Nixon Says Business Case Being Made for Medicaid Expansion

Feb 8, 2013

Missouri Gov. Jay Nixon made himself available to reporters today to address questions on his proposed Medicaid expansion, a measure he’s been pushing since late last year. KSMU’s Scott Harvey spoke with the Governor by phone and has this report.

Nixon has stressed that further educating lawmakers on the benefits of adding 300,000 Missourians to the Medicaid rolls within the first three years will help win legislative approval. Making the business case has been an obvious tactic as of late. In last month’s State of the State Address, the Governor invited leaders from various chambers of commerce who’ve backed the measure, including Kansas City, Springfield, and St. Louis. This week, he was in Independence and Columbia working to garner more support, where organizations like Columbia Regional Economic Development Inc. announced their approval.

“We’re now making that business case that Missourians pay these taxes, hey how about getting them back in Missouri so we can spend them here to improve our health care system rather than spending them in other places,” Nixon told KSMU.

Nixon, a Democrat, was quick to note the recent “shifts nationally” with Republican governors in Ohio and Michigan endorsing Medicaid expansion in their states.

“Public policy is moved by folks in the local communities understand issues and then the legislators and other electives reacting to their education and I think we’re making solid progress to move this discussion forward.”

Under the proposed expansion,low-income Missourians who can’t afford health insurance and earn less than 138 percent of the Federal Poverty Level would be eligible for coverage. A family of four living at 138 percent of the Federal Poverty Level in 2012 made $31,809 a year. Last year’s Supreme Court decision gives states the option to participate in the program, which would be fully subsidized by the federal government during the first three years. The 100 percent match will decrease to 90 percent by 2020.Nixon says the state’s current Medicaid structure includes 60 percent funding from the feds, and requires a 40 percent match from Missouri.  Compared to the current model, a proposed expansion is too good to pass up, he says.

“So moving a program from 40 percent state to, at its very worst, 10 percent state picks us up significant gains dollar wise, and allows us then to use those dollars for education, for other things that we can help move this economy forward.”

The Governor has been relying on figures from a study by the University of Missouri, claiming program expansion will generate an additional 24,000 jobs in 2014, covering nearly 260,000 people in its first year.

Dr. William Rohlf, professor of economics at Drury University, says that in addition to any employment impact this bill has, it will create a healthier labor force.

“A lot of folks who can’t afford any sort of medical care right now that will have access to treatment, and it won’t necessarily be after the fact. They won’t have to be extremely sick to go to the doctor. So I think you’re going to get a healthier labor force and probably some healthier kids in schools and I think that’s a positive thing. I would suspect that employers see that,” Dr. Rohlf says.

But for Rohlf, it comes down to if Missourians are willing to bear somewhat higher taxes in order to enable low-income folks to have access to health care.

“What the Governor’s trying to do, and I understand it, is to make the cost appear less – and actually the cost to the state is really pretty minor – but there will be some. And I think we need to be straightforward about that. There will be some costs. The question is ‘are we willing to pay that?’”

But long-term costs remain a concern for key Missouri Republicans, as does the federal government’s inability to keep its promises.  

Nixon attempted to alleviate those concerns last month, when he said he’ll include a provision that rolls back the Medicaid expansion if Washington doesn’t honor its financial commitment.

No easy task, says House Budget Chairman Rick Stream, who following last month’s State of the State Address told reporters that agreeing to Medicaid expansion brings with it very heavy strings attached.

“I mean you can’t, you know, hiccup, without the federal government coming in and telling you you’re spending the money wrong. If we start to accept it, I think we’re gonna run into a problem trying to ratchet back,” Stream said.

But Nixon defended that argument to KSMU.

“We’re seeing a lot of contention up in Washington, D.C. right now, but this [Medicaid expansion] has not been an area of contention. They understand that putting these dollars out into health care helping working poor and others is important and will help the economy of our state.”

Of the $908 million in federal dollars Nixon’s office would like to use to add people to the Medicaid rolls, $82 million would be used to increase the rates of health care providers who treat those new patients. In a recent analysis by the Associated Press, the Governor’s program would pay rates similar to private insurance when treating adults covered by the Medicaid expansion, rather than the typically lower rates paid by Medicaid.

When asked about the rate plan, Nixon told us that medical providers, especially in the rural areas, can lose money with respect to Medicaid. So bringing Medicaid reimbursements closer in line with Medicare reimbursements will really help more professionals inside that system, he says.

“Doctors, nurses, you know, lobotomists, therapists… their work, our view is, that their work, whether they’re working on someone or with someone on Medicare and Medicaid, they should be compensated for the same work at an equal number.”

But how would that not create a two-tier system where doctors are treating the newly covered Medicaid patients more than they’re treating those with higher incomes on Medicaid? 

“I think it takes a two-tier system that we have right now and turns it into one,” Nixon said. “When you talk about having a difference in Medicaid and Medicare and smoothing that out so they reimburse at the same level I think it makes it less complicated.”

But some categories of people could still be left out, according to the AP report, which says higher rates would not apply when physicians treat other categories of Medicaid recipients outside of those who qualify under the expansion.

Nixon also expressed concern for Missouri’s for rural hospitals. Under the Affordable Car Act, the federal government plans to reduce the amount it reimburses hospitals, known as disproportionate share dollars, because there are supposed to be fewer people without insurance showing up for medical care.  

“When you roll back those numbers - if we don’t move forward on Medicaid expansion and cover these folks with Medicaid - it will have a very negative effect on the budgets of these smaller, rural hospitals.”

Expect more stops throughout the state from Missouri’s governor, who says he’ll continue to work on expanding his coalition of supporters.

Learn more on the Governor's proposed FY2014 budget, including a power point on Medicaid expansion, by clicking here.