Timing unclear for $5.3B bill to support Missouri Medicaid expansion, state pay raises

Gov. Mike Parson is in a hurry to get a $5.3 billion spending bill passed by Feb. 1, but exactly when the bill will reach the House floor for debate is uncertain.

The House Budget Committee spent about five hours Monday digging through the details of the bill that will fund Medicaid for the remainder of the year, give pay raises to state employees and distribute federal pandemic aid for schools.

At the end, Vice Chairman Dirk Deaton, a Republican from Noel who presided over the hearing, said he’s not sure when the committee will be asked to vote.

“I would tell you the timeline but I don’t even know it myself,” Deaton said to the committee as it adjourned Monday evening.

There are two rapidly approaching deadlines to pass the bill, one created by Parson for the pay raise and the other imposed by the needs of the Medicaid program.

In December, Parson proposed giving all state workers a 5.5 percent pay hike and to set a floor of $15 under all state jobs. The timing, state Budget Director Dan Haug told the committee, is so employees in state nursing homes, prisons and other facilities who will receive their last federally funded pandemic stipend on Jan. 15 do not see a reduction in pay.

It is also intended to help the state compete in a tight job market, he said.

“We are seeing quite a bit of turnover in all areas and we are getting to the point where if we see any more turnover we are not going to be able to operate our state facilities,” Haug said.

The other is that Medicaid will likely run short of money in mid-February if no additional funding is provided, he said.

“A month to two weeks before we run out of money, we have to start sending letters to providers that they are not going to get their full payment,” Haug said.

The pay raise will cost $72 million, including $41 million in general revenue, plus additional funds to cover retirement and other costs tied to wage rates. The Medicaid portion will cost $1.6 billion but will not require any general revenue.

Some of the extra costs are for expanding Medicaid eligibility to cover anyone aged 18 to 65 who has an income less than 138 percent of the federal poverty guideline. The cutoff is about $17,750 a year for a single person and $30,300 a year for a family of three.

But the $1.6 billion also covers costs unforeseen when the budget was originally written, such as increased costs for prescription drugs or hospital care for people already on the program.

Republicans holding the legislative majority have opposed expanding Medicaid eligibility under the terms of the 2010 Affordable Care Act for nearly a decade. 

After supporters went around lawmakers to put the issue on the ballot, which was approved by voters in 2020, Republicans continued to fight it, refusing to include funding in the current budget.

That sparked a lawsuit and a ruling from the Missouri Supreme Court that the initiative set eligibility standards for Medicaid and the state had no choice but to use funds already appropriated to provide care.

On Monday, there was no attempt to renew that opposition. Haug and representatives of the Department of Social Services told the committee that the money being requested is for all Medicaid services.

When the ballot measure passed, supporters expected about 250,000 people to enroll. 

The Parson administration began accepting applications on Oct. 1, and, as of Friday, 53,151 people have enrolled. There are another 69,000 applications pending, officials said.

Committee members spent far more time questioning the timing and need for the pay raise. Some Republican members questioned whether everyone working for the state, including those who sit at the top of agencies with large salaries, should receive the pay raise. Others questioned whether $15 an hour is the appropriate floor for state wages.

The question isn’t whether the pay raise is necessary, said state Rep. Scott Cupps, R-Shell Knob. The question is whether giving it to everyone is fair.

“Is this reality?” Cupps said. “Have you ever seen a starving dog? Have you ever seen a fat dog? Do they both need 5.5 percent more food to be in good shape?”

The tight job market and rapid turnover of state employees at all levels is the spur behind the pay hike, Haug said.

Turnover in state jobs was 26 percent last year, Haug said, and more than double that, 55 percent, for employees earning less than $30,000 a year. An employee earning $15 an hour would make $31,200 a year working full time.

For example, he said, the state has a prison, a Division of Youth Services and a state mental hospital in Fulton. There is also a Dollar General distribution center in Fulton where employees can make $17 an hour starting pay.

“We have the space and everything but the staffing to open a ward at (Fulton State Hospital) for people with behavioral health issues,” Haug said. “We are hoping the pay increases we are proposing would do that.”

About 8,800 state employees make less than $15 an hour, Haug said.

The bill also begins spending funds allocated by Congress last March in the American Rescue Plan Act. Those funds include $721.3 million for child care providers, including $444 million in grants to keep providers in business. 

There is also $1.9 billion for schools, most of which must be appropriated by March 24. Of that amount, 90 percent goes directly to local school districts.

The bill also includes $370 million rom federal coronavirus funds for a variety of programs, including $100 million for the State Emergency Management Agency for pandemic response and $12 million to supplement Victims of Crime Act funds distributed to domestic violence shelters, child advocacy centers and other victim services.

On Dec. 31, Parson allowed the state’s emergency declaration for the coronavirus pandemic to expire. The move came as the state’s hospitals were filling with patients sickened by the omicron variant and daily case totals were setting records.

That led state Rep. Peter Merideth, the committee’s ranking Democrat, to question why the state has not been able to respond to testing shortages. The state’s vendor for free at-home tests, which must be ordered, shipped and then returned for lab analysis, isn’t taking new orders until Wednesday and then only a limited supply will be available each day.

That plan is not working, Meredith said. 

“I have heard from people who ordered them in December who say they haven’t been shipped,” he said. “Buy tests and give them to local health departments for people to come pick them up.”

But until the bill is passed, Haug said, the State Emergency Management Agency does not have any spending authority to do that or any other significant move against the pandemic.