A surprise win for Medicaid in Missouri shows the folly of GOP legislatures

A surprise win for Medicaid in Missouri shows the folly of GOP legislatures

Opinion by 

Greg Sargent

Columnist

Yesterday at 5:04 p.m. EDT

Earlier this year, when President Biden and Democrats passed the huge covid-19 relief bill into law, they included a provision that would send a huge wad of federal cash to red states that would drop their opposition to expanding Medicaid under the Affordable Care Act.

Of all the dozen red states that had refused the expansion up to that point, a grand total of zero took the money to change their mind.

The absurdity of this has just been revealed in a new light by a surprise court decision in Missouri, one that constitutes a big victory for proponents of the Medicaid expansion.

On Thursday, the Missouri Supreme Court upheld an expansion of Medicaid that had been secured via a ballot initiative. That could mean an additional 275,000 people will have access to it.

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That ballot initiative passed in 2020, but even after it did, GOP state legislators refused to fund the program. The court ruled that since the voters had merely expanded an existing program 一 Medicaid 一 the GOP legislature is required to implement it.

We’ve seen similar citizen-driven efforts succeed in expanding Medicaid over GOP opposition in six red states since 2017.

This has shown what can happen when voters rise up against GOP legislative opposition to force the issue, driven by the obvious logic of taking huge amounts of money from the federal government to insure their own state’s residents. This is a logic GOP legislators continue to reject.

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In Missouri, however, there’s an interesting twist: The court’s ruling upholding the expansion could mean the state gets the additional financial incentive that comes with Biden’s American Rescue Plan, despite GOP legislators’ efforts to reject that money, too.

“The court is effectively forcing the state to take federal money it was trying to walk away from to provide health coverage to poor people,” Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation, told me.

We’re talking about a lot of money here, too. According to Kaiser’s calculations, Missouri stands to receive around $1 billion in additional federal funds if this goes through.

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This is in addition to what the Medicaid expansion itself would ordinarily bring in. Under the expansion, the federal government pays 90 percent of the cost of extending Medicaid to non-senior adults who earn up to 138 percent of the poverty line.

That’s a great deal 一 it essentially funds virtually all the cost of a state expanding health insurance to huge numbers of its poor residents 一 but a dozen states have still refused.

So the ARP added an additional sweetener. Under it, if a holdout state opts in, the federal government adds an additional 5 percentage points of matching funds for two years 一 not just on its Medicaid expansion population, but on its entire existing Medicaid population. That’s why Kaiser calculates that Missouri would see a $1 billion windfall.

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Now, it’s true that over time that windfall would get paid out in the form of Medicaid payments, and the state would have to kick in more funds eventually. But again, the state’s own residents are getting health insurance as a result.

The bottom line is that this stands to be a pretty big windfall. And the court decision is what’s compelling this over the opposition of GOP legislators.

“With the incentive in the American Rescue Plan, the state will actually make money by expanding for two years,” Levitt told me.

The continued refusal of red states to expand Medicaid is a remarkable development. “The decision has become largely about symbolic opposition to Obamacare,” Levitt told me, adding puckishly that these red states have not responded “how you might think to fiscal incentives.”

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But the logic of the Medicaid expansion is driving voters to take matters into their own hands. The success of these referendums will lead to more: Organizers are trying to launch related efforts in holdout states such as Florida and Georgia for 2022.

The resistance has been surprisingly stubborn, but it will prove harder and harder to hold out against. And if Missouri’s experiment succeeds, it will prove harder still.

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