Nixon attracts national spotlight as Missouri lawmakers prepare to battle over Medicaid
This article first appeared in the St. Louis Beacon, July 3, 2012 - Gov. Jay Nixon, a Democrat, already is under pressure from Republican legislators who vow to oppose any expansion of Missouri’s Medicaid program, as called for under the federal Affordable Care Act, which was largely green-lighted last week by the U.S. Supreme Court.
But now, he’s a target on his left flank as well.
On Monday, Nixon’s photo was prominently displayed on MSNBC’s “The Ed Show” along with a half-dozen Republican governors – including Rick Scott of Florida and Bobby Jindal of Louisiana -- who already have pledged to block any Medicaid expansion in their states.
Host Ed Schultz boomed that the collective group, including Nixon, was set to deny insurance coverage to more than 8 million residents in just their states – even though the expansion would be covered entirely by federal money until 2017.
Nixon was the only Democrat singled out.
A Nixon spokesman said Tuesday that he was unaware of any new national notoriety. But in any event, press secretary Scott Holste emphasized that the governor was saying nothing beyond his statement last Thursday, shortly after the court’s ruling:
“We’re just now beginning to review this ruling so that we can understand exactly what it means for Missouri,” Nixon’s statement said. “This ruling has significant complexities and implications for families, health-care providers and insurers in our state. Here in Missouri, I'm committed to working collaboratively with citizens, businesses, medical providers and the legislature to move forward in a way that works best for families in our state.”
The public spotlight on Nixon stems largely from the powerful roles that he and other governors will play in determining the success or failure of one of the Affordable Care Act’s key provisions – the expansion of Medicaid to cover adults and families who earn up to 133 percent of the federal poverty level (about $30,000 a year for a family of four).
But in Missouri, as in many other states, the governors need legislative approval to proceed because Medicaid spending is part of the state budget. And many legislative leaders, including the next House speaker – state Rep. Tim Jones, R-Eureka – have made clear they won’t go along.
The opposition’s reasons are as much, maybe more, philosophical – a belief in small government – than they are budgetary or financial.
That is why the Republican-controlled General Assembly blocked a modest effort by Nixon and the Missouri Hospital Association back in 2009 to expand Medicaid coverage to include almost 35,000 low-income parents, at no cost to taxpayers.
That earlier expansion was to be covered by the association, which could collect federal matching money.
That effort came just months before details trickled out about the likely larger Medicaid expansion to be mandated under the federal health-care changes being considered by Congress. Approved in 2010, the expansion’s penalty was the one piece of the Affordable Care Act to be changed by the Supreme Court.
The original provision would have called for states to forgo all of their federal Medicaid funding should they fail to comply with the expansion. Under the high court’s ruling, non-participating states would lose only the additional federal funding that would cover the expansion.
Still, the federal money at stake is hefty. For Missouri, the federal payments to cover the expansion amount to close to $6 billion over the first three years, according to state Budget Director Linda Luebbering.
The state’s cost? Zero.
By 2017, Missouri would begin paying a small portion -- $100 million of the almost $2 billion annual cost. That payment would amount to five percent of the total cost.
By 2022, the state’s share would increase to 10 percent – or $247 million annually, Luebbering said.
But even those numbers overstate what would actually come out of Missouri general revenue, which covers most state programs.
Because Missouri also collects money from providers and pharmaceutical companies to help pay its share, the state’s actual increase in general-revenue spending for the proposed Medicaid expansion would begin at only $60 million in 2017 and increase to an estimated $146 million in 2022, Luebbering said.
The state's general revenue spending would cover 60 percent of the state's share, with the rest covered by pharmaceutical companies and providers, Luebbering explained.
The general-revenue figures are much lower than the numbers that some Republican legislators opposed to the expansion have been using, when referring to the state's share.
Missouri’s bulging Medicaid rolls, rise in uninsured
For three years, even before Congress’ final action, Missouri officials and lawmakers have known that the Affordable Care Act’s proposed Medicaid expansion in Missouri would be dramatic.
Since the 2005 cuts approved under then-Gov. Matt Blunt, Missouri now has one of the lowest Medicaid income restrictions in the nation. In 2011, a family of four could have an annual income of no more than $4,104 to qualify. (The children would still be covered under a more generous separate Medicaid program, but the parents would not.)
Despite such strict guidelines, almost 900,000 Missourians – about one in seven – still qualify for MO HealthNet, the state’s Medicaid program.
According to the Missouri Hospital Association, if the state complies with the federal expansion, that number would grow by 2014 to include close to 400,000 additional Missourians – increasing the participation to one in five state residents.
The Nixon administration says the increase would be smaller. Luebbering said social-service staffers estimate that about 255,000 uncovered adults would be added under the Medicaid expansion sought by the Affordable Care Act.
Missouri government would pay no additional money until 2017, when state payments would be phased in. Eventually, by 2022, Missouri would cover about 10 percent of the cost.
State Rep. Ryan Silvey, R-Kansas City and chairman of the House Budget Committee, said on KMOX radio Monday that the added expense would eventually force Missouri to make cuts in other programs or raise taxes. Silvey, who is running this year for the state Senate, said he wasn’t willing to do either.
Silvey also echoed other Republicans who contend that the federal government shouldn't be proposing expansions in Medicaid when federal spending is still outpacing income, resulting in more debt.
Earlier this year, Missouri legislators blocked an effort by the Nixon administration to use $50 million in already-approved federal funding to cover improvements needed in the state’s computer system that handles Medicaid. The administration said the computer upgrades would help the state handle the existing Medicaid caseloads, with or without the federal expansion.
But Republicans were largely unconvinced, wary that the improvements might be a first step in a march toward unwanted Medicaid expansion.
The opposition to the expansion appears strongest among rural lawmakers, although federal and state figures, made available by the Missouri Hospital Association, show that many rural Missouri counties have the highest percentage of their population on Medicaid.
In St. Louis, about 20 percent of the residents are uninsured and about 21 percent are covered by Medicaid.
But in rural southeast and south-central Missouri, the percentage of residents on Medicaid are as high as 28 percent in some counties.
Even with such high Medicaid participation, an increasing number of Missourians has no insurance coverage at all – often because they earn too much under the state’s strict guidelines.
The latest figures indicate that close to 20 percent of Missouri residents are uninsured. The proposed Medicaid expansion is projected to cut the uninsured rate to less than 8 percent.
Hospitals support expanded coverage
The Missouri Hospital Association, which represents 153 hospitals around the state, is trying to stay out of the political fight in Jefferson City. But Mary Becker, the association's senior vice president for strategic initiatives and communications, said hospitals could soon be in dire straits if something isn’t done to ease the financial strain caused by treating rising numbers of people who show up in the emergency rooms without insurance.
Since the 1980s, hospitals have been barred under federal law from turning away people who show up for treatment.
In just two years, from 2008-2010, Becker said Missouri hospitals saw a 30 percent increase in “charity cases” – people who show up for treatment without insurance. During that same period, the hospitals also saw a 15 percent increase in patients who failed to pay their bills, she said.
Overall, in 2010, Missouri hospitals provided close to $1 billion in uncompensated care, she said. The 2011 figures are still being compiled, but Becker said she expects the tally will be even larger, totaling over $1 billion.
(Click here to review the details of the association's report.)
Such costs help explain why national and state hospital groups have generally supported the Affordable Care Act’s Medicaid expansion. It would mean far more people would show up at the hospitals with coverage.
But in exchange, the act also makes cuts in reimbursement rates. Becker said that hospitals were willing to accept the cuts, if more people were covered because the costs could balance out.
If the cuts are still made, but Missouri doesn’t expand Medicaid, Becker said “the result will be devastating” for hospitals all over the state.
In addition, she added, more coverage is better for patients. “People who don’t have insurance wait until their condition is pretty bad before they come in for treatment,” Becker said.
Such delays mean that medical treatment will likely need to be more extensive – and expensive – than if people came in earlier. Delayed treatment also can be riskier for the patient’s health.
Becker also cited some national statistics that indicate expanded insurance coverage could produce economic gains in the participating states.
The hospital association is still reviewing the situation. "We don't know what, when and how we will move forward until we have a bit more time to evaluate," Becker said.
While emphasizing that the association is not taking a political stance on the Medicaid issue, Becker observed that politics may well dictate what happens in the state Capitol. “The majority of published opinions appear to point to a holding pattern until the presidential election," she said.
Becker also reflected on Nixon’s dilemma. “It doesn’t seem to me that the governor is going to take any action that would rile the General Assembly,” she said. “Even if he was able to, I’m not sure that he would.”