The Missouri House of Representatives passed its version of the $34.6 billion state budget on Thursday, leaving out funding for the voter-approved expansion of Medicaid.
It was a move that was expected after the Republicans on the Budget Committee unanimously voted down a bill to fund expansion last week. Budget Chair Cody Smith, R-Carthage, had previously segregated Medicaid expansion funding in a separate bill. He said he made the decision because it was a complex policy.
“It is a large expansion of a new program that is a very complicated policy matter that I believe deserves to be discussed and debated on its own merit, aside from what we already do in Missouri’s array of social services programs,” Smith said.
But House Democrats, including Minority Leader Crystal Quade of Springfield, began sounding alarms that this was a move to defund a program approved by voters in August 2020.
“We’re going to have an up-and-down vote on Medicaid expansion funding in the House,” Quade said last month. “Obviously, we’re very concerned about that because we’ve had a bunch of up-and-down votes on Medicaid in the past and Republicans have never supported it, so why would this one be any different?”
During floor debate this week, Republicans said that voters approved a constitutional amendment that they did not fully understand, and that had they known funding may need to be shifted from other programs like education, or may require a tax increase, they would not have passed it.
“Even though my constituents voted for this lie, I’m going to protect them from this lie,” said Rep. Justin Hill, R-Lake St. Louis. “I am proud to stand against the will of the people who were lied to. This vote to defund Medicaid expansion lies, is a vote to defend your citizens.”
Democrats reminded the chamber that the ballot language voters approved said that the state is estimated to have “one-time costs of approximately $6.4 million.” It also said that the annual net fiscal impact could range from costing the state at least $200 million to saving $1 billion. They argued voters understood this may come with a cost burden.
But the minority party also said the idea that this will create a fiscal crisis in Missouri is a false narrative. They say that not only does the federal government cover 90% of the cost associated with expansion, but that through the American Rescue Plan, Missouri would receive more than $1 billion if the Medicaid population was expanded.
“Stop acting like we don’t have money because you don’t want to provide health care to people because you don’t want to follow our constitution,” said Rep. Peter Merideth, D-St. Louis. “It’s a lie, and it’s ignoring what Missourians told us to do.”
Gov. Mike Parson, who was a staunch opponent of expansion before voters approved it, included the funding in his proposed budget. Despite the decision of House Republicans, he said expanding the program is the will of the voters and needs to be done.
“The House took the action they did. We’ll see what the Senate does, but I think we’re a long way from getting that to the finish line,” Parson said Thursday.
Parson did not go as far as to say he would veto the spending plan if it was passed by the legislature without expansion.
House Democrats say not funding expansion will eventually lead to a costly court decision, where Republicans will be forced to follow through with the constitutional amendment. Like Parson, they would like to see the Senate add the funding back in. But Senate Minority Leader John Rizzo, D-Independence, said he doesn’t have much faith.
“Republicans in the Senate passed an amendment just last week putting Missouri’s existing Medicaid funding at risk,” Rizzo said. “I wouldn’t count on these same Republicans to come to the rescue of Medicaid expansion. Time will tell if eight reasonable Republicans will work with the Democrats to save Medicaid expansion in the Senate.”
Smith has filed legislation to restore some of the cuts that were made from Parson’s budget proposal for mental health services, the public defender program, and some one-time funding increases for nursing homes, among others. Merideth, the ranking minority member on the Budget Committee, said Smith’s new spending bill is going to result in a battle between vital services and expansion.
“It looks like it’s a lot of the things the chairman is claiming we don’t have the money to fund if we move forward with expansion, and he’s trying to pit those directly against each other in that budget bill,” Merideth said.
Medicaid currently takes up one-third of the state’s overall budget. Since the state has not expanded the program, it picks up roughly 40% of the tab while the federal government pays the rest. For years, Republicans have fought expansion, saying it will be too costly for the state. Before the 2021 legislative session began, Republicans signaled the fate of the expansion did not look promising.
Smith pointed out that, in this budget, $341 million is being directed to cover the cost of Medicaid, which is known in the state as MO HealthNet.
“That is the money that is going to cost to continue the Medicaid program as it exists today into the next fiscal year,” Smith said. “That is before expansion. That is before any of these other questions about how we might expand services to various populations. That’s the full freight of taking it into the next year.”
When voters approved Amendment 2, they expanded the population eligible to receive coverage to anyone age 19 to 64 with an income level no higher than 133% of the federal poverty line. For 2020, this was an annual income of $17,600 for an individual and roughly $36,000 for a family of four.
The budget bills now head to the Senate.
