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Potential for savings from Medicaid expansion draws support, skepticism

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Rep. Jay Barnes attends final day of 2013 legislative session

Rep. Jay Barnes, R-Cole County, attends the final day of the 2013 legislative session on Friday, May 17, 2013 in Jefferson City. Photo by Robert Cohen, rcohen@post-dispatch.com

JEFFERSON CITY   •   Missouri legislators took a close look Wednesday at what it might cost to expand and revamp Medicaid, the public health care program for the poor.

Mainly by shifting costs to the federal government, the analysis estimated, the state could save $42 million a year once a complicated overhaul was phased in.

Rep. Jay Barnes, R-Jefferson City, presented the fiscal study, which he portrayed as a starting point for discussion, not a bill he is ready to file.

Critics said the savings was hypothetical. Some also worried about increasing the federal debt.

"My basic concern is that, as a state, (expansion) may have negligible or maybe even positive effects on the general revenues, but as a nation, I think it's putting concrete shoes on our future generations," said Rep. Keith Frederick, R-Rolla.

Under the Affordable Care Act, the federal government would pay the Medicaid tab for the first three years for people making up to 138 percent of the federal poverty level, or $32,500 for a family of four. States would pick up a share, ranging up to 10 percent, after that.

The Republican-led Missouri Legislature defeated the plan last spring, saying the program is broken and expansion isn't financially sustainable. But the idea is expected to resurface in January. Democratic Gov. Jay Nixon and a coalition of business, health care and social welfare groups support the expansion.

Before the House Interim Committee on Medicaid Transformation on Wednesday were cost estimates for adding to the Medicaid rolls an estimated 225,106 working-age adults whose wages fall below the poverty level.

An additional 82,433 people making slightly more -- between the poverty level and 138 percent of poverty -- would get state help to pay premiums for private insurance sold on the federally run marketplace, HealthCare.gov.

Also gradually shifted to federally subsidized private policies would be most children in the state's Children's Health Insurance Program, an extension of Medicaid.

Missouri currently covers children in families earning up to three times the poverty level, one of the most generous eligibility levels in the nation, Barnes noted.

"Missouri law right now for children's health insurance is more liberal than Obamacare," Barnes said. Families in the upper income tier -- between 150 percent and 300 percent of poverty -- pay premiums. Coverage is free for lower income families.

Some legislators expressed reservations about slashing benefits for children, even if they come from moderate-income families.

"I would much rather protect and do what's right for children, who are not signing up for cable (television)...and using resources that could be used for insurance," said Rep. Sue Allen, R-Town and Country.

Missouri would need a federal waiver of Medicaid rules to implement most of the changes in the cost analysis. Barnes sponsored a similar Medicaid overhaul last session.

He said the savings could be higher than he projected because he didn't include savings from increased use of managed care, which would be applied statewide except for those deemed "medically frail." He also didn't calculate savings from wellness programs and incentives to decrease the non-emergency use of emergency rooms.

Rep. Chris Kelly, D-Columbia and a strong supporter of Medicaid expansion, said the state could include a sunset clause, kicking the newly eligible recipients off the program if federal funding fell through.

But Rep. Tom Flanigan, R-Carthage, expressed skepticism that such a clause would ever be enforced. He questioned whether that move would be "politically feasible."

Kelly replied: "If people in the future don't have the courage to do their jobs, none of us can solve that problem."

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Virginia Young is the Jefferson City bureau chief for the St. Louis Post-Dispatch.

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