State officials campaign against Medicaid expansion

Calling it an unnecessary burden on the state budget, Missouri Treasurer Scott Fitzpatrick and State Rep. Cody Smith are campaigning this week against an initiative to expand Medicaid eligibility in Missouri.

Amendment 2, also known as the Medicaid Expansion Initiative, will be on the statewide ballot Tuesday. A simple majority is required to pass the measure, which would amend Missouri’s constitution to give more people access to the Medicaid program.

Medicaid provides health insurance coverage to low-income people and individuals with disabilities. In Missouri, coverage is generally limited to those who are older than 65, people who are blind or disabled, and adults with dependent children with an annual household income at or below 22% of the federal poverty level.

The state currently receives reimbursement from the federal government amounting to about 65% of its Medicaid costs. If Amendment 2 passes, that percentage would reportedly increase to 90%, but opponents say state costs would increase because more people would be eligible for coverage.

“We have a balanced budget requirement in Missouri, so when we spend more money on Medicaid, we have to take it away from another state priority, and in this case it would be education most likely because that’s the biggest expenditure we have,” said Smith (R-Carthage), who chairs the Budget Committee in the Missouri House of Representatives.

“If we choose to expand Medicaid in Missouri, we are going to have to cut our state budget in other places, and I believe the more people understand that, the less likely it will be that it will pass,” he said.

Fitzpatrick echoed Smith’s concerns and said cost to expand Missouri’s Medicaid program will grow in the years ahead.

“When this Medicaid expansion proposal first came alive after the Affordable Care Act passed, or Obamacare, whatever you prefer to call it, the cost was about a billion dollars,” the state treasurer said. “Seven years later, in 2020, it’s about $2 billion. It’s doubled in seven years and the state share would be about $200 million. I would expect it will double again seven years from now.”

An expansion of the program, Fitzpatrick said, is not necessary.

“We already have very generous eligibility limitations for children,” he said. “If you have kids, your kids can be on Medicaid if you make under 300% of the poverty level in the State of Missouri. For a family of four, that’s $76,000, I think, right now.”

Proponents of Medicaid expansion, including the Missouri Hospital Association and several health-related organizations, say passage of Amendment 2 will help keep rural hospitals in the state open. Fitzpatrick disagrees.

“Rural health care is facing a lot of challenges with and without Medicaid expansion,” he said. “I don’t believe Medicaid expansion is going to be a silver bullet to solve the financial problems of rural hospitals.”

Financing rural health care is an ongoing focus for state government, Fitzpatrick said.

“Obviously, we want to maintain as many hospitals as we can, but we want to do it in a way that doesn’t wreck the state budget and cause us not to be able to fund our other priorities in state government, like K-12 education,” he said.

Although 37 states have approved expanded Medicaid programs, some, Fitzpatrick and Smith said, are now regretting it.

“Medicaid expansion has cost them more than they initially planned, so it’s leading to budgetary problems throughout the country,” Smith said. “I presume there are many residents in those states with expanded Medicaid that wish they had not (passed it).”

New York, Smith said, is one of those states.

“Gov. (Andrew) Cuomo blames their budgetary woes on their Medicaid program, specifically as it relates to the cost of expansion,” he said.

Passage of Amendment 2, Fitzpatrick said, could be detrimental to Missouri’s credit rating.

“Missouri is a state with a AAA credit rating,” he said. “Our neighbors to the east in Illinois are handing out IOUs instead of checks to pay their bills. They can’t fund their pension obligations, and yeah, they expanded Medicaid, but they have junk bond status. Their credit rating is in the toilet.”

If approved, Smith said Amendment 2 will put additional stress on Missouri’s budget, which, he said, is already strained due to the COVID-19 pandemic.

“We’ll be heading into the next legislative session with our hands full,” he said. “We’re facing as much as a billion-dollar shortfall at the state level. Gov. (Mike) Parson has made over a hundred million dollars’ worth of budget withholds from the last fiscal year so we already have a very difficult budgetary environment where we’re going to have to make a lot of difficult choices, and if we layer on Medicaid expansion on top of that, those budget cuts could get even deeper.”

The bottom line, Smith said, is “it’s not going to be a pleasant environment in Jefferson City when it comes to writing the budget in the next fiscal year if Medicaid expansion should pass.”

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