Mo. House panel backs Medicaid legislation

JEFFERSON CITY, Mo. -- A Republican-led House committee on Wednesday approved a plan to expand and remake Missouri's Medicaid program, but it may never take effect because it falls short of the demands of President Barack Obama's health care law.

The legislation would authorize a fivefold increase in Missouri's income eligibility thresholds for adults to qualify for Medicaid. Yet it would not go as far as Obama's administration has said is necessary for states to receive full federal funding for the Medicaid expansion.

The Missouri legislation contains an automatic self-destruction clause that would prevent it from taking effect if federal officials rule that it cannot qualify for the enhanced federal funding.

Nonetheless, Wednesday night's 7-2 vote by the House Government Oversight and Accountability Committee marked the first time that Missouri's GOP-led Legislature has embraced anything even resembling the Medicaid expansion envisioned by the 2010 federal law. The legislation still must clear another House committee to receive debate by the full chamber.

"This bill presents an opportunity to make Missouri a leader in Medicaid reform for the entire country -- to show other states how we can drive costs down and bring the savings we can achieve here nationwide," said Rep. Jay Barnes, a Jefferson City attorney who is sponsoring the Republican legislation.

The vote came on the same day that Democratic Gov. Jay Nixon took the unusual step of meeting behind closed doors with more than 100 House Republicans to discuss a Medicaid expansion. Nixon said he supports many of the market-based Medicaid proposals in the Republican plan, though he also stressed that it does not go far enough to qualify for full federal funding.

Medicaid is a joint federal and state program that provides health coverage to lower-income residents. The program's expansion was one of the key ways Obama planned to provide coverage for millions of Americans now lacking insurance.

At issue is a provision of the 2010 federal law that called for states to extend Medicaid coverage to adults earning up to 138 percent of the poverty level, about $27,000 annually for a family of three. States that do so can get full funding for the first three years, starting in 2014, then an amount that gradually decreases to 90 percent federal funding by 2020. A Supreme Court ruling last year made the expansion optional for states.

Missouri has one of the toughest adult eligibility thresholds in the nation -- denying coverage, for example, to a single mother of two children who earns more than about $3,700 annually.

Barnes' plan would expand adult Medicaid eligibility to the poverty level, which Obama's administration has said is not sufficient to trigger full federal funding. Before passing the bill, the House committee defeated a Democratic amendment that would have raised adult eligibility to 138 percent of poverty.

Barnes said Missouri should test the flexibility of the Obama administration.

"If they don't cooperate, we're not going to do it," he said.

Barnes' legislation would require the state to seek competitive bids from private insurers to offer managed-care policies to Medicaid recipients. Enrollees would have to make co-payments for medical services and could get cash incentives for holding down their health care costs -- for example, by avoiding hospital emergency rooms for routine problems that could be treated by a primary care physician. It also could shift thousands of children from the Medicaid program to government-subsidized private insurance policies that are to be available through online insurance marketplaces.

After meeting for more than 45 minutes with Republican lawmakers, Nixon told reporters Wednesday that he's open to Medicaid changes that require more "personal responsibility" and cash from participants and more competition among insurance plans. Nixon said he also supports efforts to lower costs through better coordination of care. But he stood firm on the need to cover adults earning up to 138 percent of poverty.

The governor used a fairy tale analogy to describe the prospects of passing a Medicaid bill following Wednesday's meeting with House Republicans.

"Under the ‘Three Bears' analysis, the porridge is a little warmer," Nixon said. But "we've got a lot of work to do, and we're a heck of a long way from the finish line."

Senate Majority Leader Ron Richard, R-Joplin, said Wednesday that lawmakers may need to create a special committee to study the issue further before the 2014 legislative session.

"I don't think anything is going to happen this year," Richard said.

------

Follow David A. Lieb at: http://www.twitter.com/DavidALieb .