Medicaid expansion
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Medicaid expansion

Date: November 4, 2009
By: Rebecca Beitsch
State Capitol Bureau

JEFFERSON CITY -- With several versions of federal health care bills requiring states to expand Medicaid, many Missouri officials say the legislation has the potential for an unfunded mandate and even has some calling to abandon the state's participation in Medicaid.

The U.S. House passed its version of the bill shortly after Gov. Jay Nixon announed $32 million in cuts to Missouri's Medicaid program. Both the House version and the version approved by the Senate Finance Committee would require a serious expansion of Missouri's eligibility rates for Medicaid.

Missouri has one of the lowest Medicaid eligibility rates of any state in the country, requiring a family of four to earn less than $4,400 a year for the parents to receive coverage. The Senate Finance version of the bill would require Missouri to expand it's eligibility from 20 percent of the Federal Poverty Level to 133 percent. Under these provisions, that same family of four could earn up to $29,326 and the parents would still qualify for Medicaid.

The most recent budget analysis by the Missouri Social Services Department estimated the cost to the state at about $91 million if the bill passes. Other estimates for the Senate Finance bill have been much higher.

"Ninty-one million is a lot of money in this budget climate," said Missouri Representative Chris Kelly, D-Columbia, the ranking Democrat on the House Budget Committee. "The question is: 'Are we willing to do something else to raise the money, like a cigarette tax, or will we consider massive cuts in other areas?'"

The $32 million in Mediciad cuts are just one part of the $634 million Gov. Jay Nixon has cut from the budget already this year. Both Nixon and State Budget Director Linda Luebbering said further cuts may be necessary.

"Even if it's $50 million, we can't afford it. Or if it's $20 million, we can't afford it. We don't even have $1 million for this," said Sen. Jason Crowell, R-Cape Girardeau. "We don't have $1 to put forth towards an unfunded mandate."

As the Senate Finance bill was written, the federal government would pay for 95 percent of Medicaid expansion costs, but Crowell isn't alone in his concerns that the federal government may not come through with funding.

House Budget Committee Chairmen Allen Icet, R-St. Louis County, said he's seen the federal government stop short with payments before.

"In my experience, unemployment insurance was also part of this, the federal government asked states to increase the benefit, and the the state would pay part of that," but two years later the federal government stopped paying their share, Icet said.

"I assume this would be the same," he added.

Others said they would have a hard time turning down such a good federal match. Currently, the federal government reimburses the state about 60 cents for every dollar it spends.

"The idea of getting 95 percent return on a five percent investment is a good deal," said House Democratic Leader Paul LeVota, D-Jackson County. But LeVota said he has concerns that the Republican-controlled legislature would not approve the expansion if there was any way to opt out of it.

"I think with the current makeup of the legislature and shortsighted view these guys have on health care, they would try to opt out of it," LeVota said. "I think they would try to opt out on $2 billion in assistance from the feds and covering 200,000 Missourians' health care for political reasons."

Senate Budget Committee Chairman Gary Nodler, R-Joplin, said he expects "strong support for opting out of this," in both the House and the Senate.

"I would say if there's an opt in we will probably not opt in," said House Republican Leader Steven Tilley, R-Perryville. "The last thing we need to do is expand and grow a program."

Many said their hesitancy comes from a belief that expanding the program will cost more than $91 million. An earlier report by the Social Services Department had estimated the cost of an expansion at somewhere between $316 and $338 million. Department spokesman Scott Rowson said that estimate was calculated before the federal government offered to pay 95 percent of the transition.

But, Crowell said, "I think it's without question an underestimation by the department because we don't know what the bill is going to be."

Even with the different estimates floating around, one obvious question that remains unanswered is the future of the economy. The Senate Finance bill is a phase-in plan that wouldn't require state contributions for Medicaid for a couple years.

"There are too many unknowns with what's going to happen with the economy, what's going to happen with our state budget, our revenues," said State Budget Director Linda Luebbering.

"Knowing right now what would happen three years from now if we have to cover those people, it's just not possible. And like I said, 'Could we afford right now?' No. We all know that; we just went through another round of expenditure restrictions. But can we afford it in 2014? I don't know."

Reporter Jeremy Essig contributed to this story.