Missouri remains one of only 15 (primarily conservative) states that have chosen not to expand Medicaid to include people up to 138 percent of the poverty level.
A successful initiative petition in Missouri got the issue placed on the November ballot, after which Gov. Mike Parson scheduled the vote for August.
Despite Republican arguments that expanding the program could be devastating to the state’s budget, separate studies released over the past week have shown expansion in other states has decreased costs.
The recently released reports show expansion will not only positively affect the state’s economy, it will also improve overall health.
It has been estimated that expanding MO HealthNet, the state’s Medicaid program, would add about 230,000 people. MO HealthNet already serves about 900,000 people.
The Missouri Foundation for Health employed Regional Economic Models Inc. to evaluate the economic effects of expanding MO HealthNet.
The foundation was created in 2000 using proceeds from the conversion of Blue Cross Blue Shield from a nonprofit to a for-profit organization. Its mission is to improve health through partnerships, experience, knowledge and funding. The foundation was charged with identifying and filling the gaps in public and private health care services in Missouri.
The REMI model is based on a long history of data and experience from other states and how federal spending has affected their economies, said Sheldon Weisgrau, the foundation’s vice president for health policy.
“It is based on what has happened in other states that have expanded their Medicaid programs,” Weisgrau said. “You see this job growth, and you quantify that.”
The REMI report determined a Medicaid expansion in Missouri would create 16,330 jobs annually from 2022-26. About two thirds of the jobs would be outside the major metropolitan areas of St. Louis and Kansas City. And only 20 percent of the jobs would be within the health care industry.
“The majority of the newly created jobs would pay well above minimum wage,” the report states, “with 87.8 percent in industries paying real wages of at least $15 per hour to full-time workers.”
Medicaid expansion fills a gap for people who make too much money for their current Medicaid programs, but not enough for private insurance, Weisgrau said.
Missouri has some of the strictest eligibility standards for Medicaid in the country, he continued.
And, expansion would funnel more federal dollars back to the state, Weisgrau said.
“The point here is that by not participating in expansion, Missouri is leaving more than 1 billion federal dollars on the table every year,” he said. “This is Missouri taxpayer money. The feds want to send some of our money back to us, and the state is not willing to take it.”
Expansion would mean an increase of $2.5 billion in Missouri economic output and add $1.6 billion to gross domestic product, according to the REMI report.
Personal income across Missouri would increase by $1.1 billion, the projection declares.
“Health care providers will have to hire more staff to take care of demand for (workers),” Weisgrau said. “They will need supplies and have to buy more from vendors.”
Vendors will in turn hire more people, he said.
“All those people are paying more taxes to the state,” he said. “That money flows to the economy.”
Under expansion, new health care spending would generate increased demand for private health care, such as ambulatory health care services and hospitals, according to the report.
The Missouri Foundation for Health is to launch a website Monday. The site — makessensemo.org — will feature some of the reporting on the economic effects of Medicaid expansion. It is also intended to support social programs supporting expanded health care.
About the same time the REMI report was released, the Robert Woods Johnson Foundation and Urban Institute also released a study of how the nation’s health would look if all 50 states had expanded their Medicaid programs by 2020.
This research determined that if all 50 states had implemented expansion in 2020, 4.1 million more people would have been covered in 2020 (absent the pandemic).
The studies were conducted prior to the COVID-19 pandemic, using existing data.
The studies’ data are still solid, and make a stronger argument for Medicaid expansion because the pandemic caused so much job loss, staff at the Missouri Foundation for Health said.
The Urban Institute study estimated expansion would decrease the “non-elderly uninsured” rate in the 15 states that hadn’t expanded (including Missouri) from 14.5 percent to 10.4 percent. It estimated the national rate would have decreased from 10.4 percent to 9 percent.
Medicaid expansion was a key component of the Affordable Care Act, which passed in 2010.
Studies of the effects of the Affordable Care Act show that increasing the number of people who have insurance reduces mortality rates, according to the Urban Institute report.
One study, over time, followed adults ages 55-64 (in the years prior to the ACA) who would most likely be eligible for expanded Medicaid. It found a 9.4 percent reduction in annual mortality associated with Medicaid expansion from 2014-17.
“The reduced mortality is the result of a drop in disease-related deaths and grows over time,” the Urban Institute report said. “(Researchers) estimate there were approximately 19,200 fewer deaths in their study population (of about 3.7 million people) over the first four years of the ACA.”
Growth in Medicaid enrollment would have caused feds to increase spending on health care financial assistance by about $30.4 billion in 2020, absent the pandemic, the report states.
If all non-expansion states had expanded Medicaid, their spending on the program would have increased about 9 percent to $4.7 billion. However, that would not be equal to a budgetary impact, the report said.
States would save approximately $1.6 billion on uncompensated care, receive higher federal matching rates for beneficiaries covered by pre-ACA Medicaid eligibility categories, bring in more tax revenue from increased economic activity, receive more revenue from state taxes on health care providers, and reduce demands for non-Medicaid programs for uninsured or low-income residents.
A study of all expansion states found, as of 2015, they did not have significant increases in spending from state funds.
The Urban Institute report found, compared with non-expansion states, “Medicaid expansion states have seen larger declines in the number of uninsured people, lower uncompensated care, improvements in hospital finances, economic benefits from additional health care spending and net gains to state budgets.”
The report also said cost increases resulting from higher caseloads are outweighed by revenue growth.
“Most states,” it said, “with relevant analyses expect fiscal gains, even after states begin paying 10 percent of expansion costs. Our estimates suggest that the remaining 15 non-expansion states would see similar benefits if they expanded Medicaid eligibility.”
This article was edited at 10:58 a.m. June 11, 2020, to clarify that the REMI report projects Medicaid expansion in Missouri would create 16,330 jobs annually from 2022-26.