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Nixon Proposes New Medicaid Expansion Program, Catching Legislators Off Guard

Nanette Hegamin

In the final weeks of the legislative session, Missouri Gov. Jay Nixon has made a last-ditch effort to resurrect a push to expand Missouri’s Medicaid program and accept roughly $2 billion a year in federal money.

The governor, a Democrat, unveiled his “Missouri Health Works’’ program before business leaders Monday in Cape Girardeau. By coincidence or design, state House Speaker Tim Jones, R-Eureka and an opponent of Medicaid expansion, was also in Cape on Monday with conservative low-tax icon Grover Norquist to highlight a different issue.

Under Nixon’s proposal, the Health Works program would direct the extra federal Medicaid dollars to small businesses (those with fewer than 150 employees) to subsidize a portion of the health insurance for employees paid less than 138 percent of the poverty level – just under $16,000 a year for an individual adult.

“Because federal funds will cover 100 percent of the costs for calendar years 2015 and 2016, funding for Missouri Health Works would involve no state tax dollars for those years,” Nixon’s office said. “Beginning in 2017, the state share would gradually increase to no more than 10 percent of the cost in 2020.”

As it stands, Missouri would still lose the $2 billion subsidy that it could have obtained for 2014, presumably because the program couldn’t be set up in time.

Similar setups are already in place in at least nine other states, Nixon said: Arkansas, Iowa, Kentucky, Maryland, Minnesota, Nevada, New Mexico, Oklahoma and Oregon.

Republican legislative leaders were among those critical of the governor for waiting until the last weeks of the session to come up with an alternative to the outright Medicaid expansion that he has advocated for more than a year.

Without some sort of program, Nixon said Monday, those lower-paid workers wouldn’t benefit from the Medicaid expansion sought by the Affordable Care Act, and wouldn’t earn enough to qualify for federal subsidies if they purchased insurance on the federal insurance exchange.  The exchange, also part of the ACA, had been envisioned for middle-class people without employer-provided insurance. 

Meanwhile, employers with more than 50 workers would be subject to penalties under the Affordable Care Act unless they provide affordable health insurance coverage to their employees. According to Nixon, the Missouri Health Works program “will lessen this burden by using the dollars available through Medicaid expansion to pay for an estimated 60 percent of the cost of the health premium for eligible employees.”

“Small businesses in Missouri are getting squeezed between sky-high health insurance costs and new requirements under the ACA,” Nixon said in a statement delivered in Cape Girardeau.

“Unfortunately, the Missouri legislature’s inaction on Medicaid has taken this serious problem and made it worse by sending Missourians’ tax dollars to other states,” the governor continued. “There is no reason why small businesses should have to continue to bear all the burdens of the ACA and get none of the benefits. Missouri Health Works is an example of the kind of smart, business-friendly reform that is possible if we move forward and bring Missourians’ tax dollars home.”

House Majority Leader John Diehl, R-Town and Country, called Nixon’s announcement  “a diversion’’ from the unrelated legislative battle over a tax-cut bill now on the governor’s desk. 

Jones and Norquist were in southern Missouri Monday to promote the bill, which Nixon has said he opposes – in part because of a provision that the governor says would eliminate all state income taxes on income over $9,000 a year. Jones and Diehl disagree with Nixon’s interpretation.

In any case, Diehl said in an interview Monday that he was open to “good ideas,’’ and that the Missouri Health Works proposal might indeed be one. But Diehl observed that it would be difficult to get such a measure through the General Assembly within three weeks.

Jones told Jacob McCleland with public-radio station KRCU: "He’s proposed it here in the last three weeks of session after a discussion that’s been going on for nearly two years. And the House has definitely advanced the ball on this issue, but we have always said we don’t want to put a billion dollars into a broken Medicaid system.”

Dan Mehan, chief executive for the Missouri Chamber of Commerce and Industry -- which has supported Medicaid expansion -- was critical of the governor's timing.  Mehan also linked the unveiling to Nixon's opposition to the tax-cut bill, which the chamber also supports.

Referring to Nixon's latest proposal, Mehan asked, "Where was this all session? He never talked to us about it."

Jo Mannies is a freelance journalist and former political reporter at St. Louis Public Radio.