Missouri continues to debate the expansion of the Medicaid program. Review of available data was consistent and supportive of the plan to move forward and while debate continues across partisan lines, little quantifiable information is identified that does not support expanding. After reviewing the University of Missouri, School of Medicine's detailed analysis and various state and nonprofit evaluations, the conclusion is that Missouri stands to gain economically by moving forward with expansion. There are identified areas where additional analysis would be valuable in determining actual net gains and losses. Based on the current available data, failure to expand Missouri's Medicaid will result in immediate and long term financial strain due to loss of increased federal funding, the reduction in the disproportionate share hospital (DSH) payments for uncompensated care built and increased unemployment resulting from this reduction.
Introduction.
Under the Patient Protection and Affordable Care Act (ACA) of 2010, there is a provision for expanding Medicaid insurance coverage to those living up to 138 percent of the Federal Poverty Level (FPL). The ACA has been a contentious partisan issue and the opponents have taken the argument to the highest court. On June 28, 2012, the Supreme Court, in a 5-4 decision ruled that the ACA was constitutional and that it was, in essence, a tax not a mandate. This ruling also allows states to opt-out of Medicaid expansion and to date, 21 states including Missouri, have chosen that option (Kaiser Family Foundation, 2014). In Missouri, there are several bills before the state senate and house regarding expansion. This policy brief will look at the principal economic ramifications if Missouri chooses to opt-in (or submit a waiver for an alternative plan) or maintain the current opt-out status for Medicaid expansion. These include the effects on job creation and labor income, tax implications, gross state product and private sector insurance premium rates.