JEFFERSON CITY, Mo. – When Missouri lawmakers return from this week’s spring break, observers foresee a Medicaid battle continuing on two fronts.

Lawmakers and interest group representatives said they expect continued debate on plans that would either cover more low-income residents through the program or dramatically reshape it into “the most free-market oriented Medicaid system in the entire country,” which is how Rep. Jay Barnes, a Jefferson City Republican, describes his legislative proposal.

Budget watchers said the GOP-dominated General Assembly also would grapple with the financial implications.

At stake are approximately $46.6 million in funding increases for areas including higher education and early childhood programs, which Gov. Jay Nixon has included in his fiscal 2014 budget proposal.

Part of his assumption is that the state would be able to redirect general revenue to other priorities, given the federal dollars that would flow to the state should it expand Medicaid as envisioned under the federal Affordable Care Act, or ACA.

The federal Medicaid dollars would pay for health care costs now covered by the state and generate economic activity that, when combined, would bring a net gain to the state general revenue fund of nearly $600 million over eight years running to 2021, according to the Nixon administration.

Barnes said his plan would produce even greater general revenue resources.

Conservatives express differing viewpoints about the proper way to proceed, while the governor and others are pushing hard for the General Assembly to expand the program.

“It’s kind of dual tracks,” said Sen. Paul LeVota, an Independence Democrat, “and hopefully, with all the clear input and evidence that (expansion) is the right thing to do, we’ll figure out a way to get it done.”

His comments came after a party line vote Wednesday, when the Senate Appropriations Committee refused to endorse his measure, SB 349, which would expand Medicaid eligibility to 138 percent of the federal poverty level and allow Missouri to leverage the federal ACA funding.

There was testimony in favor of the bill from nearly 30 witnesses, LeVota said. The lone opponent to testify, he said, was Jim Lembke, a former state lawmaker who represented a conservative group called United for Missouri.

In a statement issued Friday, Nixon assessed progress on the issue at the midpoint of this year’s legislative session.

The governor said he was “encouraged that members of the House and Senate are looking at this issue and share my interest in reform, because that is what strengthening Medicaid will do.”

He added, “I look forward to continuing to work with the General Assembly to make our health system as efficient and effective as possible by bringing the tax dollars Missourians send to Washington back to work here in Missouri.”

According to the nonpartisan Missouri Budget Project, expanding Medicaid eligibility to 138 percent of federal poverty guidelines would reduce the state’s uninsured population by about one-fourth and provide health coverage to an estimated 267,000 Missourians.

According to the group, low-income parents in Missouri currently must earn less than 19 percent of poverty level, or approximately $292 per month for a family of three, to be eligible for Medicaid. Eligibility for Missourians with disabilities ends at 85 percent of the poverty level.

Under the ACA, the federal government would, for the first three years, pay 100 percent of the costs to cover the expanded population for states that increase eligibility to the 138 percent level. The match would decrease to 90 percent after that.

But, according to Barnes, it would be a mistake to expand a broken program.

“We know from history that central planning does not work – and yet it persists in Medicaid,” according to his 21-page overview of HB 700, the Medicaid reform bill he is sponsoring.

The measure is pending before the House Government Oversight and Accountability Committee, which Barnes chairs.

According to him, his Market-Based Medicaid program would save the state at least $741 million during its first eight years.

Under his plan, Medicaid recipients could choose a high-deductible health plan or a pre-paid copay plan.
Preventative and primary care services would not require a co-pay or deductible payment. However, recipients would face “steep” deductible payments or copays for unnecessary visits to the emergency room.

Barnes’ proposal would revise income eligibility requirements for Medicaid. Barnes would “streamline” eligibility at 100 percent of the federal poverty level for certain populations, except in instances where federal law prevents that.

Barnes acknowledged his legislation would reduce eligibility restrictions for some populations while increasing access for others. Critics have said pregnant women are one population that would have less access under his plan.

Budget bills moving through the House do not assume there will be a Medicaid expansion.

Barnes may present a revised version of his bill after spring break, according to Hardenbrook and others. Expansion proponents are hoping a revised measure would meet the ACA threshold in order to bring in the added federal dollars.

But, Lembke said, based upon conversations he has had with his former colleagues, “That bill would not make it through the Senate.”

There is much to like about Barnes’ bill, he said, though his group is “not too crazy” about the streamlining provisions that would reduce eligibility for pregnant women and children.

Meanwhile, Patrick Ishmael, a policy analyst with the conservative Show-Me Institute said in an email that Barnes’ proposal “has some pretty significant reforms embedded into it that are heartening.”

But, he said, it appeared the proposal bowed “to perceived political necessity” of adding some spending to the Medicaid program.

Sen. Rob Schaaf, a St. Joseph Republican, is a medical doctor and a member of the appropriations committee. He faulted the Barnes bill for providing better coverage to able-bodied adults than to disabled citizens.

“Where is the social justice in that?" he said.