GOP Medicaid alternative supported in Mo. hearing

JEFFERSON CITY, Mo. -- A Republican alternative to President Barack Obama's envisioned Medicaid expansion won support Monday from Missouri medical and business groups, though some legal experts predicted it never would pass muster because it doesn't cover enough lower-income adults.

The GOP proposal in Missouri is one of several being pursued in states that seeks to reap the full financial benefit of Obama's 2010 health-care law without fulfilling all of its requirements.

Most notably, the plan put forth by Missouri Rep. Jay Barnes would add fewer adults to the Medicaid rolls than called for under the federal law, while still expecting the federal government to provide full funding -- something the Obama's administration has said it cannot do. Barnes' bill also would remove thousands of children from Medicaid, cover recipients through competitively bid managed care insurance policies and provide people cash incentives for holding down their health-care expenses.

The legislation "uses the leverage Missouri currently has with the federal government to transform Missouri Medicaid into the most market-driven system in the entire country," Barnes said Monday while outlining his bill to a House committee that he leads. He said the panel would vote next week on the measure.

Medicaid, which is jointly funded by the federal and state governments, already covers about one in five people in the U.S. Expanding it was one way Obama envisioned covering low-income workers who lack insurance.

As originally enacted, the Affordable Care Act required states to expand Medicaid to adults earning up to 138 percent of the federal poverty level, about $32,500 annually for a family of four. A Supreme Court decision last summer made the expansion optional for states but kept in place a powerful financial incentive: The federal government will fully fund the expansion for the first three years. The states' share will gradually increase to 10 percent by 2020.

One of the most contentious aspects of Barnes' bill is a section that would allow it to take effect only if the federal government provides the enhanced funding despite his proposal to cap eligibility at the current federal poverty level, which is about $23,500 annually for a family of four.

Missouri currently has some of the nation's most stringent criteria for Medicaid. Eligibility is capped at one-fifth of the federal poverty level for custodial parents -- an income of less than $4,500 annually for a family of four -- and doesn't cover single adults who are not elderly or disabled.

Representatives of medical clinics, hospitals and the Missouri Chamber of Commerce and Industry on Monday voiced support for Barnes' plan at the hearing.

Officials from those same groups have stood by Gov. Jay Nixon and other Democratic officials in recent weeks as they pushed for the full Medicaid expansion called for under the federal law. Those Democratic plans have been defeated by Missouri's Republican-led legislative committees.

Advocates for Medicaid expansion on Monday said the Republican alternative was better than nothing.

Covering adults up to the poverty level "is a dramatic change and improvement. It's something that is very encouraging," Pemiscot Memorial Hospital CEO Kerry Noble said.

But a pair of legal experts who testified later said Barnes' proposal is unlikely to receive federal approval.

"I realize the intent of the bill is to take advantage of the new federal money that is available, but an expansion up to 100 percent [of the federal poverty level] will not accomplish that. As a matter of law, this waiver will not be granted," said Sidney Watson, a Saint Louis University law professor who specializes in health law and health-care access for the poor.

That position was echoed by Joel Ferber, the advocacy director for the health and welfare unit of Legal Services of Eastern Missouri, which provides aid to low-income residents.

"The odds are very stacked against getting any of this approved," he said.

In December, Health and Human Services Secretary Kathleen Sebelius said states couldn't get full federal funding unless they expanded eligibility to 138 percent of poverty. But Barnes believes the federal government could reconsider that.

Some urged legislators Monday to quit quibbling over whether to expand Medicaid coverage to the poverty level or slightly above it, noting that the health care of thousands of people hangs in the balance.

"We're talking about this as an academic exercise. No, it's not -- this is life or death for these people," said John Orear, of Jefferson City, whose son has received treatment for bipolar disorder and substance abuse. "For God's sake, let's put politics aside."

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