GOP leader introduces an alternative to Obamacare

JEFFERSON CITY, Mo. -- After rejecting President Barack Obama's call to expand Medicaid, a key Republican lawmaker is rolling out a Missouri alternative that would knock tens of thousands of children out of the program, while adding some parents to the rolls and offering cash incentives for patients to hold down health-care costs.

The plan was introduced Tuesday by Missouri Rep. Jay Barnes and given a first reading. It is billed as a "market-based Medicaid" program that would require private insurers to compete to cover lower-income patients in the government-funded program. Barnes provided a draft of the legislation in advance of its formal filing.

The legislation includes a fivefold increase in the income eligibility threshold for adults to receive Medicaid coverage in Missouri, potentially adding about 180,000 people to the rolls, but it stopped short of the president's call to cover all adults earning up to 138 percent of the federal poverty level, or $32,500 for a family of four. The bill significantly pares eligibility for children to put them on par with their parents, removing from the Medicaid rolls about 44,000 children whose parents earn up to three times the federal poverty level.

Barnes is chairman of the House Government Oversight and Accountability Committee, which on Monday defeated a Democratic bill to implement the Medicaid expansion under the Obama-backed Affordable Care Act. Barnes' bill has a built-in advantage to advance because he is chairman. But it still faces several large obstacles. Barnes must solidify support of colleagues in a Republican-dominated Legislature where some members remain reluctant to do anything beyond rejecting the provisions of Obama's 2010 health-care law.

If the bill were to pass and gain the approval of Democratic Gov. Jay Nixon, Missouri would need to get federal approval for the eligibility changes, the cash incentives for patients and the switch to a competitive-bid-managed health care system. That could be a significant hurdle, since Obama's administration has said any state not raising adult Medicaid eligibility to at least 138 percent of the poverty level will not qualify for the enhanced federal funding allowed under the federal law.

If Missouri cannot get full federal funding for Barnes' plan initially -- and a 90 percent federal share in the future -- none of the changes would take effect.

"The Obama administration is going to have to retract its left-wing ideology, one-size-fits-all Medicaid system that doesn't work for either taxpayers or recipients and allow states to craft their own solutions," said Barnes, R-Jefferson City.

Missouri House Speaker Tim Jones called Barnes' legislation a "common sense conservative way to look at your Medicaid transformation." But Jones, R-Eureka, doesn't expect the bill to pass this year.

"I look at this right now as a two-year project, and we're just at the very beginning of it," Jones said.

House Minority Leader Jake Hummel, who sponsored the Democrats' defeated plan to expand Medicaid, said he hadn't been briefed by Barnes on his alternative proposal and was unaware of specifics.

But "I'm willing to work across the aisle to get something done," said Hummel, D-St. Louis. "It's too big of an issue to just let go and make it strictly a party-line position."

Missouri's Medicaid program covers about 879,000 children, custodial parents, pregnant women, disabled adults and senior citizens. The state uses a managed-care model in the St. Louis, Kansas City and central Missouri areas but otherwise pays medical providers on a fee-for-service basis.

Barnes' proposal would require private insurers to competitively bid -- based in part on the price of their plans -- to offer managed-care services throughout the state. Medicaid participants would have several insurers to choose from and could pick either a high-deductible plan or a co-payment plan. They would receive electronic benefit cards that would track their medical care, and they could receive cash incentives at the end of the year if they avoid costly medical bills.

Eligibility levels for adults and children alike would be set at the federal poverty level, which is $23,550 annually for a family of four. That would be a significant increase in Missouri's current income cutoff for custodial parents, which is around 19 percent of the poverty level. That would be a sharp decrease in the eligibility for children, who currently can gain coverage if their parents earn up to three times the federal poverty level, which would be $70,650 for a family of four. Eligibility thresholds would be reduced for pregnant women.

Barnes said his legislation could save nearly $928 million in eight years.

Nixon, who supports Obama's Medicaid expansion, had said more than 300,000 adults eventually could have been added to the rolls while the federal government pumps more than $2 billion annually into Missouri's Medicaid system.

The increased federal money is projected by Nixon's administration to result in increased tax revenue as medical providers would be assumed to employ thousands more people.