Medicaid expansion


In his state of the state speech on January 15, Missouri Gov. Mike Parson said that Missouri cannot afford to expand Medicaid, but a new report released by Missouri Foundation for Health suggests that he is mistaken.

In his speech, Parson responded to a ballot initiative to expand Medicaid in Missouri, which the Republican-dominated Legislature has refused to do. “Make no mistake about it,” Parson said. “The vague proposal they are not explaining or purposely withholding is a massive tax increase that Missourians cannot afford.”

That proposal will be on the August 4 ballot as Amendment 2. It would expand Medicaid for persons 19 to 64 years old with an income level at or below 133% of the federal poverty level. The ballot language says that the state would incur “one-time costs of approximately $6.4 million and an unknown annual net fiscal impact by 2026 ranging from increased costs of at least $200 million to savings of $1 billion.”

The Missouri Foundation for Health report suggests the positive side of that gigantic fiscal range is what to expect.

According to economic projections by the nonpartisan independent organization Regional Economic Models, Inc. for 2022-2026, Medicaid expansion would increase the state economy of $2.5 billion in economic output and $1.6 billion in gross domestic product and result in a rise in state personal income of $1.1 billion.

This would be due to a projected increase of 16,330 jobs, with 63.7% occurring outside the metro areas of Kansas City (KC) and St. Louis (STL) combined, and 79% occurring outside of the health care industries. The majority of the newly created jobs would pay well above minimum wage, according to the report, with 87.8% in industries paying real wages of at least $15 per hour to full-time workers.

“The impacts would be spread throughout the state and generally not concentrated in KC and STL, though 56% of the hospital jobs would be created in one of the two cities because their major hospitals attract patients from other parts of the region,” the report concludes. 

“While the most significant impact of Medicaid expansion would be a rise in health care spending, the total economic effects would be spread across many industries, with most new jobs created outside of health care, including retail, construction, and government.”

As is the case with all states, the federal government would pay 90% of the ongoing cost of Medicaid expansion in Missouri. Had Missouri acted before a sunset date, the federal government would have covered all of the costs.

“This report makes a very strong economic argument for Medicaid expansion,” said Ryan Barker, vice president of Strategic Initiatives at Missouri Foundation for Health. “To say nothing of the moral imperative to get more people covered under health insurance, especially during a pandemic.”

More than 500,000 Missourians have filed for unemployment since March 2020, as businesses close and workers lose their jobs, furloughed or have their hours cut. The loss of a job for many people also means the loss of health insurance. Medicaid expansion ensures that more low-income individuals and parents can get health coverage during the pandemic and economic recovery.

“Whether you live in a state that has expanded Medicaid or not, you’re paying for it through your taxes, you’re just not getting the benefits if your state isn’t participating,” said Missouri Foundation for Health Vice President of Health Policy Sheldon Weisgrau. “Instead of bringing our tax dollars back home, currently we’re sending our money to California, New York, and other states that have already chosen to expand their Medicaid programs.”

To read the report, visit

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