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Health & Wealth Update
Wed June 11, 2014
Where Missouri stands on Medicaid expansion
By now Missourians are familiar with the debate over expanding Medicaid in the state.
The Affordable Care Act gives most people the opportunity to purchase health insurance with help from federal tax credits. But individuals earning too little to qualify for these tax credits but too much to be covered under for Missouri Medicaid are stuck in what is called “The Gap.”
And that’s where these Missourians are likely they stay until the legislature resumes the debate on Medicaid expansion next year.
But some important details regarding changes to Medicaid happened near the end of this year’s legislative session.
State lawmakers readily passed a bill that will increase some of the benefits low-income adults receive under Medicaid. The bill allocated about $48 million to provide dental coverage, a benefit that was cut in 2005. Legislators also assigned almost $20 million to cover the costs of physical, occupational and speech therapies.
While this bill seems to be a cautious step toward expansion, Governor Nixon continues to campaign for more. At an appearance in April, Nixon said lawmakers’ inaction is causing taxpayers to miss out on federal benefits.
“Here in Missouri, so far, we’ve stood still,” Nixon said. “And as a result, our tax dollars are going to other states and we’re falling behind. Quite frankly, they’re getting the benefit, we’re getting the bill.”
These federal benefits would come in the form of coverage for the 300,000 Missourians who could receive healthcare if the state expands Medicaid. Under the Affordable Care Act, the costs for every new individual added to Medicaid under the expansion will be completely paid for by the federal government until the year 2016. Starting that year, the federal government's portion of Medicaid costs will begin to phase down until it reaches 90 percent in 2020. This rate does not apply to the individuals who are currently covered under Medicaid in Missouri. The state will continue to pay 40 percent of their costs.
The actual benefits or disadvantages of this system are still up for debate.
“A lot of people are under the impression that Medicaid expansion is a budget buster,” said Brendan Cossette, Director of Government Affairs for the Missouri Primary Care Association. “It’s not, it would actually save the state hundreds of millions of dollars.”
The Missouri Primary Care Association is an advocacy group for primary healthcare services. Cossette’s argument that the state will actually be saving money is common among politicians and lobbyists in favor of expansion. But there is statistical evidence to support these claims.
Many of these reports come from the Kaiser Family Foundation, a non-partisan organization that provides information and analysis on healthcare issues.
“We reviewed a lot of these state specific estimates on the impact of the Medicaid expansion,” said Laura Snyder, senior policy analyst with the Kaiser Family Foundation. “In general, they tended to show that the Medicaid expansion would generate increased state economic activity and also generally had a positive effect on jobs and earnings.”
But that doesn’t guarantee that Missouri will see these savings.
According to a Kaiser Family Foundation report from 2013, Missouri will spend 2.7 percent more on Medicaid when you take into account savings on the cost of uncompensated care.
Whether this 2.7 percent will actually bust the budget is something that lawmakers will have to decide during the next legislative session, which starts in January 2015.
The United States and Medicaid expansion
A 2012 Supreme Court decision determined that states are not required to expand Medicaid despite it being a requirement when the Affordable Care Act was passed in 2010. This map shows the percent of uninsured people in each state before the ACA (based on data from an October 2013 Urban Institute report) and how those numbers will change when the ACA is fully implemented. As you can see, whether a state plans to expand Medicaid factors into how much that number decreases.
In an earlier version of this story, it was incorrectly reported that the federal government would pay 100 percent of costs for individuals new to Medicaid until the year 2020. It will actually pay 100 percent of these costs until the year 2016.