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Nixon and Republicans inching toward possible Missouri Medicaid expansion

Updated: 2013-04-04T02:54:57Z

By JASON HANCOCK and STEVE KRASKE

The Kansas City Star

— Gov. Jay Nixon hopscotched across the state for months trying to line up public support for adding 300,000 uninsured Missourians to Medicaid.

Yet each time the issue has come before lawmakers, the Republican supermajority rejected it.

On Wednesday, he made his case directly to those very lawmakers. They didn’t sign on to his plan, but something in the middle looks to be taking shape.

For the first time as governor, the Democrat met with the entire House GOP caucus for nearly an hour Wednesday. He emerged optimistic that Republicans will come on board with a middle-ground idea for expanding the public health insurance program for the poor — a key component of the federal Affordable Care Act commonly known as Obamacare.

The final product might not be exactly what he envisioned when the legislative session began in January, but Nixon said the end result would be the same: More Missourians would have affordable health insurance, and millions of dollars in additional federal funds would come to the Show-Me State.

“Under the ‘three bears’ analysis, the porridge is a little warmer,” Nixon said shortly after his meeting with the GOP. “But we’ve got a lot of work to do. We’re a heck of a long way from the finish line.”

The first hurdle was cleared hours later, when a House committee approved the Republican alternative to the full expansion. Although Nixon said he can’t support the bill in its latest form — most notably because it adds far fewer people to Medicaid than the federal law demands — he is happy to see it creep forward.

Medicaid already covers about 880,000 people in Missouri, about one in every seven residents. Coverage is available to children whose families earn three times the poverty level, about $58,600 annually for a single mother of two.

Yet that mom cannot get Medicaid coverage for herself unless her income is less than about $3,700 annually. And adults aren't eligible at all in Missouri unless they have children, have a disability or have reached retirement age.

The 2010 federal health care law called for states to extend coverage to adults earning up to 138 percent of the poverty level, or about $27,000 annually for a family of three. States that do so can get full funding for the first three years, starting in 2014, then the federal government will gradually reduce its contribution to 90 percent by 2020.

Nixon and Democrats have pointed to numerous studies arguing that the increased Medicaid funding would inject millions into the state’s economy and create thousands of new jobs. But Republicans have expressed concerns about the long-term costs both to the federal and state governments.

The GOP alternative would only expand eligibility to those whose earnings are at or below the poverty level, remove thousands of children from Medicaid, cover recipients through competitively bid managed care insurance policies and provide people cash incentives for holding down their health care expenses.

Rep. Jay Barnes, a Jefferson City Republican, insists that the federal government has the authority to grant Missouri a waiver allowing it to receive the additional federal funds without fully expanding the program.

“This bill provides Missouri with the opportunity to be a leader in Medicaid reform for the entire country,” Barnes said.

Rep. Kevin McManus, a Kansas City Democrat, pointed out that Health and Human Services Secretary Kathleen Sebelius has repeatedly said states couldn’t get full federal funding unless they fully complied with the national law. That’s why he was one of two lawmakers to vote against the bill in committee.

Joining him in opposition was Rep. Mark Parkinson, a St. Charles Republican who said he could not support the bill because of an ideological opposition to the federal health care law. Three times, he said, voters in his district have rejected Obamacare. The first was a ballot measure in 2010 on the individual mandate. The second was last fall’s ballot measure on health insurance exchanges. The third was a vote against President Barack Obama’s re-election.

“They’ve spoken on this issue,” he said, “numerous times.”

Parkinson’s opposition could mean Republicans would need Democratic votes to get any Medicaid bill to the governor’s desk. That possibility has many lawmakers — along with the governor — looking for solutions in Missouri’s neighbor to the south.

Arkansas shares some similarities with Missouri. It is led by a second-term Democratic governor and a heavily Republican legislature. Expansion was considered unlikely there, too, until Republicans suggested re-inserting the private sector back into Medicaid.

Arkansas proposed enrolling those newly eligible for Medicaid into health care exchanges. Those Arkansas residents would then purchase subsidized private health coverage just as other consumers do.

Analysts said the twist on Obama's idea would allow Republicans to expand Medicare in a way different enough to avoid any charge that they were signing off on Obamacare — which the party has roundly criticized — but still let the state tap into a flood of federal health care dollars.

Nixon specifically mentioned the Arkansas plan in a statement he issued Wednesday following his meeting with the House Republican caucus.

“Here in Missouri we do things differently than they do in Washington,” Nixon said, “and how we approach health care should be no exception.”

Arkansas Gov. Mike Beebe flew to Washington and met with Sebelius about the idea. On Monday, Sebelius sent a letter to Beebe in which she twice referred to the Arkansas approach as “innovative,” although she did not completely sign off on the idea.

“I would like to express our interest in the innovative approach,” Sebelius wrote.

Said Beebe: “Basically, (Health and Human Services) has agreed to give us about everything that we asked for.”

On Monday, a Senate committee in Arkansas signed off on the plan and sent it to the full Senate. The Arkansas House also has yet to pass it.

Several states, including Florida, Ohio, Louisiana, Maine, Oklahoma and Pennsylvania, are considering the Arkansas idea.

But some conservatives around the country are criticizing the new idea.

“There is no ‘there’ there,” said Ed Haislmaier, health policy analyst with the conservative Heritage Foundation. “There's nothing new, there's nothing different, there's nothing special. There's no deal, there's no partial expansion, there's no increased flexibility. Whatever they think they're doing, it isn't anything different from (Obamacare).”

Concerns also have arisen about cost. The Congressional Budget Office has said that recipients buying private insurance would pay about $9,000 per person per year compared to the $6,000-a-year cost for Medicaid.

That's because private insurers pay hospitals and doctors far more than Medicaid does.

The Missouri Chamber of Commerce, which has backed the Medicaid expansion idea from the start, endorses the Arkansas approach.

“We're supportive of any measure that brings the system closer to what would seem to be a more market-based approach,” said Brendan Cossette, director of legislative affairs with the chamber.

Kevin Stamps of the Missouri Medicaid Coalition, which has pushed for expansion, said the group doesn't have a position on the Arkansas approach. Neither does the pro-expansion Missouri Hospital Association.

“We're trying to stay very open-minded,” said spokesman Dave Dillon.

In Kansas, Medicaid expansion has made little progress, even as lawmakers are getting set to adjourn for a month at the end of this week.

Republican Gov. Sam Brownback largely has been mum on the issue. Lawmakers meanwhile have added language to the proposed state budget stipulating that Medicaid could not be expanded without legislative approval.

A Kansas House committee also has passed a resolution opposing expansion of Medicaid, but the measure has not been acted on by the full chamber.

Meanwhile, state officials have been looking at ways to develop their own solution, possibly similar to Arkansas.

In Missouri, Nixon said even though there are only six weeks left before the General Assembly adjourns for the year, plenty of time remains for an expansion bill to pass.

But Senate Majority Leader Ron Richard, a Joplin Republican, told The Associated Press on Wednesday that lawmakers might need to create a special committee to study the issue further before the 2014 legislative session.

“I don't think,” Richard said, “anything is going to happen this year.”

The Star’s Brad Cooper contributed to this report. To reach Jason Hancock, call 573-634-3565 or send email to jhancock@kcstar.com. To reach Steve Kraske, call 816-234-4312 or send email to skraske@kcstar.com

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