Missouri would benefit from Medicaid expansion

Sunday, February 10, 2013

By Steven C. Bjelich

Lawmakers in Missouri have a rare opportunity in the coming months to positively affect the lives of hundreds of thousands of state residents when they discuss expanding the state's Medicaid program. Medicaid, which provides health insurance to low-income individuals and families, is a program of shared responsibility by the federal and state governments.

Medicaid expansion became a highly- charged political issue last June with the Supreme Court's ruling on the Patient Protection and Affordable Care Act (PPACA). The Court gave individual states the responsibility of deciding whether to expand Medicaid.

Should the Missouri Legislature vote to expand the program in a move favored by Gov. Jay Nixon, the federal government would provide an estimated $8.2 billion to fund the cost of enrolling people newly eligible for Medicaid. Rejecting the expansion would mean forfeiting those federal funds -- a portion of which are paid by Missourians -- and making them available for other states' expanded Medicaid programs. Gov. Nixon, a Democrat, likely will face resistance from Missouri's Republican-controlled legislature on this subject in the next session.

Medicaid normally requires states to put up matching funds before the federal government contributes its share. Under health care reform law, the federal government will pay the full cost of enrolling people newly eligible from 2014 to 2016, and then gradually scale back its contributions until they reach 90 percent in 2020 and thereafter. This compares to the current average federal share of 57 percent.

An expanded Medicaid would cover people who earn up to 133 percent of the federal poverty level, which equates to approximately $14,900 for an individual or $25,400 for a family of three. Passing on this opportunity would generate significant consequences for multiple sectors of the economy.

Residents under the income threshold would not be eligible for subsidies provided to low-income people through the new health insurance exchanges and likely would remain uninsured. Missouri's hospitals already fund an increasing amount of uncompensated services to the uninsured, with the $1.1 billion in uncompensated care in 2011 representing a 22.5 percent jump in one year.

Hospitals currently receive federal assistance through the Disproportionate Share Hospital (DSH) program for care provided to the uninsured. The new law will cut $3.4 billion from those payments in Missouri on the assumption that more people will have health insurance. Without Medicaid expansion, the health care industry will face additional uncompensated care pressures on top of cuts to Medicare and private insurance reimbursements. That is a financial hurdle some hospitals, especially those in rural areas, may not have the resources to survive.

The health care sector is an important part of our regional and state economy, employing nearly 13 percent of Missouri's nonfarm workers. Medicaid expansion in the Southeast Missouri Workforce Investment Area would generate an estimated 24,000 jobs in 2014, with a potential cost shift savings of $1 billion to private insurance through 2020 because of fewer uninsured patients.

Medicaid expansion is a complicated subject, and we at Saint Francis Healthcare System are sharing this information in the spirit of encouraging informed conversation. We believe Medicare expansion is the right thing to do for our low-income residents, and it is the right thing to do for Missouri's economy.

Steven C. Bjelich is the president and chief executive officer of Saint Francis Healthcare System in Cape Girardeau.

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