Greitens says Obamacare hurt Missouri’s budget. How?

Feb. 03--Gov. Eric Greitens on Thursday blamed Obamacare for helping create the state's "broken" budget.

It was at least the third time since taking office on Jan. 9 that Greitens has publicly blamed former President Barack Obama's health reform law without explaining how it contributed to the state's fiscal woes. Greitens unveiled his budget proposal Thursday.

On Thursday in Nixa, the new governor quantified the financial burden, asserting the state is "required by Obamacare" to spend an additional $350 million on health care.

After the governor's address, in an interview with the St. Louis Post-Dispatch and other media outlets, Dan Haug, Missouri's acting budget director, attributed the higher costs to pharmaceutical spending within the Medicaid program.

An increase in "caseloads" also was blamed by a Greitens spokesman for driving health care spending higher.

In an email to the Post-Dispatch on Jan. 18, spokesman Parker Briden wrote: "Obamacare has caused the cost of health care to go up in every state, across the entire country. This year, health care expenditures and caseloads were higher than expected and continue to rise, contributing to our budget problems."

"Caseloads" is typically a term used for those with Medicaid coverage, the state-run health insurance for the poor and disabled.

Even though its Republican-led Legislature refused to expand Medicaid, Missouri did see enrollment in the program for mostly low-income Missourians and children increase by almost 103,000 from 2010 to 2016, said Tim McBride, a health economist at Washington University and member of the committee that oversees the state's Medicaid program.

Almost all those new enrollees were children who were eligible to enroll in the state's coverage -- even prior to the Affordable Care Act -- because of the federal Children's Health Insurance Program, referred to as CHIP.

As a result of publicity for the Affordable Care Act and the push to enroll individuals in health insurance plans, more Missourians likely found out their children were eligible for the CHIP program, which grants coverage to children with a family income of up to 300 percent of the federal poverty level, McBride and other policy experts have said. That's $48,720 for a family of two and $73,800 for a family of four.

A majority -- 63 percent -- of those enrolled in the state's Medicaid program are children, according to 2016 figures with the Missouri Department of Social Services. But disabled individuals drive 47 percent of the spending.

"Kids are cheap but nonetheless when you add up that many extra people coming in, it adds something to the state budget," said Abigail Barker, data analyst at the Center for Health Economics and Policy at Washington University.

With the increased scrutiny on Medicaid spending, and calls to repeal the Affordable Care Act among Republicans, policy experts and providers are concerned about potential funding changes to Medicaid, which insures nearly 17 percent of Missouri's 6 million residents.

Currently, Medicaid is funded by both the state and federal government. The federal government matches a percentage of what the state spends on enrollees.

Typically, the federal government provides a larger portion of funding due to the percentage match. For example, for each $1 Missouri spends on Medicaid costs, the federal government matches it with $1.72, according to the Missouri Budget Project, a nonprofit think tank that advocates for policies that benefit the poor and analyzes budget and tax policy.

Overall, the federal government provides 51 percent of the funding for Missouri's Medicaid program, 31 percent comes from a tax on health care providers, leaving the state with 17 percent, according to data with the Missouri Budget Project.

But all that would change if there was a switch to a block-grant system, a proposal by Republicans.

Block grants would cap federal spending given to states, giving them a lump sum instead of a percentage match. That switch could put pressure on state budgets, their credit ratings and lead to "weaker financial profiles for health care institutions," according to a Standard and Poor's report from 2016.

On one hand, a block grant would give states more control over their Medicaid programs instead of having to agree to certain terms as a condition of receiving the federal match.

But receiving just a lump sum, likely based on what the state currently receives, might pressure states to reduce expenditures by reducing coverage for some, according to Standard and Poor's.

"For states, this could lead to more acute fiscal strain during recessions when falling incomes correspond to increased enrollments," according to the Standard and Poor's report.

The report says a block grant arrangement could expose states to the "full brunt of economic recessions."

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