Commentary: Achieving Middle Ground on Medicaid in Missouri Still Possible

By Timothy McBride in the St. Louis Beacon, June 11, 2013 

The Missouri legislature closed its 2013 legislative session without resolving what was likely the most important question facing it: whether to adopt the proposal put forward by Gov. Jay Nixon, a Democrat, to expand the Medicaid program to a projected 260,000 uninsured people in Missouri.  While a bipartisan solution did not pass, the legislature appointed a committee to consider this question further. Recent signals suggest that a compromise solution could be found in the 2014 session.

It is imperative that the legislature and governor find a bipartisan solution to the problem of the uninsured. In Missouri, in 2011, the uninsured reached a record number of 877,000 people, according to the Census Bureau. Also this researcher has found that Missouri has experienced the second largest increase in the uninsured rate in the country over the last 12 years, rising from 6.6 percent in 1999 to 14.9 percent in 2011. This suggests that expanding Medicaid for the neediest should be a moral imperative.

Nixon proposed a sensible and straightforward expansion of Medicaid that would meet the guidelines laid out by the Affordable Care Act in January; it would have made Medicaid available for all people below 138 percent of the federal poverty line. The federal government would cover the entire costs of this expansion in the first three years (2014-16) and up to 90 percent of the expansion during the years 2017-19.

In response, Republicans in the state House proposed a logical counter-proposal (HB700) authored by state Rep. Jay Barnes, R-Jefferson City.  Unfortunately, even though the governor suggested that this proposal could be a vehicle for compromise, Republicans in the state Senate told Nixon that there was no possibility of passing Medicaid expansion this session.  What were the reasons for blocking the legislation and can this stalemate be broken?

Some legislators rejected Medicaid expansion because they say the state cannot afford it. One problem with this claim is that reasonable fiscal projections show that the costs of expansion would be more than offset by cost savings as some individuals in the new expanded program — financed almost entirely by the federal government — would have cost the state more if they had enrolled otherwise. In addition, the state will collect additional state taxes on the new federal dollars flowing into the state. The governor’s budget office estimates that the savings would in fact exceed the costs to the state by about $46 million in the first fiscal year alone.

Finally, the legislature passed a quite large $800 income million tax cut, which the governor vetoed. The legislature’s action, though, suggests that the idea that the state cannot afford to expand Medicaid is a weak argument.

A further benefit of Medicaid expansion is the economic activity created by the nearly $2 billion of new federal dollars, which has been estimated to create at least 24,000 new jobs in Missouri.

In arguing that no political consensus exists to expand Medicaid in Missouri, legislative leaders such as House Speaker Tim Jones, R-Eureka, argue that we “know where Missourians are on Medicaid expansion – they’re opposed to it. They’re opposed to Obamacare” because, these leaders argue, the voters twice voted “against Obamacare” in ballot initiatives in 2010 and 2012.

The fallacy is that both ballot initiatives were cast on very narrow parts of “Obamacare”: in 2010 on the “individual mandate” and in 2012 on the “health-care exchanges.” Neither initiative was on Medicaid expansion. Further, the 2010 initiative was voted on in a primary election with a very narrow turnout (less than 25 percent of voters, in contrast to the 66 percent turnout in the 2012 general election). In contrast, a statewide poll commissioned by the Missouri Foundation for Health found that a majority (52 percent) supports a Medicaid expansion.

If the argument against Medicaid expansion is weak, as this suggests, is there a compromise path? Barnes’ HB 700 would expand Medicaid to a lesser extent than envisioned by “Obamacare” (generally up to the poverty level, not 138 percent of the poverty level) and ask the federal government for a “waiver” to accept this, while also cutting children’s health coverage. Every analyst who has followed health reform knows that this waiver would be rejected by the Obama administration, and the additional cuts in eligibility would also not be accepted.  However, if a compromise is reached to raise the eligibility level to 138 percent of the poverty line, then a compromise is much more likely.

In addition, the proposed House legislation comes from a view that it would be irresponsible to expand Medicaid without “reforming” or “transforming” the program first or simultaneously.  Barnes’ bill includes a set of initiatives to achieve cost savings and improve care. It is in this area where common ground can certainly be found. Every reasonable analyst can agree that further reforms of Medicaid are possible, even though many analysts would disagree with the characterization of Medicaid as a totally “flawed” or “broken” program.

I am the chair of the MOHealthNET Oversight Committee, an 18-member committee, with most public members recommended by the governor and approved by the legislature. This committee, created during Gov. Matt Blunt’s administration, regularly reviews every aspect of the state’s Medicaid program.  In contrast to the view that the state’s Medicaid program is flawed or inefficient, delivering low quality care, the members sitting on the committee know that Missouri has a Medicaid program that delivers medical care on par with the rest of the health-care system (when it is understood that Medicaid is designed as a safety net to serve the neediest).

In addition, in recent years, Missouri’s Medicaid program has put in place many very good initiatives, which are improving quality for the recipients and saving the taxpayers’ money. If the legislature wishes to achieve efficiency and improvements in the Medicaid program, it should simply hold up a mirror to its own Medicaid program to find some very good ideas that can be expanded in many cases to broader populations. In addition, the program can look to other states for models of reform.

This is the common ground that Republicans and Democrats can reach either in a special session or early in 2014 to expand Medicaid so that the neediest Missourians are not forgotten. Nearly everyone who has looked at Medicaid can agree that some reforms would be acceptable. But they must be wrapped in a package that includes expansion of eligibility up to 138 percent of income for all people, as envisioned in “Obamacare,” bringing in significant federal dollars to Missouri and increasing economic activity.

Timothy D. McBride, a professor in the Brown School at Washington University in St. Louis, serves as chair of the MO HealthNET Oversight Committee, a public body that serves in an advisory role over Missouri’s Medicaid program.

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