House considers 'market-based Medicaid' after expansion fails

The UM Health System could lose federal funding to help treat the uninsured.
Rachel Michaels / Graphic Designer

After a governor-approved Medicaid expansion plan failed to pass, a Missouri House Republican unveiled a new “market-based Medicaid” plan Tuesday.

Rep. Jay Barnes, R-Jefferson City, sponsored House Bill 700, which seeks to reform Medicaid by trimming Medicaid rolls, providing low-cost private insurance to people with incomes above the poverty line and creating cash incentives for Medicaid recipients with low health care costs, along with other initiatives.

Barnes said his plan is more cost-effective than the expansion and better meets Missourians’ health care needs.

“Market-Based Medicaid would flip-the-script on one-size-fits-all ObamaCare,” Barnes said in a blog post. “Missouri would end Medicaid as the world has known it and would serve as a model for reform that could save billions of dollars every year if expanded to other states.”

Barnes’ legislation would alter Medicaid eligibility to add some adults but remove some children from the program, lowering the overall number of eligible Missourians. Barnes said the change would “reduce dependency.”

A broad Medicaid expansion that followed the Affordable Care Act’s guidelines failed in the House Committee on Government Oversight and Accountability on Monday.

Gov. Jay Nixon called the expansion “the right thing to do” in a Feb. 7 speech at MU. The UM Health Care System and local business organization Regional Economic Development Inc. also endorsed the expansion.

REDI President Michael Brooks said the expansion would have brought jobs to mid-Missouri.

“We supported the Medicaid expansion because it had the potential for creating additional good jobs in the Columbia, Boone County and Missouri area,” Brooks said. “There certainly are other implications and ways the Medicaid expansion would have been important, but we were most focused on the job portion.”

Brooks said it is unlikely that reducing Medicaid eligibility would have any impact on jobs, although it is to early to tell if the legislature will consider other plans.

“To the best of my knowledge (trimming Medicaid rolls) would not result in the loss of jobs, at least not in the short-term,” Brooks said. “The legislature is not finished meeting, so there continue to be different options that I’m sure will be discussed prior to the end of the session. At this point, who knows what may happen?”

With the expansion’s failure, the UM Health System could lose federal funding designed to reduce the cost of treating uninsured payments.

“Theoretically, (the lost funding) all works out, because when the U.S. Congress passed the Affordable Care Act, they envisioned that states would expand Medicaid to offset those costs,” UM Health System Vice Chancellor Harold Williamson said in a Feb. 7 speech. “But if Missouri decides not to accept the Medicaid expansion, MU Health Care would lose funding meant to offset the costs of payment reductions mandated by the Affordable Care Act."

Williamson said the system would continue to try to treat uninsured patients. In Fiscal Year 2012, the system’s hospitals provided about $33 million in uncompensated care.

The expansion would have covered people with incomes up to 138 percent of the federal poverty line, adding nearly 300,000 Missourians to Medicaid rolls.

According to state budget documents, 7 percent of Boone County residents would have been eligible for Medicaid under the expansion. Twenty-six percent of Boone County residents who make below 138 percent of the poverty line are uninsured, but across all income levels, 14.1 percent of residents are uninsured.

People who would have qualified for Medicaid under the expansion will be encouraged to buy low-cost insurance in the state-run health insurance exchange the ACA requires Missouri to create. The bill also provides incentives for private “managed care” companies to compete to provide health care for Medicaid-eligible patients.

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