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Cost remains central concern in Missouri Medicaid expansion fight

Voters will decide Aug. 4 on Amendment 2
Posted at 6:48 PM, Jun 22, 2020
and last updated 2020-06-23 16:45:17-04

KANSAS CITY, Mo. — Missouri voters will decide the fate of Medicaid expansion Aug. 4 at the polls.

Healthcare for Missouri, a coalition of more than 250 groups that support a constitutional amendment to expand Medicaid in the state, announced additional support Monday from 13 national patient-advocacy groups for Amendment 2.

Erica Terry, executive director of the Susan G. Komen Foundation Kansas and Western Missouri, said her organization is among those groups who support Medicaid expansion in the Show-Me State.

Echoing the battle cry of the Black Lives Matter movement, Terry called Medicaid expansion a matter of repairing inequality in access to health care.

"We feel very strongly that there's no way possible we can achieve our mission of ending breast cancer forever if that doesn't mean everybody," Terry said.

Skyrocketing unemployment because of COVID-19 has left many Missouri residents without jobs or health insurance in recent months, highlighting the growing need for health care coverage and better access to health care.

The Missouri Chamber of Commerce, the American Heart Association, the American Kidney Fund and the American Lung Association are among the other groups calling for the state to expand Medicaid.

It’s about “increasing access, increasing screenings, getting people back to health,” Terry said. “But most importantly, ensuring there's equity across everything in our community.”

Amendment 2 would make all adults in Missouri ages 19 to 65 whose income is 133% of the federal poverty level or below eligible for Medicaid.

It also would prohibit the state from imposing additional restrictions on newly eligible Medicaid recipients and requires the state to seek the maximum amount of federal funding for Medicaid expansion.

The Affordable Care Act, which passed in 2010, directed states to expand Medicaid coverage to adults with incomes up to 138% of federal poverty guidelines, but Missouri resisted the change.

Pockets of resistance to expanding Medicaid in Missouri still remain.

United for Missouri and Americans for Prosperity of Missouri believe the proposal would be a financial risk for the state.

"The myth of free federal money is just that,” Ryan Johnson, senior adviser with United for Missouri, said. “We're going to be on the hook for a significant amount of money. And if, and I agree it's an if, that money ever went away because of the federal deficit ... then Missouri would be constitutionally obligated to make up the entirety of the cost for expanding Medicaid.”

So how much would Medicaid expansion cost Missouri? A policy analysis by the Institute for Public Health at Washington University in St. Louis, projects that passage of Amendment 2 would actually save the state money.

If the savings materializes and how much money the state would save depends on how many people who are eligible take advantage of Medicaid expansion.

Missouri pays $3.245 billion annually for Medicaid in the state, receiving a 65% reimbursement from the federal government under the status quo.

If Missouri were to expand now, the federal government would pay for 90% of the cost of expansion.

According to the Health Management Association report, other states that have enacted Medicaid expansion have offset the 10% cost of adding people to Medicaid rolls by synchronizing programs and matching initiatives.

“Early evidence from multiple states indicates that expansion has a positive impact on state budgets; due to the increased federal match available for expansion populations, some states have even realized net cost savings,” according to Washington University's Analysis of the Fiscal Impact of Medicaid Expansion in Missouri.

Based on Washington University’s study, if Medicaid expansion had occurred in 2020 and added 315,000 people to the publicly funded medical insurance program, Missouri would have saved nearly $40 million.

Furthermore, Washington University’s analysis shows Missouri’s expected cost for Medicaid increasing nearly 20% to more than $4 billion per year by 2024 without expansion.

With expansion, the study suggests Missouri’s cost would decrease by 2.8% over the next four years with Medicaid expansion in place.

The Missouri Budget Project projects even higher savings for the state, estimating that Medicaid expansion could save Missouri $235 million a year.

The federal government faces a deficit of $26 trillion, exacerbated by CARES Act expenditures to help states and businesses manage the COVID-19 pandemic.

According to United for Missouri, projections from some Missouri legislators show that the state could have to pay $200 million if the federal government reduces Medicaid funding in the future but the state remains constitutionally obligated to pay for the expanded coverage.

Other projections show a possible savings of up to $1 billion.

Missouri Gov. Mike Parson, who opposes Medicaid expansion and has overseen a purge of Medicaid rolls in Missouri, initially put Medicaid expansion on the November ballot before moving it the August ballot.

Amendment 2 also survived a pair of legal challenges.

The final decision now comes down to Missouri voters.