerned,” said Sen. John Lamping, R-Ladue, who sponsors a concurrent resolution urging the federal government to stop the hospital cuts.

The payments are known as “DSH payments” because they reward hospitals that serve a disproportionate share of the poor. “There are dozens of states that are not going to expand Medicaid in 2013, so it made no sense to have the DSH payments start to phase down in ’14,” Lamping said. “We weren’t going to expand Medicaid no matter what.”

The Legislature has said it will block the expansion, in part, because legislators don’t trust the federal government to keep its promise to fund the program. Legislators also say Medicaid is broken and needs to be reformed.

Gov. Jay Nixon has been pushing for the expansion in news conferences throughout the state. This week, he pressed his case in a private meeting with the Senate Republican Caucus.

Senators said Nixon told them in the meeting that he would not seek a delay in the DSH cuts because the federal government was unmovable on the subject.

Senate Appropriations Chairman Kurt Schaefer, R-Columbia, said he was glad Obama delayed the cuts. “We asked the governor to make that request, and he wouldn’t.”

Schaefer’s committee was wrapping up action Thursday on its version of the state budget, which will not include Medicaid expansion, he said.

In a statement released by the governor’s office, Nixon said he was “completely surprised” by the president’s action. “My top priority remains ensuring we seize the unique opportunity before us to cover hundreds of thousands of working Missourians, expand access to mental health treatment, and bring the dollars Missourians send to Washington back to work here in Missouri,” Nixon said.

Members of the coalition working to expand Medicaid said that while the president’s decision softens the immediate blow for hospitals, it doesn’t alleviate the needs of uninsured adults.

“This shouldn’t be a debate about how providers are going to be impacted,” said Joe Pierle, who lobbies for the Missouri Primary Care Association. “This is about the impact on 300,000 Missourians who are lower income.”

The Missouri Hospital Association played down the impact of the president’s move, saying that other planned federal cuts, particularly in the Medicare program, will still hit hospitals’ budgets hard.

“To say that we’re going to be all right … just does a complete disservice to all the other cuts that are taking place,” said association spokesman Dave Dillon. He called the first-year DSH cuts a “blip.”

The DSH cuts were expected to start at $500 million nationally next year and would get bigger each year.

On the Senate floor, Lamping called the president’s move to delay the cuts part of a pattern that shows Obama’s plan is falling apart. “Every day something gets pushed back,” Lamping said. “Cost estimates get increased. I think we’re going to see all throughout the year things happening like this. More and more people realize this is a train wreck and a disaster.”

Lamping’s resolution is SCR5.