On August 4, Missouri voters will decide whether or not to support Medicaid Expansion. There have been a lot of questions around this initiative, so we wanted to share some information. Keep reading to learn more about what it would mean for the state.
What is Medicaid Expansion?
Medicaid Expansion is an important effort to close a gap in insurance coverage for approximately 200,000 Missourians.
Right now, thousands of people across the state, especially in rural areas, do not have access to affordable health insurance because they do not meet the requirements for Medicaid (which is primarily available to children and women while pregnant) or subsidies for plans on the Health Insurance Marketplace. As Medicaid currently stands, childless adults are completely ineligible for Medicaid regardless of their income level.
If voters choose to expand Medicaid, it would increase access to health insurance to uninsured adults and children whose incomes are at or below 138 percent of the federal poverty level. This translates to families of three who make less than $28,676 per year.
Medicaid Expansion is currently active in 36 states and Washington D.C., and states that have expanded Medicaid are receiving the federal tax funding to which Missourians have already contributed.
Does Medicaid Expansion mean I pay higher taxes?
Medicaid Expansion is not a tax increase. Nearly all of the cost (90 percent) is covered by the federal government, and Missouri covers the remaining 10 percent. However, other states that have expanded Medicaid have covered that 10 percent responsibility through savings the program has generated for the state, leading to cost savings overall.
What are the benefits of Medicaid Expansion?
The fundamental benefit to thousands of Missourians is that they will have health insurance that is primarily funded by the federal government. In states where Medicaid has been expanded, there is documented improvement for patients with heart disease, cancer, substance abuse disorders, mental health and diabetes. It's telling to see that no state has reversed its decision to expand Medicaid since the program began nearly a decade ago.
There is also a savings to the state: It’s estimated that Missouri would save between $932 million and $1 billion in annual budget savings by 2026. Part of this savings comes from being able to move traditional Medicaid patients – which the state pays 34 percent of each year, compared to just 10 percent with Medicaid Expansion – to the “expanded” category, freeing up funds for other priorities such as K-12 education, transportation, law enforcement, and even help cover the state’s 10 percent obligation under Medicaid Expansion. This also helps many Missourians who have jobs that don’t come with health insurance, many of whom earn less than $18,000.
In addition to protecting frontline healthcare jobs, economic analysts project that Medicaid Expansion will create more than 26,000 jobs in its first five years. Nearly 80 percent of the job growth would be outside of the healthcare industry, with most of the new jobs generated outside the state’s big cities.
On a yearly average, Missouri would see a $2.5 billion increase in economic output, a $1.6 billion increase in gross domestic product and a $1.1 billion increase in average personal income -- or, put another way, each Missouri household would have an extra $500 on average.
How does Medicaid Expansion affect rural health care?
It’s no secret that many health systems and hospitals in rural parts of Missouri are rapidly closing. Part of this is because health systems subsidize large parts of uninsured patients’ care, leading to drains on budgets that are already extremely tight – causing some hospitals to close completely. This is a devastating loss for patients in rural areas, who rely on local institutions that keep them from having to travel far for care, especially in emergency situations, and for employment.
It also brings back jobs to these rural communities. Reimbursements for care would potentially allow these hospitals to hire more employees and continue to provide services its communities desperately need.