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GOP unlikely to expand Missouri’s Medicaid

Here’s how much Missouri Republicans oppose Obamacare.

GOP lawmakers are reluctant to spend one dollar in state money for every 19-plus dollars of new federal money if that means expanding Medicaid eligibility in line with the president’s health care overhaul.

The state has no extra money to spare, they say, so any expansion will likely result in cuts somewhere else, like education.

It’s a stance that’s not playing well with their hometown hospitals, though, who say they badly need more Medicaid dollars as money they get from Washington for caring for low-income patients starts to go away.

And now those hospitals are issuing a stark warning: Failure to act could result in some hospitals closing their doors for good.

“We’re trying not to be alarmists, but it’s going to be very fiscally difficult for hospitals if Missouri doesn’t get this done,” said Dave Dillon, vice president of media relations for the Missouri Hospital Association.

The federal health care law, known as the Affordable Care Act, calls for an expansion of Medicaid to cover millions of low-income residents who can’t afford insurance. The federal government would pay the additional cost initially, with states picking up 5 percent beginning in 2017 and 10 percent by 2020.

The expansion in Missouri would cover an additional 255,000 adults earning up to 133 percent of the federal poverty level. The first six years of Medicaid expansion would cost Missouri $431 million, but bring in an additional $8.4 billion in federal money, according to the Kaiser Commission on Medicaid and the Uninsured.

In June, the U.S. Supreme Court ruled that states could refuse to expand their programs, and since then Missouri lawmakers have repeatedly balked at the idea.

“The costs down the road are prohibitive, and I don’t think anyone believes revenue will improve fast enough to offset the costs,” said Ryan Silvey, a Kansas City Republican who has been chairman of the Missouri House Budget Committee for two years. He moves to the state Senate in January.

“I don’t get the sense there is much support in either the House or Senate for expanding Medicaid,” he said.

Others are even more adamant.

“The state of Missouri is not going to expand Medicaid in the fashion contemplated by Obamacare,” said state Rep. Jay Barnes, a Jefferson City Republican. “That’s not happening.”

But rejecting federal Medicaid dollars will likely result in a substantial financial hit for hospitals around the state, Dillon said. That’s because of a provision in the health care law that phases out federal payments to hospitals that serve low-income, uninsured patients.

Missouri hospitals expect to receive about $784 million in such payments in fiscal year 2013.

By expanding Medicaid, the number of uninsured people would go down, and thus there would be less need for that funding, Dillon said. So starting in 2014, when the expansion is supposed to kick in, those payments will begin being scaled back — whether a state expands its Medicaid eligibility or not.

The Congressional Budget Office projects payments will shrink by roughly 50 percent by 2020. Without that money, and without more patients gaining insurance through Medicaid, Dillon said hospitals that serve vulnerable populations would be put in a precarious situation.

“Virtually every hospital receives some level of funding through (the federal program),” Dillon said. “We’re looking at a situation where they will lose a huge amount of money but still have to provide services to the uninsured.”

That scenario would make it difficult for some hospitals to break even, Dillon said, “and you have to be able to break even to at least keep the doors open.”

The situation is similar in Kansas. A report issued by the nonpartisan Kaiser Family Foundation said Medicaid expansion would cost the state $166 million and bring in an additional $3.5 billion over the first six years.

Kansas Gov. Sam Brownback, a Republican, has not said whether he believes Kansas should participate, but he is a longtime and vocal opponent of the Affordable Care Act. Earlier this month Brownback announced that the state would not join with the federal government to establish a health insurance exchange — another feature of the federal health care overhaul.

Kansas Republicans have publicly voiced concern about expanding Medicaid. Many Democrats have also concluded it could be a mistake, arguing that Kansas can’t afford any additional spending after massive income tax cuts enacted earlier this year.

In Missouri, state House Speaker Tim Jones said earlier this month that there is little chance lawmakers will seriously consider Medicaid expansion.

“The state simply can’t afford it,” said Jones, a Eureka Republican. “We have enough trouble paying for (Medicaid) as it is. I’m not sure how we can pay for more welfare expansion.”

Gov. Jay Nixon, a Democrat, has remained noncommittal about the issue, saying he’ll reveal his decision when he releases his budget plan in January. His budget director, Linda Luebbering, said the process of laying out that budget has only just started.

Missouri can’t afford not to expand Medicaid, Dillon argued, and ultimately getting more people insured will save the state money in the long term.

“People with insurance tend to take care of themselves,” he said. “They are more likely to get care from their primary physician instead of emergency rooms. And if you look at the cost of health insurance, a reasonable portion is cost incurred by the insured to pay for the uninsured. We call it the hidden health care tax.”

Additionally, the expansion would bring billions of new health care dollars into the state, Dillon said, which would have a direct impact on local economies.

“If you look at the state’s economy through the recession,” he said, “the health care industry has been one of the most stable sectors.”

He pointed to recent reports showing health care spending has fueled construction in the Kansas City area, with $1.25 billion invested since 2009 in construction spending.

For Rep. John Rizzo, a Kansas City Democrat, the math is simple: Hospitals around the state will close if lawmakers fail to expand Medicaid. And with super majorities in both legislative chambers, Rizzo said the blame will fall solely on Republicans.

“If rural Missouri has hospitals shut down, that’s the Republican Party’s fault,” Rizzo said. “They have to look their people in the eye and admit that they did this.”

Silvey dismissed such dour predictions.

“Missouri doesn’t exist in a vacuum,” he said. “You’re probably going to see 30 states say they won’t expand Medicaid, and the most likely scenario is the federal government will have to revisit the entire plan. They’ll have to go back to the drawing board and come up with something that works.”

Dillon said he’s confident lawmakers will move forward with expansion once they begin to hear from hospitals in their districts.

“The election is over, and we’re going to have to deal with the fact that the Affordable Care Act is still in place,” he said. “It’s hard to say exactly where this debate is going, but the economics of it make sense.”