Missouri Medicaid Deal Withers In Senate, Sets Up Potential Lawsuit

JEFFERSON CITY — A key Senate committee narrowly rejected a pared-down Medicaid expansion compromise Wednesday, setting the stage for a potential court battle over Missouri's $34 billion spending plan.

On a 7-7 vote, the GOP-controlled Appropriations Committee dumped a proposal to buck an earlier decision by the House to bankroll at least half of the cost of adding an estimated 275,000 more low-income adults to the government health care program known as MO HealthNet.

The compromise, sponsored by Sen. Lincoln Hough, R-Springfield, would have dedicated $60 million in state dollars to the expansion, rather than the $120 million sought by Gov. Mike Parson or the zero dollars supported by the House.

Hough recommended the plan as a "more measured approach" to the earlier House decision to not fund expansion, but said more talks are afoot.

"I think this is destined for a longer dialogue on the floor," Hough said.

Sen. Justin Brown, R-Rolla, joined other supporters of the half-measure, saying he'd rather have the state control the spending instead of putting the decision in the hands of a judge.

"We're all tired of the courts legislating from the bench," Brown said.

The overall spending package is poised to head to the full Senate for a vote next week before the two chambers have to mete out their differences.

The deadline to send the blueprint to Parson is May 7.

The committee vote came hours after Parson roamed the halls of the Capitol Wednesday afternoon, meeting individually with four senators and one representative prior to the committee meeting.

Kelli Jones, a spokeswoman for the governor, said the meetings were about a "variety of topics."

Parson, a Republican who previously opposed expansion, presented a budget in January calling for the state to spend $1.9 billion in state and federal funds to fulfill a plan approved by voters in August 2020.

The GOP-controlled House, however, approved an alternative plan last week to spend money that Parson had budgeted for Medicaid on other programs.

Under the House version, an estimated $88 million would go to nursing homes and $25 million would be set aside for services for people with developmental disabilities. The House proposal includes enough money to hire another 15 public defenders, and another $15.5 million to pay school transportation costs.

The Senate committee's vote, similar to the House action, waylaid what Missouri voters said last year, when they amended the state Constitution to expand Medicaid eligibility, circumventing Republican lawmakers who have long resisted growing the program under former President Barack Obama's federal health care law.

"I think it's absurd to sit up here and second guess people who voted for Medicaid expansion," said Sen. Karla May, D-St. Louis. "The state of Missouri has spoken on subject of Medicaid."

Sen. Mike Cierpiot, R-Lee's Summit, said he favored the half-measure compromise, saying the will of the voters should be accepted.

"I'm not a fan of Obamacare, but it is what it is," Cierpiot said.

Sen. Tony Luetkemeyer, R-Parkville, argued that the judicial branch shouldn't be able to force lawmakers to spend money, saying it violates the separation of powers outlined in the Constitution.

"Shame on us if that's reason we take a vote tonight," Luetkemeyer said.

St. Louis-area Democrats on the committee voted "yes" for the added spending. The chairman of the panel, Sen. Dan Hegeman, R-Cosby, was among those voting "no."

Missouri's Medicaid program currently does not cover most adults without children, and its income eligibility threshold for parents is one of the lowest in the nation at about one-fifth of the poverty level.

While some Republicans say expansion will reduce funding for other programs over the long run, the Missouri Budget Project calls those claims "unfounded."

The federal government pays for most of the cost to expand Medicaid, but Missouri still would need to chip in about $120 million in state dollars.

In addition, the American Rescue Plan Act, which President Joe Biden signed into law last month, includes an additional $1 billion in incentives for Missouri to expand.

"In short, the bottom line is that the state's funding obligation can be paid for through savings from other programs achieved through expansion and increased sales and income tax revenue generated by the federal funds expansion would bring to (Missouri,)" the budget project said in a statement.

If the state budget is approved without the funding, the issue is likely headed to the courts, specifically when people become eligible for the program on July 1 under the state Constitution.

For example, if the state denies coverage to an eligible recipient, that could set the stage for a lawsuit.

Supporters have already won two lawsuits seeking to dump the 2020 ballot proposal.

Lawsuits by conservative advocacy group United for Missouri and Americans for Prosperity-Missouri claimed the proposal would expand the government health insurance program without coming up with a funding source to pay for that.

But Cole County Circuit Judge Daniel Green ruled that the ballot measure doesn't require lawmakers to set aside state revenue for the expansion, resulting in the measure getting to stay on the ballot, where it won with 53% of the vote.

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