Missouri granted more federal funds after Medicaid expansion

Extra federal support will help offset the cost of Missouri's Medicaid expansion.

Missouri is set to receive an estimated $968 million in additional federal funding after expanding Medicaid to an additional 275,000 people, the U.S. Centers for Medicare & Medicaid Services announced Monday.

The $968 million comes from the American Rescue Plan, which was signed into law by President Joe Biden in March.

It's an added bonus of 5 percent to the Federal Medical Assistance Percentage - the match the U.S. government pays to states to cover costs associated with Medicaid expansion - for two years after implementation.

Under the Affordable Care Act, the federal government matches 90 percent of the state's Medicaid costs and the state pays the remaining 10 percent.

In his budget recommendations, Gov. Mike Parson priced the expansion at $1.9 billion - $130 million could come from Missouri's general revenue, $1.65 billion from the U.S. treasury and the rest from taxes on medical providers.

A 2019 study from Washington University found Missouri's adoption of Medicaid expansion would be revenue-neutral, and could even save the state roughly $39 million.

MO HealthNet's cost in 2020 was approximately $3.245 billion for the state, the study noted, but with Medicaid expansion and extra federal dollars the cost to the state decreased to $3.206 billion.

Missouri joins a list of 38 other states and Washington, D.C., in expanding Medicaid, but it wasn't until after a political and legal battle lasting about a year.

In 2020, 53 percent of Missouri voters approved Medicaid expansion through a constitutional amendment, which was to take effect July 1, 2021.

Despite expansion being included in Parson's recommended budget and the state submitting a plan for expansion to CMS, the Missouri Legislature did not appropriate funding for Medicaid expansion last legislative session and the state withdrew its plan from CMS in May.

Expansion proponents soon filed a legal challenge in Cole County Circuit Court but were ruled against because Presiding Judge Jon Beetem said the constitutional amendment failed to provide a funding source.

The ruling was appealed to the Missouri Supreme Court in July, where a unanimous decision overturned the previous court's ruling. The case was sent back down to Beetem to determine how and when the expanded enrollment would begin.

The state began accepting applications Aug. 10 and processing them Oct. 1, with coverage retroactive to July 1.

The state has 275,000 Missourians who are eligible for coverage under the expansion.

MO HealthNet, Missouri's Medicaid program, has received over 17,000 applications since it began accepting applications Aug. 10.

Missourians between the ages of 19-65 who individually earn less than $17,774 each year, or $37,570 for a family of four, qualify for Medicaid benefits and services under the expansion.

Medicaid coverage includes access to primary and preventive medical care, emergency services and prescription drug benefits, among others.

"Hundreds of thousands of Missourians can now gain the peace of mind of having health coverage through Medicaid," Xavier Becerra, U.S. Health and Human Services secretary, said in a news release. "This is a win for all Missourians who have fought long and hard to gain their rightful access to quality health insurance made possible through the Affordable Care Act."

Becerra said the Biden-Harris administration will use Missouri's expansion to urge the country's remaining 12 states to expand access.