February 7, 2016

Key GOP legislators want to see Governor’s Medicaid expansion proposal

Republican leaders in the House and Senate have alternately said they oppose Governor Jay Nixon’s intention to support Medicaid expansion and say it is unlikely to pass the legislature. Two key Republicans in the budget making process, though, say they want to see what the Governor is proposing and talk about it. 

Senator Kurt Schaefer (R-Columbia, left) and Representative Tom Flanigan (R-Carthage)

Senate Budget Committee Chairman Kurt Schaefer (R-Columbia) says there are too many unknowns to reject it out of hand.

“I think as elected officials and accountable to everyone in the public, whether they are opposed to it or in support of it, I think there’s a bottom line threshold of having to be able to understand the actual costs, in terms of dollars, both to Missouri taxpayers now and Missouri taxpayers down the road.”

Schaefer says he thinks there will be costs early on, even though the Governor’s office says expansion would involve no state tax dollars until after 2016.

The Governor’s office says if Missouri participates in the expansion, 300,000 to 400,000 more Missourians would be covered by Medicaid and the federal government would pay for 100 percent of that new population.

Schaefer says, “But it’s 100 percent of ‘something.’ The federal agency, Health and Human Services, has to promulgate rules to say what will or will not be covered under that program. They have not done that yet. So that’s why when people say they don’t know what the cost is, it’s because all the details that have to be filled in by the federal government on what the feds will pay for, what the feds won’t pay for, and what the feds will require a state to do but not pay for.”

Schaefer says pharmaceutical costs are one place that Missouri could see an immediate increase under Medicaid expansion.

“You may get into a situation where … Medicaid will only cover one drug per category, for example, so if somebody’s on two drugs within the same category the state would have to pick that up. Pharmaceutical is already our largest in the Medicaid budget as it exists and I think pharmacy is one are that you could see a substantial amount that the state would have to come up with.”

AUDIO:  Kurt Schaefer explains his belief that Medicaid expansion could cost Missouri early on, 2:54

Schaefer says there is no indication of how Medicaid costs might be divided after 2020.

“I don’t think it’s unrealistic to think that the entire population, after it is expanded, could be required to go back to a 60/40 match where we’re at now. If that were the case in 2020 or shortly after that, that would literally be billions of state dollars from discretionary general revenue that would have to be put up for that money in order to get the federal match money.”

Schaefer says he wants to sit down with the Governor and see what his proposal is for Medicaid expansion, what the additional General Revenue cost is and see what the proposals are for where that would come from.

Representative Tom Flanigan (R-Carthage) chairs the House Appropriations Committee on Health, Mental Health and Social Services. He also wants to see what the Governor’s proposal is before taking a position on it.

“Part of our process in our committee will be to take a look at that. We don’t make judgements. We would like to put the facts out on the table, have an honest discussion of the facts and then let the General Assembly have the ultimate say on which way they would like to go.”

Flanigan also doubts no state tax dollars would be used early in Medicaid expansion.

“There’s no such thing as free money.”  He adds, “Whether it will cost us anything in our 2014 budget that we’re going into, it’s the budgets that come after that. It’s the total cost that’s going to come up in ’14, ’16, ’20. Those are the issues that need to be examined and talked about.”

The plan is that when expansion is fully implemented, the state would pay 10 percent of the cost. Flanigan says the concern he and other lawmakers have is that the plan could change.

“The issue could be that the federal government decides that they only want to fund less than 90 (percent) … which would increase the state contribution. You don’t know what the economy is going to look like going forward.”

AUDIO: Tom Flanigan on his concerns about what Medicaid expansion might mean for Missouri’s budget, 1:51

The Governor will unveil his budget proposal in his State of the State Address next month.