Missouri Dems Slam ‘False Choice’ As Republicans Put Medicaid Money Elsewhere

JEFFERSON CITY — Missouri House Republicans want to put the $130 million intended for voter-approved Medicaid expansion into other social services, including the state's embattled public defender system, school transportation and mental health, under legislation filed late Friday.

"We're choosing to prioritize different populations," said House Budget Committee Chair Cody Smith, a Carthage Republican.

The committee voted along party lines on Thursday to exclude funding for expansion — which was approved by 53% of Missouri voters last August — from the rest of Gov. Mike Parson's proposed state budget. Democrats plan to re-introduce the funds into the budget on the House floor.

The $130 million would fund expanded eligibility for the state health care program to nearly 300,000 low-income Missourians. Under the Affordable Care Act, the federal government picks up 90% of the tab on expansion — $1.4 billion for Missouri.

On Friday, Smith filed legislation to spend almost the same amount of state money, and almost $900 million in federal funds, on other items.

They include $1 million for the short-staffed public defender system and $18 million toward public school transportation. The transportation money would clear the way for a controversial school choice program that would use tax credits to fund scholarships to private schools. Under a bill narrowly passed by the House last month, the tax credit program is tied to the state's funding of public school transportation.

Much of the money is going to fill health or senior service expansions the committee had reduced from Parson's budget at the same time they rejected Medicaid expansion funds.

Parson had opposed Medicaid expansion, but after voters approved a constitutional amendment adopting the measure he said he would move forward with implementation. In his proposed $34 billion budget, the state was prepared to fund expanded Medicaid and several mental health service expansions.

Last week, however, Smith deleted the mental health expansions, citing cost.

"I think we've got to be careful about how we expand these services," he told the committee. "In light of the fact that we potentially, you know, we also have to consider Medicaid expansion."

Democrats have rejected the Republicans' characterization that Missouri needs to make "binary choices" between services this year.

State revenue collections are higher than expected. On top of that, the state is receiving pandemic-related federal support that boosts Washington's share of existing Medicaid costs, and would get an extra $1.1 billion in the next two years from the Biden administration specifically for expanding the program.

In total, lawmakers removed $115 million in state funds from Parson's budget for expanding mental health services for adults, $28 million for youth mental health services and $23 million for addiction treatment.

Using the money intended for Medicaid expansion, Smith wants to put $28 million back into adult mental health, $765,000 into youth mental health and $10.8 million back into addiction treatment.

His proposal would use the Medicaid money to fund other services at a higher level than Parson's request.

Those include $6.7 million more in state funds for residential services for the developmentally disabled, $8.8 million more for in-home care for the elderly and a one-time $30 million boost in nursing home reimbursements.

In a statement, Smith said the bill would help "the most vulnerable Missourians," as opposed to Medicaid expansion for "able bodied adults, many who choose not to work."

Budget Committee ranking member Peter Merideth slammed the comments on Twitter, accusing Smith of creating a scarcity that does not exist.

"Even your governor knew we didn't need to make these false choices you present," Meredith, a St. Louis Democrat, wrote.

States that expand Medicaid are able to save money by shifting many state health costs onto the federal funds, studies have found.

A 2019 analysis by Washington University in St. Louis concluded that Missouri could save about $39 million on expansion. But Smith has largely rejected those studies. He said not all of the cost shifts assumed by researchers are allowed by the federal government, and that the studies don't account for future Medicaid enrollment.

Missouri's Medicaid program, known as MO HealthNet, has one of the strictest eligibility thresholds in the nation. It doesn't cover most childless adults. The expansion will allow adults earning up to 138% of the federal poverty level to be covered, and the Parson administration estimates 275,000 will become eligible.

Though the expanded eligibility, which begins July, passed as an amendment to the state constitution, Republican lawmakers contend they are not obligated to pay for it. Only the legislature — not voter-initiated ballot measures — can direct the state to spend money, they said.

Meredith has warned that thousands will become eligible to enroll in Medicaid anyway on July 1, leading to an underfunded program.

Smith said if expansion is not paid for, "I would expect the Department [of Social Services] do not provide services to that population on July 1."

He acknowledged it would likely lead to a lawsuit.

"The eligibility enshrined in the constitution does not speak to the way it's paid for," he said.

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