As I See It

April 10, 2014

Chambers of commerce urge Missouri legislature to pass Medicaid expansion

“ Because Missouri has not yet opted to expand Medicaid, the number of uninsured Missourians has stayed the same while hospitals receive less money to care for them,” write business leaders Jim Heeter, Dan Mehan, Jim Anderson and Joe Reagan. “So who picks up the tab? In short, we do.”

One in five jobs in Missouri is linked to health care. Hospitals and clinics are among the largest job providers in most communities and a vital part of our state’s economy.

The industry is so robust that you may not have noticed that it has eliminated nearly 1,000 positions in the last six months and are implementing a hiring freeze on an additional 2,145 positions. Why?

The industry is facing $4 billion in federal funding cuts over the next five years. The 10-year effect of these cuts is equivalent to eliminating 5,000 jobs or nearly $2 billion in capital investments.

This might be reason enough for us to support Medicaid transformation in Missouri. Part of the reasoning behind the hospitals’ loss of federal funding is that more low-income Missourians were supposed to be covered by Medicaid expansion under the Affordable Care Act, thus reducing their uncompensated care costs.

But because Missouri has not yet opted to expand Medicaid, the number of uninsured Missourians has stayed the same while hospitals receive less money to care for them. So who picks up the tab?

In short, we do. Hospitals shift some of their uncompensated care costs to private payers, resulting in a “hidden health care tax” that businesses and individuals pay through higher premiums.

If Medicaid is not expanded in Missouri, an additional $1.1 billion is projected to shift to the private health insurance market from 2012 to 2021. If you think this is unfair to businesses and workers, consider the fact that Missouri has an opportunity to receive $2.2 billion annually by 2022 through Medicaid expansion to insure more low-income individuals and reduce the cost-shift to private payers.

Missouri businesses and individuals pay federal taxes and deserve to see their hard-earned money returned to Missouri, not sent to one of the 25 other states expanding health coverage while they are left with a higher tab for uncompensated care. The cost of inaction is clearly high.

But what if Missouri does accept federal funding and transform Medicaid? The University of Missouri estimates that an additional 22,000 jobs would be created by 2020, increasing labor income by $5 million.

We’re not economists, but that certainly sounds better than doing nothing and eliminating 5,000 jobs. And what about the health and productivity of our workforce?

Insured workers miss half as many work days as uninsured workers. Three out of four uninsured Missourians are in a working family.

In fact, a single working mother of two earning $10 per day (not per hour) makes too much to qualify for Medicaid coverage in Missouri. Helping her, and about 300,000 other low-income Missourians gain health coverage, would help improve the health, stability and productivity of our workforce.

We hope by now you can see why this issue is so important to more than 65 chambers of commerce, business organizations and municipalities across Missouri. Medicaid transformation is a smart business decision for our state and its taxpayers.

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