Gov. Nixon voices support for Medicaid expansion

Posted December 6, 2012 at 12:42 pm

by Matt Evans, Eric Stoyanov and Nick Thompson

Gov. Jay Nixon announced his support for expansion of the state’s Medicaid program under the new federal health care law.

But his proposal for one of the state’s largest Medicaid expansions in history came under immediate attack from top Republican leaders.

At a series of news conferences across the state, Nixon pointed to the federal law that would provide full federal funding for the health care coverage of up to 300,000 recipients for the first three years.

After that, however, the state would have to begin picking up a part of the expense at a cost to the state’s budget estimated to exceed $100 million per year.

Republican critics, including the House Speaker and Lieutenant Governor, argued the state could not afford that cost. Nixon, however cited a University of Missouri study that predicts more than 24,000 jobs can be created in 2014 if the state takes part in the expansion.

While Republicans criticized Nixon’s welfare expansion proposal, a slight opening emerged for agreement.

The Republican-leaning Missouri Chamber of Commerce endorsed the expansion, and the Senate’s Appropriations Committee chair said he wanted to wait on a decision until he got more information from the administration.

“We support the expansion,” Chamber spokeswomen Karen Buschmann said. “While we do not support the Affordable Care Act, we are supporting this expansion as part of it. It is the law of the land. We do not feel that we should leave the federal money on the table.”

Under the Affordable Care Act, states must expand the Medicaid program to cover people with incomes below 138 percent of the federal poverty line. In upholding the federal law, the U.S. Supreme Court gave states the option to expand the program or not.

Under the expansion proposal, the federal government would foot the bill of expanding the program for the first three years. In 2017, the state would pay 5 percent of the costs and by 2020 the state would pay up to 10 percent.

“Congress passed it, the President signed it, the U.S. Supreme Court upheld it. It is the law of the land,” Nixon said during his series of news conferences in St. Louis, Kansas City and Springfield.

Nixon’s Republican critics charged the governor was expanding the state’s largest welfare program, which already costs Missouri $8 billion a year.

“Overwhelming majorities of the legislature are opposed to this and will not go along with a gigantic expansion of welfare,” Republican Lt. Gov. Peter Kinder said. “I think those that do support it in the legislature are overwhelmingly outnumbered and that it will not come to a vote in either the House or the Senate.”

House Speaker Tim Jones, R-St. Louis County, could not be reached for comment but said in a statement that he is concerned where the funding will come from for the Medicaid expansion.

“Now is not the time to put our state on the end of yet another big-government program that will only increase the burden on future taxpayers,” Jones said.

A study commissioned by the Missouri Hospital Association and the Missouri Foundation for Health predicts as many as 220,000 Missourians would be eligible for the expanded program. Other studies, however, project as many as 300,000 people would be eligible in the state.

According to the University of Missouri study, the federal government would pay about $8.2 billion through 2019 while the state would spend about $332.9 million and about $100 million per year after 2019 to cover new enrollees. A report released earlier this week by the Kaiser Family Foundation and Urban Institute projected the federal government’s cost at $17.8 billion and with the state’s share at $1.6 billion from 2013 to 2022.

Missouri hospitals are also advocating for the expansion, citing losses in federal payments that reimburse hospitals serving large numbers of low-income patients.

A provision of the federal health care law cuts Disproportionate Share Hospital Adjustment Payments (DSH) in half by 2020. Those federal payments go to hospitals that treat large numbers of low-income patients without health coverage. Missouri received the seventh highest DSH funding in the country in 2011.

Dave Dillon, a spokesman for the Missouri Hospital Association, said Missouri hospitals provide $1 billion worth of uncompensated care in any given year.

Dillon said without the expansion, some Missouri hospitals may suffer when the reimbursement payments are cut. The expansion would allow those low-income patients without insurance to enroll in Medicaid, making DSH payments obsolete.

“If they disappear or are substantially reduced and we don’t see an increase in Medicaid, or folks enrolling in an exchange, the hospital and health care infrastructure in the state will be significantly hurt by this,” Dillon said.