Can Missouri afford to expand Medicaid coverage, as the Affordable Care Act calls for?
Can it afford not to?
Those questions were not answered Tuesday night by Ryan Barker, vice president for health policy for the Missouri Foundation for Health, but they were talked about.
“We do not lobby,” said Barker, who added that the bylaws of the foundation prohibit it from doing any more than research and education on such topics as the Affordable Care Act.
Speaking at the Lions Club Den, Barker presented arguments for and against expanding Medicaid to low-income parents and low-income childless adults, but took no position on whether the Missouri Legislature should change its mind and join other states in that expansion.
Medicaid is not a subject that grabs the typical reader’s or listener’s interest, but here s a quick review of what it is and where it came from, followed by Barker’s explanation of why the state is faced with the question of expanding the program.
Medicaid started along with Medicare as part of Title XIX of the 1965 Social Security Act.
Medicare is a federal program, while Medicaid was meant to be a program for the so-called “disadvantaged,” or those living below poverty.
Medicaid is jointly run by the states and the federal government, so every state’s Medicaid program is different. Missouri’s Medicaid program is called MoHealthNet, a change in name that occurred in 2007.
Missourians enrolled in Medicaid number 900,000 (of 6 million population). That is a little less than the national average. About 58 million people nationally are covered by Medicaid.
Medicaid is focused on specific population groups: Single parents with dependent children and the aged, blind and disabled.
Eligibility for Medicaid benefits is determined by income in relation to the federal poverty line.
Missouri is one of the most generous states in its benefits for children, Barker said. Children 0-18 are eligible if their families make 300 percent of the federal poverty level.
However, their parents are eligible only if they make 18 percent or less than then federal poverty level.
Pregnant women receive benefits if their income is no more than 185 percent of the federal poverty level.
Blind people are eligibility if they make 100 percent of the federal poverty level.
Blind and disabled people are eligible at 85 percent of the federal poverty level.
What is the 2013 federal poverty level? For a single person it is $11,490; a couple, $15,510; a family of three, $19,530, and a family of four, $23,550.
Single people with no children are not eligible for Medicaid.
Why is Medicaid expansion in the news, and why is it being discussion at town hall meetings? A Supreme Court case is the reason.
After the Affordable Care Act was passed and signed by the president, 26 states sued for two reasons.
One is well-known, the individual mandate. That is the requirement that after 2014 everyone must be covered by health insurance. The states argued the government could not force American citizens to buy insurance; the Supreme Court upheld the government’s right to do so.
The states also sought a ruling on the act’s requirement that states expand Medicaid to everyone or risk the federal government taking away all funding for the program.
The high court ruled that Medicaid expansion must be optional for the states; it also ruled that the federal government can’t take all existing funding from the states.
“Whether you like it or not, the Affordable Care Act is the law of the land,” Barker said.
The act will expand health insurance coverage, through health insurance exchanges and Medicaid expansion to 32 million of the 48 million uninsured people in the United States.
Those who will note be insured after Obamacare gets into full swing are certain immigrants and people who will choose to pay a fine rather than sign up for insurance.
Health exchanges will be ways for individuals and small businesses to buy private insurance and be a part of a pool.
Large pools of 100 or more keep down the costs of insurance premiums. That’s why more than 95 percent of large employers offer health insurance to employees, while only 43 percent of small employers do, Barker said.
The exchanges will build large pools to spread risk and stabilize cost. Missouri is not going to administer a health insurance exchange; instead, it will let the federal government administer an exchange for the state, Barker said.
Health insurance exchanges are supposed to open Jan. 1, 2014, to individuals and small businesses. Premium subsidies will be available for individuals and families who enter the health insurance exchange. A family of four making between $23,550 and $31,322 (that’s 100-133 percent of the federal poverty level) will pay 2 percent of the income for health insurance premiums. A family of four making $70,650-$94,200 (300-400 percent of the poverty level) will pay 9.5 percent of income as a premium for health insurance.
The expansion of Medicaid would expand the benefits to all non-Medicaid individuals and families making up to 133 percent of the federal poverty line. This would increase the benefits available to parents (now limited to 18 percent) and to single non-parents (not eligible at all currently).
In states offering both Medicaid expansion and exchange subsidies, there is overlapping in the 100-133 percent of poverty level. Missouri’s decision not to expand Medicaid will mean parents and childless adults will continue to be uncovered by insurance.
The federal government will pay 100 percent of the Medicaid expansion costs from 20140-2016, then lower that each year until it is paying 90 percent by 2020.
If Missouri were to participate in the Medicaid expansion, its share of funding would be $30.1 million from general revenue in 2017, plus $23.9 million from other funding sources. By 2021, those figures would rise to $143.3 million from general revenue and $115.6 million from other sources.
There are estimated millions in savings if more people are covered by Medicaid, as well as more revenue from federal payments.
Barker said the impact on general revenue will be increases that grow to $39.8 million in fiscal year 2017, then diminish to $4.3 million in fiscal year 2021 and then turn into losses each year.
Some of the arguments for expanding Medicaid include the closing of the coverage gap that leaves low-income working Missourians uninsured. This is sometimes called the ethical reason.
In addition, the act calls for the reduction or ending of DSH funding to hospitals that have a disproportionate share of hospital healthcare funding that is never paid back by patients. This will primarily affect rural hospitals, such as those in Rolla and Salem, he said.
There should also be some growth in jobs and state revenue with the expansion, he said, citing studies by statewide organizations.
Arguments against the expansion include the cost, the fact that Medicaid is a broken system that needs to be revamped and the possibility that Congress can stop funding once the program begins and the states are on the hook.
The Missouri Foundation for Health encourages all Missourians to communicate with their legislators about Medicaid expansion.
Find your area legislators at house.mo.gov and senate.mo.gov on the internet.