Amendment 2: Medicaid expansion passes, but at what cost?

Published: Aug. 5, 2020 at 5:34 PM CDT
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It’s clear that the Medicaid expansion passed by Missouri voters on Tuesday night will help around 230,000 additional low-income adults in the state and that rural hospitals (15 of which have closed in the last decade) like Citizens Memorial in Bolivar will benefit as well.

“We have about seven million dollars of care that we write off each year for the uninsured,” explained Tim Wolters, the Director of Reimbursement for CMH in Bolivar. “And so if even half of that is converted to Medicaid coverage we can hire more caregivers and just provide better care to the community overall.”

But what’s not clear is how much it will affect Missouri’s already strained budget that is required by law to be a balanced budget, something that isn’t required at the federal level.

A Fiscal Impact Study from Washington University on Amendment 2 provided by the state auditor’s office offers only a “best estimate” because of so many ever-changing factors. The study states that estimate is that the state will actually save $39 million but also said “while this value is our best estimate, we also provide a range of $95 million to $42 million, which should be the lower and upper bounds of what the net impact to the state would be FY2020.”

In becoming the 38th state to expand Medicaid, Missouri will now be getting about $500 million of residents’ federal income tax money back that was being used for Medicaid in other states.

But while the federal government is covering 90 percent of Medicaid expansion costs, the state still must chip-in what amounts to a co-pay of 10 percent and that money has to come from somewhere during a time when the budget has already been tightened and slashed.

“Especially during this COVID economy it’s not a good time or good place for the state’s share to be taking in an uncertain amount of volume,” said Travis Brown, the CEO of a St. Louis-based advocacy group First Rule. “And I think we’re just seeing the tip of the iceberg. By expanding this entitlement program, voters have opened up the possibility of rural school consolidations, ushering in higher taxes on all citizens and forcing deeper cuts to vital state programs like education.”

“I know there’s a lot of disagreements and a lot of it goes into the assumptions of how many are going to sign-up and how is this going to impact the overall economy,” Wolters countered. “But if you had the chance to draw on these federal dollars for any other program, the state would love to get that to happen. There is some cost the state has to invest but I think what they’re going to get back from it is more-than-going to offset that cost.”

There are also concerns about the federal funding.

“We know the economy has shrank 32 percent nationally,” Brown said. “There is nothing in federal law that requires them to continue to pay 90 percent back to the state of Missouri. So I think taxpayers and voters today have plenty of reason to be cynical because they’re going to pick up the tab directly or indirectly.”

Proponents though say the expansion is worth the cost.

“It’s going to allow patients to get care at the right time,” Wolters said. “It’s going to boost hospitals that are really struggling right now and the economic impact to the state should be positive in the long term.”

Copyright 2020 KY3. All rights reserved.

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