Gov. Nixon backs expanded Medicaid; GOP leaders say no way

JEFFERSON CITY, Mo. -- Breaking months of silence on the subject, Democratic Gov. Jay Nixon on Thursday embraced a broad expansion of Medicaid health care coverage for working adults. His support was met with immediate criticism by Republican legislative leaders.

Nixon had remained noncommittal during his recent re-election campaign about the multi-billion-dollar Medicaid expansion called for under President Barack Obama's health-care law. But Nixon said that he had analyzed the plan since the Nov. 6 election and concluded that expanding Medicaid to an estimated 300,000 additional people was "the smart thing" and "the right thing to do."

Republicans reacted with resounding disapproval.

House Speaker Tim Jones said Nixon's proposal probably will be dead on arrival in his chamber. Sen. Tom Dempsey, who is in line to become Senate president pro tem, said it's "very unlikely" that Republican lawmakers would approve a plan that encourages "an ever-expansive federal government."

Under a Supreme Court ruling earlier this year, each state can decide whether to expand Medicaid to adults earning up to 138 percent of the federal poverty level, as allowed under the federal law. The federal government would pay the full cost beginning in 2014, but states would have to begin paying a 5 percent share in 2017 that gradually would increase to 10 percent by 2020.

Nixon vowed to "work tirelessly" to persuade lawmakers that the Medicaid expansion makes sense financially and would improve the health of thousands of their constituents.

"If we take a pass on billions of health care dollars -- dollars that come out of Missourians' paychecks -- that money will go to some other state. They'll get the benefit, and we'll get the bill," Nixon said in a conference call with reporters. "That's not smart, and that's not right."

Cost estimates for the proposed Medicaid expansion have varied greatly. Nixon's administration still is working on those numbers.

A report released Wednesday by the Missouri Hospital Association and the Missouri Foundation for Health estimates a Missouri Medicaid expansion would cost the federal government $8.2 billion and the state $333 million between 2014 and 2020. A report released this week by the Kaiser Family Foundation and Urban Institute projected the federal government's cost at $17.8 billion with the state's share at $1.6 billion from 2013 to 2022.

Republicans said that's more than either the deficit-plagued federal government or the budget-crunched state government should be spending. "I have grave concerns about the affordability of it," said Senate Appropriations Committee Chairman Kurt Schaefer, R-Columbia. "It's a massive expansion of a welfare program" that he said could reduce the money available for other priorities such as public schools.

Republican Lt. Gov. Peter Kinder, who has challenged the federal health-care law in court, accused Nixon of trying to "hoodwink the voters" by waiting until after the election to announce his support for the Medicaid expansion. He called it "a radical, unaffordable agenda that will break the bank in Missouri."

Missouri's Medicaid program has one of the most difficult to meet eligibility standards in the nation for working adults who are neither disabled nor senior citizens. It provides coverage only to custodial parents who earn no more than 19 percent of the federal poverty level, or $3,627 annually for a single parent with two children. Children are covered for families earning up to three times the federal poverty level, with a premium that gradually fades to zero for those earning less than 1.5 times the poverty level.

The proposed Medicaid expansion would not change eligibility levels for children. But that same parent of two could gain Medicaid coverage with an income of up to $26,344 annually. The plan also would extend Medicaid coverage to adults with no children.

Missouri's Medicaid program covered 883,656 adults and children as of October.

Nixon's administration projects that additional 260,000 adults would enroll in Medicaid as a result of the eligibility expansion, and an additional 30,000 children would be enrolled as their parents became aware of the program.

Others have made significantly different projections.

The hospital association's report estimated an additional 161,000 people would enroll in Medicaid because of the eligibility expansion. The Kaiser foundation's report estimated that 383,000 people would join Missouri's Medicaid rolls because of the expanded eligibility, and an additional 103,000 would gain Medicaid coverage because of other provisions in the federal health-care law.

The study, released by the hospital association, estimated that the increase health-care spending would lead to 24,000 jobs across the state, generating additional taxes that could more than offset the state's costs. House Minority Leader Jake Hummel, D-St. Louis, cited the study's findings Thursday while praising Nixon's announcement.

If Missouri does not expand Medicaid, hospitals could take a financial hit. Their federal payments for treating the uninsured are set to decline under Obama's health-care law on the assumption that hospitals would gain more money as more people are covered by private insurance and Medicaid.

Republican legislative leaders said they understand the potential financial crisis facing hospitals, but they are reluctant to jeopardize Missouri's finances.

"It is not free money. It is borrowed money coming from the federal Treasury that we're going to pay for somewhere down the line -- our taxes will go up federally, our taxes will go up in the state. The burden will be on the budget," Jones said.