A partisan battle over Medicaid expansion in the House Budget Committee ended Thursday with a vote against spending $1.9 billion to implement the medical program approved by voters in August.
The arguments for and against a special spending bill that separated expansion costs from other Medicaid budget lines echoed the debates of past years – Republicans argued that it cost too much and would force cuts in other areas while Democrats contended that the state has plenty of cash and expansion would save money for state taxpayers.
The committee voted 9-20 against the spending bill that allocated $130 million of general revenue and $1.9 billion overall to expand coverage to households with incomes below 138 percent of the federal poverty guideline.
The vote came as the committee was working through proposed changes to the $34.1 billion budget proposed in January by Gov. Mike Parson. The full House will debate the budget in floor sessions next week.
Budget Committee Chairman Cody Smith, R-Carthage, argued the Medicaid program already costs too much and needs changes to control costs and streamline services.
“If we expand Medicaid without doing that we are simply pouring gasoline on the fire of problems that could come along due to increased spending,” Smith said.
The committee’s ranking Democrat, Rep. Peter Merideth of St. Louis, said the state’s share will be minimal and that the state has a healthy financial balance. Expansion will mean a healthier state, financial support for providers and a stronger economy as the federal support is spent, he said.
“We are being offered a false choice and a false narrative,” Merideth said. “We are acting like even this $100 million of general revenue is a fiscal crisis.”
Medicaid is a shared obligation of the state and federal government, but Missouri’s current program, called MoHealthNet, offers few services that are not required to participate in the program.
Adults with children and no other qualifying conditions such as a disability are covered only if their income is less than the family would receive in cash welfare benefits, $292 a month for a single-parent household with two children. No working age adults without children are covered unless they qualify for another reason.
Almost 1 million people are currently covered by the program.
Amendment 2, approved by voters last year, requires the state to offer coverage to approximately 275,000 people with annual incomes up to $17,744 for an individual and $35,670 for a family of four. But rather than settling the debate that has raged in the state since passage of the Affordable Care Act, Amendment 2 instead added a new layer of disagreement to the familiar debate.
Opponents cited the relatively close vote – 53 percent of voters supported Medicaid expansion – and the lack of a funding source for the state’s share. Proponents said that by approving the constitutional amendment, lawmakers were obligated by their oath of office to fund it.
The Missouri Constitution prohibits initiatives that require lawmakers to make new appropriations without also providing a source of money. The Western District Court of Appeals rejected a pre-election challenge to Amendment 2 because it did not explicitly require a new appropriation. Whether that was true would be determined when the amendment was implemented, the court said.
Republicans contend that if lawmakers do not appropriate specifically for the expansion, it cannot take place.
“If we want initiatives with appropriations, we need to be honest with the people and say where the money is coming from,” said Rep. David Evans, R-West Plains. “If they had drafted it, including what the constitution actually requires, it may not have gotten over that 50 percent mark.”
Democrats said that federal changes to Medicaid, including a boost in the federal share of the existing program for states that expand coverage, means that while the state may spend more overall, it will spend less from general revenue for Medicaid with an expanded program.
“Report after report, from state after state, is showing that this is the fiscally responsible thing to do,” state Rep. Maggie Nurrenbern, D-Kansas City.
Medicaid expansion means more access to health care statewide, Nurrenbern siad.
“We see our rural hospitals hanging on by their fingernails and asking, ‘please let us provide vital health care to our communities,’” she said.
Instead of separating it out to a standalone spending bill, the governor’s proposed $34.1 billion budget for fiscal 2022 wrapped the cost into existing Medicaid spending for appropriation purposes.
Overall, the budget proposal calls for $14.1 billion for Medicaid, including $2.7 billion in general revenue, according to budget documents. Medicaid in Missouri cost $10.8 billion in fiscal 2020, about 4 percent more than the previous year.
The general revenue cost of Medicaid, however, went down in fiscal 2020 because of changes in federal support due to the pandemic. And because of the pandemic, it is likely it will cost much less general revenue than Parson’s budget indicated.
The cost of the existing program is shared with the federal government, and for the current year, Missouri’s stated share is about 35 percent. Because of the pandemic, that share was cut to about 29 percent starting in March 2020 and that emergency support will continue through the end of the year.
For people enrolled under the expansion program, the Affordable Care Act sets the federal share at 90 percent.
The $1.9 trillion American Rescue Plan bill signed into law earlier this month by President Joe Biden included an incentive for the 12 states that haven’t expanded Medicaid coverage to do so. The federal share of the existing program would be increased by 5 percent, estimated to produce a savings for Missouri of more than $1 billion over the next two years.
Missouri already has a record budget surplus in the general revenue fund, which stood at $1.9 billion on March 1 and is expected to have $1.1 billion unspent at the end of the fiscal year. The federal stimulus bill also includes $2.8 billion in general support for Missouri state spending.
“Stop acting like we don’t have money because you don’t want to give health care to people,” Merideth said. “It is a lie and ignoring what Missourians told us to do.”
But Republicans said obtaining more federal funds will expand the national budget deficit and by refusing to appropriate the money, Missouri can help control federal debt.
“Are we willing to see the debt rise further?” said Budget Committee Vice Chairman Dirk Deaton, R-Noel. “Are we willing to take that vote, weaken our country at the expense of the Chinese and others?”