Under a provision in the Affordable Care Act (Obamacare), Missouri could extend Medicaid coverage to adults starting in 2014. If the Missouri legislature gave its approval, Medicaid eligibility would increase from the current 19 percent of poverty to 138 percent. This would reduce the number of uninsured by a quarter and extend coverage to about 267,000 currently uninsured in Missouri and garner about $1.56 billion in new federal dollars into the state’s economy in 2014.
Although it is reported that Medicaid expansion would impact every region of the state, the most dramatic impact would happen in rural areas. While there will be a reduction in the number of uninsured in the urban areas of St. Louis and Kansas City, there would be a greater reduction in areas like Southeast Missouri. There would be significant new spending in the state because federal dollars would cover almost all of the costs of Medicaid expansion. A full 100 percent of the costs would be covered for the first three years, with a gradual reduction to a still hefty 90 percent in 2020 and thereafter. The current federal match for the Missouri Medicaid program is 61 percent.
In 2014, the expansion is expected to bring $1.6 billion into the state’s economy, with a disproportionate amount going to the rural areas because that is where the greater number of new people who would gain coverage live. However, if Missouri refuses to implement the expansion, there will be a significant gap overall in insurance for low-income working Missourians.
According to a report, the state estimates that Medicaid expansion in Missouri would bring in approximately $13.7 billion in federal matching funds to the state from 2014 through 2021 and cost the state $806 million. Over that eight-year period, 95 percent of expansion would come from federal funds with the state’s share only 5 percent. Moreover, this relatively small contribution from the state would mean a 32 percent reduction of the uninsured in Missouri and would increase access to health care with better health outcomes.
Injection of these federal funds would bring substantial benefits to the state’s economy. There would be a need for more hospitals, doctors and pharmacists all over the state, with positive economic benefits for the state from these new employers and employees. Moreover, there would also be an increase in jobs in a wider range of professions.
Even the business community in rural and urban areas across the state is mounting unprecedented support because they understand the reality described in a report from Wells Fargo Securities that, “The federal government’s generous reimbursement for expanded coverage is indeed too good to pass up.”
A report from the Missouri Hospital Association and the Missouri Chamber of Commerce says that the cost of providing care to the uninsured would triple to $3.5 billion annually by 2019 if Medicaid expansion is not enacted. It said those costs would likely be shifted to businesses and individuals with commercial insurance policies, amounting to a “hidden health care tax.”
Governor Nixon supports the expansion in his proposed budget for this new fiscal year. Since the case for Medicaid expansion in Missouri is so compelling in other ways as well, why is the Republican leadership so adamant in their refusal to support this expansion? The fact is that the downside of the GOP’s choice to reject this federal offer will be harmful not only to the state, its health care providers and its economy, but to the thousands of low-income uninsured people whose health is in jeopardy.
To his credit, Governor Nixon has been tireless in taking his case directly to the public in response to the ideologically-driven, “small government” partisan GOP position—a stance that is detrimental to the interests of their base. One wonders if these same “principled” legislators will also reject federal support of highways and the National Guard. They have tied their hands politically and their recalcitrance threatens serious damage. They offer a flimsy excuse that is little more than a fig leaf to cover their rigid, fiscally irresponsible position.
The ongoing concern is that now-dominant, veto-proof Republican majorities in the legislature have effectively been taken over by Tea Partiers who keep more rational legislators in line with threats of extreme opponents in their primaries. Nevertheless, the issue does offer Democrats an opportunity to join Governor Nixon with an aggressive appeal to voters that pushes Medicaid expansion as good for the state’s budget and its people.
