Missouri became the 38th state to approve Medicaid expansion as more than 53% of voters supported Constitutional Amendment No. 2 during the August primary. While the amendment passed, budget makers in the state continue to have strong concerns about how Missouri will afford the cost of expansion.
Many of the state’s leaders have been vocal in their opposition to expansion. Gov. Mike Parson has referred to expansion as a “massive tax increase that Missourians cannot afford.” State Treasurer Scott Fitzpatrick said expansion would add another 300,000 people to “a system that’s already strained and is already consuming a massive portion of the state budget as well as massive portions of the state’s general revenue spending.”
House Budget Chairman Cody Smith noted the state already spends more than $10 billion each year on Medicaid, accounting for nearly 40% of last year’s state budget. Even without expansion, the program grows in cost by hundreds of millions annually. Now, the growth in Medicaid spending will far exceed the rate of growth state revenues can realistically be expected to achieve. He said the passage of Amendment 2 will add additional hundreds of millions in state spending. Smith added, “What’s worse is that there is no funding mechanism or source included to pay for it. Because we must have a balanced budget, that’s hundreds of millions that will have to be cut from somewhere, and that usually means education. Proponents of Amendment 2 hold up the benefits of offering health care to able-bodied, working-age adults, but are silent on the staggering cost and lack of a plan to pay for it.”
Passage of Amendment 2 means that adults earning up to 138% of the federal poverty level will be eligible for Medicaid beginning in July of 2021. With this, Medicaid will expand to individuals earning up to $17,600 a year and up to $36,150 each year for a family of four. Ninety percent of the cost of expansion will be covered by the federal government, but Missouri taxpayers will cover the rest. The Missouri Department of Social Services estimates the cost to the state will be more than $200 million per year and other estimates have put the added cost as high as $349 million per year.
Budget Chairman Smith said there is no magical pot of federal money that will cover the added cost of Medicaid expansion. He said “it will come from you and from your kids’ schools and from your parents’ nursing homes. And it will come from your pocket when Amendment 2 advocates want a tax increase to pay for it.”