July 29, 2014

House Republican files plan to transform Medicaid

A House Republican plan to change Medicaid in Missouri into a more “market-based” system has been unveiled. GOP lawmakers have been developing it since December as an alternative to Medicaid eligibility expansion, as backed by Governor Jay Nixon.

Representative Jay Barnes (photo courtesy; Tim Bommel, Missouri House Communications)

Representative Jay Barnes (photo courtesy; Tim Bommel, Missouri House Communications)

Representative Jay Barnes (R-Jefferson City) filed the proposal this morning. It would raise some eligibility levels and lower others, bringing them nearer to 100 percent of the federal poverty level and lowering the overall number of Missourians eligible.

The eligibility level for children would drop from 300 to 100 percent, taking off the Medicaid rolls about 44,000 children. That reduction would not begin until Fiscal Year 2019 because the Affordable Care Act would not allow it to happen earlier.

The plan would reduce eligibility for pregnant women from 185 percent to 133 percent, reducing the Medicaid rolls by 977 recipients, and for women with cancer from 200 percent to 100 percent, reducing the rolls by 32 recipients.

It would raise the eligibilty level for parents and childless adults from 19 percent of the federal poverty level to 100 percent, extending eligibility to about 172,000 people. It would also extend eligibility to about 7,400 people under a new category, “medically frail.”

Barnes says his plan would change Medicaid into the most free market public health system in the country. He estimates it would save the state at least $741 million over the next 8 years. It would require $482 million in federal money in the fiscal year starting July 1.

The plan would need at least three waivers from the Obama administration, for the changes in eligibility, the cash incentives for patients and the change to a bid managed healthcare system.

Barnes says, “If [the Obama administration is] serious about working with people that have different ideologies than they do, people who believe in the 2000-plus year history of free markets to bring down cost and improve quality, they’re going to allow some states to do things that haven’t been done before and this is a proposal to do just that.”

Barnes’ plan would have managed care providers offer competing plans. Recipients would choose from those a health insurance plan with either a high deductible or a co-pay. Primary care or preventive services would not have a deductible or co-pay. Recipients who don’t use all the money in their co-pay or deductible could receive a portion of it at the end of the year.

Barnes says this gives recipients an incentive to save taxpayers money and discourage things like unnecessary trips to emergency rooms for conditions that could be treated in other ways.

Governor Nixon announced in November his intent to push for Medicaid expansion to cover adults earning up to 138 percent of the federal poverty level. He says it would extend coverage to 300,000 more Missourians by fiscal year 2018 and save the state more than $586 million over the next 8 years. Nixon also says his plan will create 24,000 jobs.

The changes in eligibility depend on the existence of a federal health care exchange, which Missouri does not have yet. Barnes says the exchange would offer subsidies for insurance coverage for the populations with reduced eligibility.