Missouri Medicaid expansion: What is it and why is it being fought over in the courts?

What is Medicaid expansion?

Medicaid is the federal program administered by states that provides health coverage to low-income individuals and people with disabilities. It serves more than 1 million Missouri residents. The Affordable Care Act expanded eligibility for the program to those earning up to 138 percent of the federal poverty level, or $26,500 a year for a family of four.

A 2012 U.S. Supreme Court ruling allowed states to opt out of expansion, however, leading to debates in Missouri and in statehouses across the country. In states without expansion, individuals who make too much to enroll in Medicaid — but less than 138 percent of the federal poverty level — fall into a “coverage gap” where they don’t qualify for subsidies to help pay for health insurance.

Missouri voters approved an amendment to the state constitution last August requiring Missouri to expand eligibility beginning this summer. Up to 275,000 people were expected to enroll beginning July 1.

Who pays for it?

Expansion would cost Missouri an additional $130 million dollars a year. The federal government would pay $1.6 billion.

Under the Affordable Care Act, the federal government picks up 90% of the cost and states pay the remaining 10%.

The American Rescue Plan passed earlier this year provides additional financial incentives for states that have not yet expanded. Missouri could qualify for up to $1 billion in additional aid over the next two years, according to estimates.

What are the main arguments for and against?

Expansion supporters say health coverage is not only a moral imperative but a policy with long-term benefits, such as improved health for the previously uninsured. It will help financially-strained hospitals by reducing the amount of uninsured care they provide and could even pay for itself by decreasing the need for other government spending.

Opponents say the program could prove costly and creates a new, ongoing financial obligation. They also warn that the federal government could one day reduce or eliminate its share of the costs, creating a large burden for the state. They say individuals should instead be directed toward private insurance and that expansion could encourage healthy adults to not work.

If Missouri voters approved expansion, why is it being fought over in the courts?

The Missouri constitution says that only the legislature can direct the state to spend money, not voters via ballot initiative. Because the ballot measure did not include a source of funding for expansion, Republican lawmakers long opposed to the idea argued that the decision was up to them.

The GOP supermajority in the General Assembly dropped the $130 million in expansion funding — and gave up the federal portion— from Gov. Mike Parson’s proposed state budget. Parson, who opposed expansion but agreed to fund it after voters approved the ballot measure, scuttled the plan in May after lawmakers withheld the money.

Expansion advocates sued. Last month Cole County Circuit Jon Beetem agreed with lawmakers that the ballot measure infringed on their authority over spending. He wrote that under the Missouri Constitution, the public “may only spend or appropriate the revenues that they raise in the initiative. In other words, had the ballot question approved by voters included a tax increase to pay for expansion, it could have gone forward.

Expansion advocates appealed to the Missouri Supreme Court, which heard oral arguments Tuesday.

This story was originally published July 13, 2021 at 2:56 PM.