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The Senate Appropriations Committee set the stage for a lengthy floor debate on Medicaid expansion, with a split vote late Wednesday on a plan offered by Republican Sen. Lincoln Hough.

Hough, vice chairman of the committee, and two other Republicans joined with all four Democrats in support of a proposal that would have implemented the expanded eligibility enacted by voters in 2020. But with all seven other Republicans on the 14-member committee opposed, the proposal failed on a 7-7 tie vote.

For Democrats, the issue was a matter of heeding the will of voters and taking care of working-age adults who have no other access to coverage.

"Now, if we expand it we can allow them an opportunity to actually get up, feel like grown men and women and responsible citizens and earn a living chance to get up and, oh my god, put some sales tax and income tax back into our budget," said Sen. Barbara Washington, D-Kansas City.

For Republicans who were opposed, the reasons ranged from reflecting how their districts voted to objecting to how the ballot measure was drafted and anger at the cost of the current program.

"I don't support putting a single dollar into Medicaid expansion," said Sen. Bill Eigel, R-Weldon Spring.

Hough and his GOP backers offer practical reasons for approving his plan to allocate $60 million in general revenue, which with other available funds would draw $1.6 billion in federal payments, to expansion costs.

If eligibility does not open July 1, the state will certainly be sued. A court could order the state to provide coverage and the treasury would be obligated to cover the costs, Sen. Mike Ciepiot said, alluding to the desegregation orders that took billions from the state treasury without appropriations from the 1980s into the 1990s.

And Hough pointed out the practical benefit of a bigger federal share of the current program offered in the most recent COVID-19 relief bill to states that expand Medicaid. That is worth $1.2 billion over two years, he said.

"I wouldn't put this plan before the committee if I didn't believe this was the right path to go down," Hough said.

The committee held the debate after 10 p.m., when members returned to work on the $32.2 billion budget passed by the Missouri House earlier this month. Chairman Dan Hegeman, R-Cosby, made it the first order of business when the committee returned rather than deal with it in piecemeal fashion in spending bills for the mental health and social services departments.

"I know there is a lot of passion on both sides of this issue, great depths of passion," Hegeman said, asking members to be as brief as possible with their remarks. "I fully expect this debate to be held with the body as a whole on the floor with the Senate."

Hegeman opposed including Medicaid expansion funding in the budget plan.

Amendment 2, placed on the 2020 ballot by initiative petition, directs the state to offer Medicaid to anyone with an income of 138 percent of the federal poverty level or less. The provision is expected to make 275,000 working age adults eligible for coverage.

Under the provisions of the Affordable Care Act, the federal government will pay 90 percent of the cost for covering that population. The program takes effect July 1, the first day of fiscal 2022.

Parson's proposed $34.1 billion budget for fiscal 2022 set the cost of Medicaid expansion at $1.9 billion, including $120 million in general revenue. That estimate included administrative costs. The House Republican majority refused to fund expansion in the budget it sent to the Senate.

Hough focused his arguments on the practical benefits to the state of accepting the decision of voters. He proposed allocating $60 million from general revenue and tapping almost $2 billion in federal funds that will flow to the state to offset future costs.

"I wouldn't put this plan before the committee if I didn't believe this was the right path to go down," Hough said.

Medicaid is a shared responsibility of state and federal governments. Each state pays a share of the traditional program based on personal income as a share of national income. For Missouri, that means the federal government pays 66 percent of the cost.

Because of the COVID-19 pandemic, the federal government is picking up an extra 6.2 percent and Missouri has been banking that additional help, amassing a fund of $500 million, Hough said. The fund will collect about $500 million more by the end of the year.

That money, along with the Medicaid expansion incentive in the federal COVID-19 bill, Hough said, would give the state a fund of about $2 billion to modernize Medicaid and stabilize the costs.

The constitutional argument against funding is based on how measures proposed by initiative are supposed to be drafted.

Sen. Denny Hoskins, of Warrensburg, in arguments echoed by others, said the constitution prohibits initiative proposals that spend money without providing a source of revenue.

Amendment 2 did not direct lawmakers to appropriate money but instead directed the executive branch to set a new eligibility level. The Western District Court of Appeals refused to consider in advance of the vote whether that would be the effect of Amendment 2.

Lawmakers can refuse to appropriate money that would implement Medicaid expansion because of the prohibition on spending by initiative, Hoskins said.

"I believe that the constitution is on the side of those of us who don't want to expand Medicaid," he said.

Republicans in the Legislature have opposed expanding Medicaid since it was first proposed by Gov. Jay Nixon in 2013, arguing it is too expensive and the current program is already too costly and inefficient.

Medicaid in Missouri cost $10.8 billion in fiscal 2020, which ended June 30, including $1.98 billion in general revenue.

Overall, Parson's budget proposal called for $14.1 billion for Medicaid, including $2.7 billion in general revenue, according to budget documents.

Lawmakers face a May 7 deadline for completing work on the budget for the coming fiscal year.

The Missouri Independent is a nonprofit, nonpartisan news organization covering state government and its impact on Missourians.

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