Will Missouri Legislature, governor compromise on Medicaid?

The Medicaid expansion, an optional provision in the federal Affordable Care Act, would add an estimated 300,000 Missourians to the program. It will be one of the key issues for state lawmakers to decide in the session that begins Wednesday.

House Speaker Tim Jones, R-Eureka, has tapped three Republican legislators to come up with “innovative” proposals for the health care program that serves low-income Missourians.

“They are looking at a way to see if we can possibly engage in a version of Medicaid transformation instead of just expansion,” Jones said. “We need to come up with some kind of plan.”

Jones said his ideal plan would not expand eligibility for able-bodied adults but would tap into additional federal money available.

About 881,000 Missourians are now enrolled in Medicaid, which has varying degrees of coverage based on income. More than 60 percent are children, and 18.6 percent are people with disabilities.

Under the proposal outlined in the federal health care law, Medicaid benefits would be expanded to everyone who makes up to 138 percent of the federal poverty level — up to about $31,800 a year for a family of four, or $15,000 for a single person. Most of the new enrollees would be childless adults who are not disabled or elderly and can’t qualify for Medicaid under Missouri’s current requirements. Parents also would see a jump in Medicaid eligibility.

The federal government already pays part of Missouri’s Medicaid costs. Under the federal expansion proposal, it would pick up the full tab for new recipients in the first three years and continue paying most of the costs beyond that.

But Republican leaders don’t seem inclined to approve those changes.

“What we won’t be doing is expanding Medicaid in the fashion contemplated by Obamacare,” said Rep. Jay Barnes, a Republican from Jefferson City who is one of the three lawmakers looking into the state’s options. “If there are reforms within the Medicaid system that can be made to save taxpayer money and at the same time expand access to people who need care — then that’s a topic worth discussing.”

Republicans have veto-proof majorities in the House and Senate, but Gov. Jay Nixon, a Democrat, has traveled the state in support of the Medicaid expansion plan. Several health care groups also are backing the effort, as is the Missouri Chamber of Commerce.

While legislators may not embrace the full expansion, Rep. Chris Kelly, D-Columbia, said the state could try to find middle ground.

Much of that discussion centers on whether a partial expansion — up to an amount less than 138 percent of the federal poverty level, for example, or one that expands coverage only for certain groups — would still trigger the higher federal match rates.

Last month, U.S. Health and Human Services Secretary Kathleen Sebelius said in a letter to the states that partial expansion plans won’t qualify for the full match, but that the federal government will consider waiver requests.

Kelly questioned whether the opinion will stick since the U.S. Supreme Court ruled that states can’t be compelled to expand Medicaid under the Affordable Care Act.

“If the court says, ‘You can do all of this, but you don’t have to do any of it,’ does that mean there’s room between all and none? I don’t know,” Kelly said. “I would not be surprised to see something less (than a full expansion) come out of the Legislature.”

Several lawmakers say it’s unlikely an expansion will happen without structural changes to the state’s Medicaid system.

Rep. Keith Frederick, a Republican from Rolla who is also among Jones’ trio studying Medicaid options, said the state’s first priority should be reform because the current Medicaid system is “badly flawed.” He added that he doesn’t support an expansion this year, even if reforms are passed.

“I think we should do a better job with the Medicaid population we currently have rather than expanding a program that’s falling short,” he said.

Frederick also said Missouri could look to states like Florida and Kansas, which are moving their Medicaid services to private companies that serve as managed care providers.

Others have discussed the possibility of changing the model through co-payments or cost-saving incentives. Missouri would have to seek a waiver from the federal government for such proposals. Co-payment proposals from Florida and California were rejected last year.

Jones said he’s concerned about the costs of an outright expansion here.

“The governor has not explained how he plans to pay for it,” he said.

Medicaid costs have swelled in recent years, leaving lawmakers with the task of pulling from other areas of the state budget, Jones said.

Under the expansion offer, the federal government would pay the full cost of the new Medicaid enrollees through 2017, but the state’s share of the cost would gradually increase to 10 percent.

That means the federal government would pay a projected $8.2 billion through 2019 for the expansion in Missouri, while the state would pay $333 million during that time and an estimated $100 million each year after that to cover the cost of new enrollees.

The governor’s budget office estimates that the state would see a $300 million boost to its general revenue fund over the next three years if the Legislature expands Medicaid. Once the state’s costs kick in, savings from other programs and estimated new revenue would more than cover the cost of the expansion, according to the estimates.

The budget office expects that the state would see about 259,500 newly eligible enrollees in 2014 under the expansion — nearly half of them childless adults. By 2018, the new enrollees would grow to 307,000.

But Senate Appropriations Chair Kurt Schaefer, R-Columbia, questions the budget office’s projected revenue boost.

“There are a lot of assumptions that go into those numbers,” he said.

PHILOSOPHICAL DEBATE

Also at issue in the expansion debate: a fundamental divide over the state’s approach to so-called “entitlement” programs.

Jones and other conservative lawmakers repeatedly have stressed that the state’s Medicaid focus should be on “taking care of those who cannot take care of themselves.”

“I think expanding an entitlement to able-bodied adults defeats that desire,” Jones said. “I don’t want to balance an increased entitlement on the backs of our K-12 or higher education systems.”

Meanwhile, supporters of the expansion have focused their talking points on other aspects, such as economic impact.

A study commissioned by the Missouri Hospital Association and the Missouri Foundation for Health found that 24,000 jobs would be created over the next year if the state expands Medicaid. Several groups have lauded the report as a reason for Missouri to approve the expansion.

“This represents more employment than the state’s 10 Fortune 400 businesses,” said Missouri Hospital Association president and CEO Herb Kuhn. “We could significantly reduce the state’s unemployment rate.”

Ryan Barker of the Missouri Foundation for Health said making sure Missourians have access to health insurance would create other benefits.

“The bottom line is that health insurance matters,” he said. “A healthy workforce is a more-productive workforce.”

Caught in the middle are Missourians like Jenna Koupal, who doesn’t have health insurance and says she can’t afford it with her hourly job.

“It’s very scary,” said Koupal, 21, who has a 2-month-old son. “It’s something that I worry about on a constant basis — not knowing what I’m going to do if I get sick.”

The St. Charles County resident, who suffers from postpartum depression, has worked at a call center in Weldon Spring for the past nine months, making about $9 an hour.

She thinks some of the resistance to the expansion comes from a “big stigma against people on Medicaid.”

“There’s a stereotype,” she said.

She and her son’s father are living with his parents but are trying to save money to get a place of their own.

“I’m doing the best I can,” she said. Being Medicaid-eligible “would just help me out tremendously.”

But Frederick, an orthopedic surgeon, said the quality of health care coverage would be worse for Medicaid recipients if the state expands.

“If you just expand the Medicaid program and do nothing to improve it, then there are a number of doctors who could remove themselves from the program,” he said. “There would be fewer providers.”

Virginia Young of the Post-Dispatch contributed to this report.