Should Mo. adopt Ark.'s Medicaid model?

In 2013, Missouri legislators put the brakes on Medicaid expansion in the Show-Me State. However, an approach championed by the state of Arkansas to use money available through the Affordable Care Act to purchase private insurance for qualified residents might be changing lawmakers’ attitudes about the so-called tainted federal funds.

Arkansas was granted a waiver from the Department of Health and Human Services in 2013 to purchase private insurance for those who qualified, and last month, the state of Iowa was approved to secure funds for households at the federal poverty level. This past week, Gov. Jay Nixon renewed a call for Medicaid expansion and pointed out Illinois and Kentucky also are developing plans to garner their share of federal dollars.

With other states that snubbed Medicaid expansion now considering alternative models, a national government-focused publication has pegged Missouri among states expected to implement their own expansions.

Governing magazine listed Missouri among five states likely to develop a plan to garner federal dollars in 2014. Last year, Missouri was one of 20 states that opted not to expand its Medicaid program, costing the state an estimated $2.2 billion a year, according to the Kaiser Family Foundation. Under the new law, the federal government is paying 100 percent of states’ costs to cover Medicaid enrollees in households up to 138 percent of the federal poverty level through 2016, according to KFF.org, with its contribution declining to 90 percent by 2020, where it will remain.

The plans created in Arkansas and Iowa dedicate Medicaid funds toward private insurance purchased on the state’s health marketplace exchange by eligible beneficiaries based on income levels also up to 138 percent of the federal poverty level.

According to Governing magazine, Missouri is likely to make a change – despite conservative opposition in a legislature dominated by Republicans – because of strong support by the business community and by one young Republican: Rep. Jay Barnes, R-Jefferson City. A recent analysis conducted by Barnes determined Medicaid expansion funds, even after Missouri is obligated to cover a full 10 percent of the cost, should bring in an additional $42 million to the state annually, according to a St. Louis Post-Dispatch opinion-editorial calling for change.

Brendan Cossette, director of legislative affairs for the Missouri Chamber of Commerce and Industry, said Medicaid expansion in Missouri is possible in 2014.

The Missouri chamber, which represents some 3,000 businesses across the state, considers Medicaid expansion funds an economic driver for businesses large and small.

“Our 6 million Missourians are paying for Medicaid expansion throughout the country. It doesn’t make a whole lot of sense for a taxpayer in Springfield or Nixa to send their dollars to Washington and then for those to get shipped off to Delaware, California or Michigan and then not get them back,” Cossette said.

He’s optimistic that a bill proposing to secure Medicaid dollars could gain the support of Republicans after the legislative session starts on Jan. 8.

“I will tell you as someone who works with these guys quite a bit, I am much more optimistic about getting Medicaid expansion passed through this year than last year,” Cossette said. “Health care is up there with the biggest employers in most rural areas. Sick people aren’t going away. But the funding mechanism that the federal government has to take care of the uninsured is going away. If we don’t expand Medicaid, then sick people are still going to be showing up, and local providers aren’t going to be in a position to absorb those costs.”

Mercy Hospital Springfield President Dr. Robert Steele said Missouri’s decision to rebuff the Medicaid plan cost the local health system $10.5 million in federal reimbursements.

He said more people need to be insured, and it doesn’t matter if that occurs through Medicaid expansion or more private insurance purchased with Medicaid dollars. That’s because the government is cutting funding to hospitals that see a disproportionate share of underinsured or Medicaid patients. The ACA, which was written to require state expansion with federal support, changed in 2012 when the Supreme Court ruled states could choose not to expand Medicaid. In southwest Missouri, Steele said there are a disproportionate number of those on Medicaid.

The bottom-line impact for Mercy Springfield Communities has directly affected hospital operations, Steele said, as Mercy is not currently filling nonclinical positions that come open.

However, he’s not overly optimistic a plan with strong bipartisan backing is on the horizon.

“I haven’t been getting a lot of warm and fuzzies thus far from the legislature that there will even be a solution,” Steele said.

If lawmakers can’t produce an expansion plan in 2014, Missouri Hospital Association spokesman Dave Dillon said rural hospitals could be particularly hurt.

Dillon said Missouri hospitals currently cover about $1 billion per year in uncompensated care. Add another $1 billion in estimated Medicare cuts from the unpacking of the ACA, and that could be enough to shut down some struggling or dependent systems.

“It is absolutely critical, from the hospital perspective, to get this done in some way,” Dillon said, noting legislators are becoming more educated on the state’s options. “And MHA and the hospital community remains very flexible about how we do that. We are not locked into one specific idea.”

Sen. David Sater, R-Cassville, said he’s aware of the problems rural health systems are facing, but he doesn’t think Missouri Medicaid expansion is likely this year. Sater was a co-chairman of the Senate committee that reviewed and effectively defeated Medicaid expansion in 2013.

“We felt as though it was important to have some reform before we expanded to another 200,000 to 300,000 on the roles,” Sater said, adding he’s aware of one reform bill in the works. “If that goes well, then we can talk about expansion. If that doesn’t go well, then the topic probably won’t come up.”

He said another factor is the Republican party’s lack of confidence in the federal government.

“There is still a lot of distrust among the senators and representatives around whether the federal government will change the rules on us,” Sater said.

While Steele said Mercy’s rural hospitals are safe, other health systems across the state might not be in the same boat.

“I don’t mean to be Chicken Little and say the sky is falling, but I do anticipate there will be small hospitals around Missouri that are just not going to be able to keep their doors open,” he said.[[In-content Ad]]