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Parsing Medicaid Expansion in Missouri Issue Set for Vote on Tuesday

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5 minute read

On Tuesday, voters in Missouri will decide if the state will become the 38th in the country to expand its Medicaid program. The expansion could cover more than 200,000 Missourians currently ineligible for the program, a majority of whom are working adults. 

For years, the idea of expansion was bandied about in the Missouri General Assembly to no avail. But a group of health care and business organizations, physicians and patients raised more than $10 million and gathered enough votes to put the issue on the August ballot. 

Opposition and support for expansion is strong and both sides have data to back their positions. Here’s what you need to know before casting a vote on Tuesday.

The basics

Medicaid is a state-based program that provides health insurance to low-income and disabled individuals. The program covers about 20% of Americans and pays for a majority of the nation’s long-term care costs. 

When the Affordable Care Act (ACA) was passed in 2010, the legislation enabled states to expand Medicaid coverage to higher income adults. It increased the qualifying guidelines to 138% of the federal poverty level, about $18,000 for an individual per year. (The median previously was about 40%, or $8,500 for a family of three).

Two years later, the Supreme Court issued a ruling making Medicaid expansion optional instead of mandatory.

As a result, states that did not expand Medicaid now had a gap in affordable health care coverage for adults. Low-income individuals could pay for insurance in private state marketplaces, but they were left out of the federal subsidies which helped make the plans financially attainable.

“When they created the ACA, they didn’t envision that states would be able to decide whether or not to expand Medicaid,” said Dave Dillon, spokesperson for the Missouri Hospital Association. “It became a patchwork of states passing Medicaid and over time all but 13 did.”

Missouri’s Medicaid program has some of the tightest income restrictions in the nation. Adults without children are basically ineligible for the program unless they are disabled. Parents must earn $5,550 or less a year to be eligible. 

The approximately 900,000 people on the program in Missouri now are mainly children. Adults on Medicaid are low-income pregnant women, people with certain types of cancer, seniors in long-term care facilities or individuals who are seriously disabled. 

By the numbers

There are a couple of challenges with deconstructing the potential effect of Medicaid expansion in Missouri. First, there is no way to tell if newly eligible people will enroll in the program, and if they do, what they will cost the system. Second, it’s easy to play with the numbers. 

For instance, most proponents say about 250,000 newly eligible Missourians could be covered. These numbers are likely based on a report released by the Center for Health Economics and Policy at Washington University in St. Louis, which found that a likely scenario is that 315,000 people would be eligible, of whom about 73% would sign up. 

The report also gave upper and lower estimates of how much the state could gain or lose. Their best estimate was that it would save the state about $39 million the first year. If more people sign up and patients’ costs are lower than anticipated, it could save closer to $95 million. If fewer people join and their health care usage is higher, it could cost the state almost $42 million. The report authors said expanding the program has the potential to save the state $932 million by 2024.

Groups that oppose expansion, like the Foundation for Government Accountability, estimate the program’s growth could cost as much as $349 million a year. The group argues that numbers like those from Washington University are based on assumptions, the unknown. 

“That’s a considerable sum, especially in today’s economic climate,” said Jeremy Cady, state director for Americans for Prosperity-Missouri. “There are some disparities on what the total impact and cost will be.”

Learning from others

The best way to understand the potential impact of expansion may be to look at the experience of other states. 

A recent report by the Commonwealth Fund outlined the issues by determining savings. First, there is a “sticker price” each state pays for expansion. The authors said states that expanded Medicaid will pay more than $7 billion total in 2020. The median cost for a state is about $100 million. 

The actual fiscal impact, however, includes savings in other parts of Medicaid, savings outside of the program and taxes on increased economic activity.

For instance, McClain Bryant Maclin, director of policy and strategic initiatives at the Health Forward Foundation, said groups have projected expansion could create about 16,000 jobs. About 80% would be in sectors like retail, government and construction; 60% would be in rural communities.

In Colorado, an estimated 31,000 jobs were added during the first 18 months of expansion. After that, job gains tend to taper, according to the Colorado Health Foundation.

The Commonwealth report found expansion states had about 4% reductions in traditional Medicaid spending between 2014 and 2017. Estimated savings outside of the program varied significantly. The report authors concluded that most states have been able to raise enough to offset their costs or save some money.

The three main areas states appear to gain outside of Medicaid after expansion are substance use and mental health, corrections and uncompensated care.

For instance, some states have been able to cut funding to programs for medically indigent populations or other medical care as those groups moved onto Medicaid. Most expansion states also save money on health care for prison inmates. Colorado’s largest reduction in general fund spending after expansion was $10 million that previously paid for inpatient hospital care for uninsured inmates now covered under Medicaid.

None of the states that have passed Medicaid expansion have opted out of the program to date. 

Other considerations

The main argument for Medicaid expansion is bettering the health of low-income adults, but it may also improve the condition of the health care system. 

The potentially newly covered cohort is a major contributor to hospitals’ uncompensated care, Dillon said. In 2018, uncompensated care accounted for $1.5 billion, of which a “significant portion” could be wiped out if Medicaid were expanded, he said. 

Rural hospitals are hit particularly hard by uncompensated care. Since 2014, when expansion was made available to states, Missouri has seen 10 rural hospitals close, Dillon said. There is no direct line of causation between closings and expansion, but rural hospitals tend to have low levels of commercial insurance, and higher levels of uncompensated care and Medicare and Medicaid patients. 

This group of adults is also more likely to receive episodic, expensive treatments in the emergency room, rather than less costly preventive care. Putting off treatment because people are “caught in the gap deciding whether to pay for a car payment, food, housing and other necessities over health care,” tends to lead to poorer health outcomes, Dillon said. 

Two final groups that could benefit from expansion are mothers and children. Low-income pregnant women are currently covered by Medicaid. But if it expanded, they would have access to primary care at other times – potentially gaining access to treatments including depression screening and smoking cessation, which can reduce adverse health outcomes during pregnancy. 

Expansion states have seen a 50% reduction in infant mortality rates when compared to nonexpansion states, according to a report from the Georgetown University Health Policy Institute Center for Children and Families. This is particularly true among black infants, a higher risk group where expanding Medicaid appears to also reduce preterm birth and low birth weight.

“The segments of the population that are disadvantaged are the first in line to benefit from Medicaid expansion,” said Bryant Maclin. “It’s the frontline essential workers, people who lost jobs due to COVID-19 and expectant mothers would be able to get earlier maternal care.”

Tammy Worth is a freelance journalist based in Blue Springs, Missouri.


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