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Government, Politics & Issues

Once a vocal champion of Medicaid expansion, Nixon's now acting cautiously

This article first appeared in the St. Louis Beacon, Oct. 20, 2009 - When Jay Nixon stopped by a Columbia residence in November 2007, he wasn't shy about talking about expanding the state's Medicaid program.

At the time, Nixon, the longtime attorney general, was seeking to oust then-Gov. Matt Blunt from office. He opposed the Republican governor's decision to cut back the state's Medicaid eligibility.

"Fundamentally, Matt Blunt asked the wrong question when he became governor. He asked how do we slash health care to balance the budget?" Nixon said at the time. "In reality what you say is how do we get the most resources available to provide health care to the people in the state of Missouri."

Those words may now come back to haunt Nixon. Finally, after years of roadblocks and failures, Congress may provide Nixon with his best chance to achieve what is arguably the chief item of his gubernatorial campaign.

Congress is deliberating whether to expand minimum Medicaid eligibility to those earning 133 percent of the federal poverty level. That provision is present in several versions of federal health-care legislation. While the details differ, most observers agree that Medicaid expansion will be part of any final health-care bill.

It's a move that would open the health-care program to potentially thousands of people in Missouri -- going even further than what Nixon wanted when he barnstormed for governor. But instead of embracing the possibility, Nixon's administration is taking a wait-and-see approach. This week, he says he's been talking to federal officials about it.

"We just want to make sure that as they lead forward that they do so in a way that gives us the resources to accomplish that," Nixon said. "Governors across the country are very interested in expanding access to health care, but want to make sure the dollars are behind it. We're hopeful that it will be."

While Nixon hasn't officially endorsed the measure, some political supporters are embracing the provision as a way to deliver access to health care to more people. Prominent Republicans, however, predict the measure would be a budgetary disaster for the state.

One political scientist says Nixon is in an untenable position, caught between his campaign promise and the budgetary consequences of expanding Medicaid.

"I would say the governor is in a very difficult position politically," said George Connor, a political science professor at Missouri State University. "If he comes out in support of this because it fulfills a campaign pledge, he's not facing the tough economic choices. ... It's a really a pie-in-the-sky sort of response. He would be being fiscally irresponsible as the chief executive for the state of Missouri."

'THAT WOULD BE AWESOME'

Several Democratic lawmakers interviewed by the Beacon support Medicaid expansion. These legislators have been unsuccessful in their push to undo cuts made in 2005 -- stymied, they say, by Republicans who control the legislature.

"That would be awesome," said Rep. Don Calloway, D-St. Louis County, who added that lawmakers haven't showed the political will to expand the program. "Right now, you have to make five grand or less to be eligible. The incentive is to be unemployed or on welfare. At least, that way you can perhaps qualify for Medicaid. It's ridiculous."

Gov. Matt Blunt and the Republican majority in the legislature lowered eligibility for Medicaid in 2005. A family of three would have to make $3,504 a year -- or less -- to qualify for Medicaid. The Medicaid cap is 20 percent of the federal poverty level. (Children, seniors and the disabled qualify for coverage at higher incomes.)

This past legislative session, Gov. Jay Nixon tried -- and failed -- to raise eligibility to 50 percent of the federal poverty level. Nixon's proposal would not have increased taxes; instead it would have leveraged fees paid by hospitals to get federal funds. The proposal died in the Missouri House. At the time, state supporters predicted that the federal legislation would force the state to increase Medicaid eligibility.

If the federal provision passes, states would have to raise eligibility to continue to receive federal money.

In that case, the federal government would pay for some of the expansion's costs. Maria Speiser, a spokeswoman for U.S. Sen. Claire McCaskill, D-Mo., said in an e-mail that the Senate Finance Committee's bill requires the federal government to pay roughly 90 percent of the cost of expanding Medicaid eligibility from 100 percent of the poverty rate to 133 percent. The legislation, she said, also provides states with even lower eligibility standards, like Missouri, more help.

House Minority Leader Paul LeVota, D-Independence, said he supports the federal provision to expand Medicaid "because it covers people." He also said he hopes the federal government helps states fund the program.

"We saw here in the state of Missouri in 2005 when people were cut, our uninsured rate has gone through the roof," LeVota said. "And so, it's a practical solution to it."

Robin Acree is with the Mid-Missouri group Grass Roots Organizing; her group has pushed for the so-called "public option" in the federal health-care bill.

"We cannot continue to cut, cut, cut, cut, cut, and obviously pick on our most vulnerable population to pay for things," said Acree. "It's a good deal when the state only has to provide a minimal part of that and (gets) all of these federal dollars and stimulus, which creates jobs and all these things. We have to preparing to raise revenue in the state. Period."

Amy Blouin, the executive director for the Missouri Budget Project, said that, even if the state has to pitch in a percentage of the expansion cost, it's still "really cheap when you think about it."

"Medicaid is much less expensive than private insurance, too," Blouin said. "The cost will definitely be minimal."

'UNFUNDED MANDATE'

But governors, even Democrats, sounded alarm bells when the provision was first floated earlier in the year. Tennessee Gov. Phil Bredesen told The New York Times that the provision was the "mother of all unfunded mandates." Other Democratic governors -- including New Mexico's Bill Richardson and Washington's Christine Gregoire -- have also expressed concerns.

Also opposed are Missouri Republicans, including the two chairmen of the General Assembly's budget committees. House Budget Chairman Allen Icet, R-Wildwood, and Senate Appropriations Chairman Gary Nodler, R-Joplin, wrote Nixon to express concern.

"At a time when the state is facing a dramatic decline in revenue, we simply cannot afford an unfunded mandate," the letter stated. "If this legislation is passed, Missouri will be faced with two options: making drastic cuts to vital state services or by raising taxes significantly on Missouri's families and businesses."

House Majority Leader Steve Tilley, R-Perryville, said the federal government could renege on its promise to fund the Medicaid expansion. And Lt. Gov. Peter Kinder cited Bredesen's concerns in a conference call last week.

"He is a Democrat, he is a highly respected chief executive of one of our neighboring states, and I'm much more inclined to believe him and the other governors who have not signed off on this from all over the country," Kinder said.

Nodler and Icet's letter said that the Department of Social Services estimated that the plan would add around 200,000 people to Missouri's program at a cost to state of between $392 million and $454 million.

Scott Rowson, a spokesman for the Department of Social Services, said the more recently passed Senate Finance Committee version of the bill would cost the state around $91 million.

Rowson said the cost could change depending on how the provision is crafted in the final version of the bill.

NIXON TAKES CAUTIOUS APPROACH

Earlier this month, Nixon was criticized for not signing a governors' letter supporting the federal health-care effort. At the time, a Nixon aide said the letter did "not address the need to prevent unreasonable costs from being placed on the states, which Gov. Nixon believes is an important issue in federal health-care reform."

Earlier this week, Nixon added that he didn't want to sign onto any "pieces of paper" while he was still discussing the issue with high-level federal officials.

"Signing pieces of paper and signing letters for some type of political show is not what I'm doing," said Nixon

Not everybody was happy with Nixon's decision. Sen. Wes Shoemyer, D-Clarence, said, "I was a little disappointed."

"Any of us who have been in this business for any length of time at all knows that ... the letter was not necessarily about the details. ... That letter was about momentum and support for reform," Shoemyer said. "As Democrats, we really built our case of leadership in government on health care reform. And so, I probably would have signed the letter."

Calloway said he "respects the governor's concerns," because it's the governor's job to be "fiscally conservative." But he said the federal proposal is a "fiscally conservative measure."

Some Democrats are optimistic though that the budgetary impact won't be catastrophic. Calloway, for instance, said the state's budgetary numbers might be more stable when the provision goes into effect in a few years.

Rep. Chris Kelly, D-Columbia, said it's entirely possible that the final version of federal health-care bill may ratchet down the eligibility requirements -- if the measure passes at all.

"I'm not 100 percent sure that the bill that came out of the Senate Finance Committee will pass," Kelly said, adding that the Medicaid provision will probably be in the final version of any bill. "No matter where that is, that will result in an increase in Missouri's coverage because we're so low."

LeVota said it was proper for the governor to bring up the concerns about the Medicaid provision.

"I think the governor's concern on this is 'I want to do this. I just need to figure out a way to pay for it,'" LeVota added

.CHALLENGE FOR THE LEGISLATURE

While the Medicaid provision may put a new wrinkle in Nixon's political situation, it also will almost certainly force Republicans to rethink their stance on the issue of Medicaid eligibility.

Republicans have strongly opposed reversing the 2005 cuts on budgetary grounds. Most recently, most of the GOP in the Missouri House blocked a move to use increased tax contributions from hospitals to expand Medicaid for families.

If the GOP continues to control the General Assembly, the federal health-care bill could prompt Republicans to change their focus from Medicaid expansion to preparation for Medicaid's growth.

"The nature of the debate will change," Kelly said. "Because if Missouri does not do it, it will mean that we will lose all of our federal money. And no one could get away with doing that."

Ultimately, Connor said, Nixon is going to have to make some tough choices.

"If the governor wants to fulfill the campaign pledge and if he's going to commit to the way the [Medicaid provision] is going to come down ... then he's going to have to find a way to make cuts in other programs or raise taxes," Connor said. "Neither of those things is going to be easy to do because Missouri is already a low-tax, low-service state."

Jason Rosenbaum, a freelance writer in Columbia, covers state politics.

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