Nixon touts plan to extend Medicaid to 34,000 people

John Hacker

A plan touted by Democratic Gov. Jay Nixon would use private money to match federal money to add more than 34,000 people to the state Medicaid rolls, most of whom were removed from the rolls by changes adopted by the Republican legislature and governor four years ago.

Nixon visited Freeman West Hospital in Joplin on Tuesday to push the legislature to raise the wage threshold for eligibility for Medicaid from 20 percent of the federal poverty level to 50 percent of the poverty level, a move that would be necessary under federal rules to allow the state to take advantage of the federal money.

If lawmakers make that change, the Missouri Hospital Association has volunteered to put up $52.5 million a year to the state.

“These dollars will come from the funds Missouri hospitals currently receive for providing uncompensated care to uninsured patients,” a news release from Nixon’s office said. “This investment by the MHA would allow the state to draw down about $93 million in additional health care matching funds from the federal government. Together, these funds would provide coverage for an additional 34,800 parents in Missouri.”

Nixon said it was a chance to add $145 million to the amount the state pays for health care for need Missourians without adding to the already overburdened state general revenue fund.

“If you can put $145 million, without a single penny of additional state general revenue money, not one penny, in the health care system in the state, what it will do is it will begin the process of downward pressure on the premiums of people who have health care.”

Freeman CEO Gary Duncan, a member of the Missouri Hospital Association’s Board of Directors, said this is a very doable plan, but the key is getting lawmakers to raise that threshold for eligibility.

“It sounds like wow, we’re going to jump way up to about 50 percent, well that’s only about $6,000,” Duncan said. “So you’re talking about a baby step, but a very needed one and it puts several people back on Medicaid. I think the point to make is I was asked the question won’t the economy; as it turns back, fix this problem? No, it’ll fix the problem for the unemployed, but we’re talking about folks that may not be employable or may have marginal employment with no insurance. The economy won’t fix that problem and we need to get back to these most vulnerable folks and get them back on Medicaid.”

Currently, Missouri parents must make less than about 20 percent of the federal poverty level to be eligible for coverage under the state program. To take advantage of this landmark opportunity, the Missouri General Assembly would need to increase the eligibility threshold to 50 percent of the federal poverty level in the fiscal year 2010 budget. This is the only legislative action required to provide health care to these parents under this agreement because no taxpayer General Revenue dollars are needed.

Duncan said this would not mean more people would come to the hospital.

“We see these people anyway, we saw them five years ago when they were on Medicaid, we’re seeing them now when they’re not on Medicaid,” Duncan said. “This isn’t bringing more people into the system, it’s bringing more dollars into the system so that we don’t have that dirty little secret called cost shift. This isn’t free, we talk about uncompensated care and charity care, and it isn’t free. We’re a business, we have to make a bottom line like everybody else, so it gets shifted over to the private sector, so what this will do hopefully is put some downward pressure on the premiums for the private sector do hopefully it helps them and we get rid of some of those costs.”

Duncan described cost shifting.

“Because the private sector is not making up the dollars we’re now losing,” Duncan said. “Four years ago, before those 90,000 people came off Medicaid, we were getting some reimbursement from those folks, now there’s 90,000 out there we’re getting nothing from. Well, we’re still treating them; we still have the cost of care and unfortunately, a lot of those folks hit the ER so it’s the most expensive cost of care. We can’t print money, so we have to get that money from somewhere else, so we shift it over to where we are getting some revenue. Hopefully they go back on Medicaid, then that pressure to shift it over stops.”

If a single mother with two children makes more than $3,700 a year, or 20 percent of the federally designated poverty level annual salary, she is not eligible for the state’s Medicaid program. This plan would raise what that mother could earn to $9,155 a year.

Eligibility changes

For a family of four, two parents and two children, 20 percent of the federal poverty level is $4,401. Under the new plan, that family would be eligible for Medicaid if they earn up to $11,025.

Carthage Press