GOP Medicaid plan would let some Missourians in, kick others out

Republican House leaders for weeks have been discussing the potential for Medicaid “transformation” as an alternative to an outright expansion proposed in the federal Affordable Care Act, but the bill Rep. Jay Barnes filed Tuesday — which he has dubbed “market-based Medicaid” — is the first clear indicator of the changes they will pursue.

On Monday, a House committee rejected a federal-model plan supported by Democrats, including Gov. Jay Nixon, to expand Medicaid eligibility to an estimated 300,000 more Missourians.

Barnes’ alternative would expand eligibility for some — mostly childless adults — while pushing others to subsidized private insurance. It also seeks to cut costs through creating cash incentives for Medicaid recipients who make an effort to keep their health costs low and shifting Missouri’s Medicaid program to private insurer-based managed care systems.

Barnes, R-Jefferson City, estimates that his changes would save the state $741 million over the next eight years.

“Missouri taxpayers cannot afford a straight Medicaid expansion,” he said. “But by transforming the system and streamlining eligibility, we create a fiscal note so positive that Missouri taxpayers can’t afford not to transform this broken system.”

The net effect, he said, would be fewer people eligible for Medicaid, rather than the expanded coverage Democrats want.

About 880,000 Missourians are enrolled in Medicaid, which has varying degrees of coverage based on income.

The federal health care law proposes coverage for anyone who falls below 138 percent of the federal poverty level, or about $32,500 for a family of four or $15,800 for a single person.

Barnes’ plan would set income eligibility at the federal poverty level — currently $23,550 for a family of four or $11,490 for a single person. That would drastically reduce eligibility for children, which in Missouri is currently set at 300 percent of poverty level, or $70,650 for a family of four. According to estimates in Barnes’ proposal, about 44,000 children currently in the program would no longer be eligible.

Those who no longer qualify for Medicaid under the shift would instead have access to private coverage bought through a federal health insurance exchange, Barnes said. The federal health care law creates subsidies for people in lower income brackets who buy insurance through the exchange.

At the same time, several thousand people who are not currently eligible for Medicaid would be able to enter the system — mostly childless adults and parents who make too much at the state’s current income limit of 19 percent of poverty, or about $2,183 for a single person or $4,474 for a family of four. Under estimates included in Barnes’ proposal, that bump would add nearly 180,000 people to the state’s Medicaid rolls.

The proposal hinges on three waivers from the federal government, including one that would allow the state to access increased federal match rates through the Affordable Care Act. Barnes’ bill includes several triggers that would render it useless if the federal government doesn’t go along with the plan.

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

For Barnes’ plan to work, the federal government would have to agree to pay the higher rates for the newly eligible, even though the state would fail to cover everyone the new health care law specifies. U.S. Health and Human Services Secretary Kathleen Sebelius has come out against such proposals, but the issue hasn’t formally been decided.

Barnes said his plan received mixed reviews at the Capitol on Tuesday. He wouldn’t say whether any senator has offered to take up the proposal.

House Speaker Tim Jones, R-Eureka, said he doesn’t think the plan will make it through the Legislature this session.

“I look at this as — at a minimum — a two-year project,” he said. “We’re just at the very beginning of it.”

Nixon, who has traveled the state to promote his Medicaid expansion plan, said in a statement that he “will continue to work with the General Assembly to ensure we move forward, not backward — especially when it comes to covering children — and strengthen our health system in a way that gives working families access to basic health care and brings the tax dollars Missourians send to Washington back to create jobs here in Missouri.”

Others who have advocated the Democrats’ plan balked at Barnes’ bill.

“It covers fewer people and costs more money,” said Jay Hardenbrook, of the Missouri Budget Project, which advocates for social services spending. “This just doesn’t get us where we need to be.”

Aside from the eligibility shifts, Barnes’ proposal would eliminate fee-for-service Medicaid in Missouri and shift everyone to competitive managed care systems. About half of the state’s Medicaid recipients are currently under managed care plans.

The Barnes plan also would create several new options for Medicaid recipients, including which managed-care insurer to go through and whether they want high-deductible or prepaid co-payment based plans. The state would pay for either. All Medicaid recipients, at enrollment, would get electronic cards to track the health services they use, which would determine whether they receive cash in return for keeping expenses low.