Health Forward Foundation

Ideas Proposed for Missouri Medicaid Expansion

INDEPENDENCE, Mo. – Missouri could draw down federal health-reform dollars while fully developing a medical safety-net system featuring alternative payment and care models, under an idea proposed here Wednesday at a Medicaid reform hearing.

“I know that everyone is looking for sort of a Missouri solution to this issue of Medicaid expansion and transformation,” said Andrea Routh, executive director of the Missouri Health Advocacy Alliance, testifying to a working group formed by leaders in the Missouri House of Representatives.

Missouri during the next couple of years, she said, could expand Medicaid eligibility to the level that would trigger a 100 percent federal match and then move the enrollees into a system with more cost controls and coordinated care in later years once the state began covering a portion of the Medicaid expansion’s costs.

The federal government is committed to covering 100 percent of the costs of newly eligible Medicaid enrollees until 2017 when some state match would then be required. By 2020, the state match would rise to 10 percent.

“Those are just some of the ideas we have been kind of tossing around in the consumer community,” Routh said, describing the concept.

But the idea didn’t seem to catch hold with key Republicans.

“I don’t know if I agree with that idea,” said State Rep. Jay Barnes of Jefferson City in a subsequent interview.

He questioned the need for a “glide path” to reform when managed care is already in place in parts of Missouri and in several other states.

State Rep. Noel Torpey, an Independence Republican, said he had similar reservations. The General Assembly has been unwilling to expand Medicaid without accompanying and immediate reforms, he said.

Routh said her idea did not preclude other reform ideas, such as charging premiums to Medicaid recipients at the upper end of income eligibility to pay premiums.

Torpey chairs the 50-person working group, which includes lawmakers, interest group representatives, and members of the public.

The group will file a report on its deliberations with a House committee that is expected to craft legislative proposals in advance of next year’s General Assembly session. Barnes heads the House committee.

The Senate has a similar panel working on Medicaid reform.

It kicked off its proceedings Monday in Jefferson City.

Torpey and Barnes said they expected to work closely with the Senate committee, but were unsure how the legislative process would unfold next year.

Wednesday’s meeting of the working group, which focused on payment and delivery systems, was the first of six meetings that Torpey said he plans to hold around the state before wrapping up in mid-August.

Under the Affordable Care Act, the federal government has agreed to pay the full cost of an expanded Medicaid program in states that increase eligibility to 138 percent of the federal poverty level.

That offer is good for years 2014 through 2016. After that, states would pick up some of the costs until reaching the 90-10 federal-state split in 2020.

According to data presented Wednesday by Brian Kinkade, acting director of the Missouri Department of Social Services, the Missouri Medicaid program had nearly 874,000 enrollees at the end of May. About 60 percent were children.

He said Missouri’s program cost about $7 billion in fiscal year 2012, with the federal government paying about 60 percent of that cost.

Officials in the administration of Gov. Jay Nixon, a Democrat and strong proponent of Medicaid expansion, have estimated that expanding Medicaid as envisioned by the 2010 health-reform law often referred to as Obamacare would open the program to about 270,000 more Missourians within the next two years.

The administration has estimated expansion would have a net positive impact of about $125 million on the state budget in 2015. The calculation includes a mix of new revenues and cost savings.

John Bluford, chief executive of Truman Medical Centers, also has been a strong proponent of Medicaid expansion. He testified Wednesday.

Truman is anticipating a continued squeeze, or “slippage,” in its budget from diminishing federal reimbursements and other federal cost-cutting initiatives, he said.

Truman has an annual operating budget of about $450 million and Bluford said about $10.5 million in cuts were made for the fiscal year that began July 1.

That included eliminating 50 positions and closing a psychiatric unit at Truman’s Lakewood facility.

Truman also might drop its status as a top-level trauma center, he said. That would save money and be a visible warning to the community of Truman’s financial plight.

The Medicaid expansion, he said, would help Truman’s bottom line by providing reimbursements for many patients currently unable to pay for care.

If the program isn’t broadened, Bluford said, “What is the fill back (for the budget)? What is going to compensate us for this slippage?”

Note: An earlier version of this story incorrectly described the type of potential charge Andrea Routh mentioned for Medicaid recipients.

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