1. Running Head: MO MEDICAID EXPANSION 1
The Case for Expanding Medicaid Eligibility in Missouri
By Liz Rolf
University of Missouri-St. Louis
May 14, 2015

2. MO MEDICAID EXPANSION 2
Executive Summary
This policy brief will make a case for expanding Medicaid eligibility to all adult
Missouri citizens earning yearly incomes below 138% of the federal poverty limit, as
opposed to the extremely limited qualifiers that currently govern Medicaid eligibility in
Missouri. Medicaid expansion will increase the health of all Missourians, both by directly
improving the health of its beneficiaries and by indirectly improving the overall health of
the state’s population. More than 24,000 jobs in the health care field will be created by
increasing demand for regular health care services, due to the influx of new patients.
Rural hospitals, often serving primarily low-income individuals, will not be forced to
close due to the costs of caring for indigent patients. Revenues gained by expanding
Medicaid will far outweigh the expenses, both now and in the future. Expanding
Medicaid access to this population is the correct choice on political, economical, and
moral grounds, as this brief will demonstrate.
Introduction
When the Affordable Care Act (ACA) was signed into law on March 23rd, 2010, it
included a provision that required states to expand Medicaid eligibility to all United
States citizens who earned less than 138% of the yearly federal poverty limit applicable
to their family size, as such individuals were ruled to earn too little to qualify for
subsidies used to purchase health insurance plans through the Health Insurance
Marketplace (Kaiser Family Foundation [KFF], 2013). Individuals in this situation are
referred to as being in the “coverage gap”, or just “the gap”. The Medicaid provision was
struck down by the Supreme Court in 2012, thus leaving states open to decide for
themselves whether or not they wanted to expand Medicaid eligibility in their state, and
what, if any, new eligibility criteria might be used (KFF, 2012). Missouri elected not to
expand their eligibility criteria in any way, which leaves the state with some of the
tightest restrictions in the country (Missouri Health Care for All [MHCFA], 2013). This
leaves approximately 300,000 Missourians without access to affordable health care
(MHCFA, 2013). This policy brief proposes that Missouri enact policy changes that
would expand Medicaid eligibility to those individuals who earn too little to qualify for
health insurance premium subsidies, as the ACA originally intended.

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The Directly Affected Population
As of 2015, it is estimated that approximately 300,000 Missourians who are
currently denied adequate health care insurance and access would benefit if Medicaid
eligibility were expanded to include all adults who earn less than 138% of the federal
poverty limit (FPL) for their family size (the number of adults plus the number of
dependent children in the household) (MHCFA, 2013). Of the population in the coverage
gap, approximately 147,000 are poor, non-elderly adults (Garfield, Damico, Stephens, &
Rouhani, 2014). Of those individuals, 63% do not have dependent children, 67% are in a
working family, and 55% are female (Garfield et al., 2014). An additional 113,000
Missourians are also in need of Medicaid expansion (MHCFA, 2013). This includes
children who are not eligible for the Children’s Health Insurance Program (CHIP),
custodial parents making more than $4,500 yearly, and elderly, blind, or disabled
individuals making more than $10,000 yearly (Lipstein, 2015).
For a brief example of a typical victim of the coverage gap, Joanna’s story can be
reviewed. Joanna, whose story begins in 2008, shared her story with Missouri Health
Care For All recently. Joanna, a 42-year-old woman, has had rheumatoid arthritis since
she was a teenager. This was controlled through the use of a targeted biological
immunosuppressant, an effective but expensive medication (approximately $3,000
monthly, with no generic options available), paid for through her employer-provided
health insurance. When Joanna was laid off, she was unable to afford her medication, and
within three months her rheumatoid arthritis relapsed, causing rapid joint damage and
degeneration, which made it impossible for Joanna to find a new job, where she might get
health insurance once more (assuming she survived the year-long pre-existing conditions
exclusion policy in place at the time).
Purchasing a private insurance plan was not an option, as no insurer offered
would accept a client with such a pre-existing condition, and the state’s catastrophic
insurance pool would only cover some inpatient services at the cost of $4,000 a month.
But because the joint damage was not yet considered to be permanently disabling, she
was not eligible for Medicaid. So Joanna went without her medication, accumulating
more joint damage as time went on. After two years without the medication, Joanna’s
joint damage reached a point where it could finally be classified as permanently,
completely disabling, to the point where she would never be able to work again. Joanna

4. MO MEDICAID EXPANSION 4
will spend the rest of her life on Medicaid and receiving Social Security Disability
payments. Had she had access to Medicaid when she was laid off, she would have been
able to continue treatment and stay healthy until she found a new job. But because she
did not have access to Medicaid when it could have been a temporary fix for her
situation, she will now be on Medicaid permanently.
The Indirectly Affected Population
The lack of affordable health care access affects not only those individuals in the
coverage gap, but also affects every Missourian in some way. 300,000 individuals going
without health insurance means that many will not see a doctor unless a medical problem
becomes an emergency. It follows that mostly minor but still contagious illnesses
(influenza, strep throat, etc.) will not be treated quickly and are more likely to spread,
particularly since many low-income workers are in service positions that involve a large
amount of contact with the general public (fast food workers, retail clerks, etc.). This also
means that many medical problems, both acute and chronic, that could be prevented or
treated at low cost are not dealt with until they become unavoidable, at which point the
cost may be catastrophic.
It is not only through an increase in exposure to contagious illnesses that all
Missourians might suffer, but there are significant financial ramifications, both public
and personal, as well. The ACA intended to make up for provisions that reduced hospital
Medicare reimbursements and lower disproportionate share funding (DSH), paid by the
federal government to offset the costs of care for uninsured patients, through an increase
in the number of covered patients seeking health care services, a scenario that would have
been profitable for hospitals (Smith, 2015). Instead, in states that did not expand
Medicaid, individuals without access to regular health care have continued to utilize
emergency rooms to treat both serious acute conditions that could have been prevented
and chronic conditions that would be better treated by regular visits with a physician
(Smith, 2015). Since DSH funding has dropped, hospitals aren’t able to recover the cost
of treating such patients, and at least three hospitals in rural Missouri have closed in the
last 18 months due to this loss of funding (Smith, 2015). Hospital closures, particularly in
rural communities, dramatically reduce the availability of health care services for both
insured patients and the uninsured. Of course, when a hospital closes, the employees who

5. MO MEDICAID EXPANSION 5
worked in said hospital are left unemployed, which has a negative impact on the local
economy.
The cost of uncompensated care in hospitals that do not close is passed on to
insured patients, so that hospitals can make up some of the income shortfall (MHCFA,
2013). Uncompensated services are estimated to raise the cost of family health insurance
premiums by approximately $1,000 every year (MHCFA, 2013). The rising cost of health
insurance is unsustainable for many Missouri families.
Missourians are missing out on the approximately 24,000 new health care jobs
that will come with expanded utilization of health care services (MHCFA, 2013).
Missouri taxpayers also stand to lose both the federal taxes that they have already
paid (which are earmarked for Missouri Medicaid expansion only) and the increased tax
base that would come with the increase in health care jobs (Flint, 2014).
The Current Policy
Missouri began participating in Medicaid in 1967, two years after the March 1965
passage of the Social Security Amendments of 1965 at the federal level (Coleman, 2014;
KFF, Medicaid timeline). Medicaid in the state of Missouri is called MO HealthNet, but
it will be referred to as Medicaid in this policy brief, in keeping with both the ACA
provision and the commonly known name for the program. Missouri’s Medicaid program
has largely stayed the same since its inception. The populations currently covered by
Medicaid are listed below, according to Coleman’s Missouri Medicaid Basics, Summer
2014 brief:
 Children (Family income of less than (<) 300% of the FPL)
 Custodial Parents (<18% FPL)
 Pregnant women (<196% FPL)
 Disabled individuals (<85% FPL)
 Elderly (<85% FPL)
 Blind individuals (<100% FPL)
 Qualified Medicare beneficiaries (<100% FPL)
This amounts to approximately 830,000 Missourians (Coleman, 2014). The services
available to current Medicaid recipients, and which would be available to new recipients,

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include inpatient and outpatient hospital services, physician services, lab work, and
pharmacy services, among many other services, which are detailed in the policy proposal
section presented later in this document (Coleman, 2014).
Current Medicaid policy fails to address every Missourian who does not either
have a child or a permanent disability, and who does not either have access to affordable
employer-provided health insurance or an income high enough to qualify for premium
subsidies for plans from the federal Health Insurance Marketplace. There are two realistic
possibilities for addressing this issue: a new bill expanding Medicaid eligibility or a bill
that offered health insurance subsidies for Marketplace plans (up to 100% of the
premiums for a silver plan, plus cost-sharing that varies by plan) to all individuals that
would be eligible for coverage under Medicaid expansion. This would basically replace
public insurance with private, for-profit plans, and would require the insured to pay co-
pays for services and medications. While this solution might stand a slightly higher
chance of passing the Missouri legislature, it is not the most appropriate choice, as out-of-
pocket spending costs would be far higher with a Marketplace plan than with Medicaid
($1,948 versus $948, respectively), which would be unrealistic for many individuals
(Hill, 2015). This policy brief recommends the following solution.
Policy Recommendation
The policy proposed by this brief is as follows: expand Medicaid eligibility to all
Missouri citizens who earn less than 138% of the federal poverty limit, exactly as written
in the original ACA. This policy would further the goal of providing all American
citizens with access to affordable, high-quality health care services.
Benefits
In addition to the new enrollees who will benefit from access to affordable health
care, Missouri as a whole will receive impressive economic benefits. In addition to the
estimated 24,000 new jobs created by expansion by 2014, the increase in jobs and
subsequent economic activity is expected to generate an additional $856 million in state
and local taxes between 2014 and 2020, plus an additional $1.4 billion in federal taxes
(University of Missouri School of Medicine [UM], Department of Health Management
and Informatics & Dobson DaVanzo & Associates, LLC., 2012). From 2014 to 2020, it is
also estimated that approximately $9.6 billion (value-added) will be added to the

7. MO MEDICAID EXPANSION 7
Missouri economy (approximately 0.53% of the Missouri gross state product [GSP])
(UM et al., 2012).
Administration
Medicaid expansion would be overseen by the same administration that oversees
the current iteration of Medicaid in Missouri: the MO HealthNet Division of the Missouri
Department of Social Services (DSS) would continue to handle the provision and
payment of services, while the Family Support Division (FSD) offices in each county in
Missouri would handle eligibility for individuals and families (Coleman, 2014).
Services
The same services available to current Medicaid beneficiaries would be available
to new beneficiaries, which are as follows: “inpatient hospital services, outpatient
services, physician office services, family planning services and supplies, nursing facility
services, home health services, durable medical equipment, lab work, radiology services,
nurse practitioner services, dental services, non-emergency medical transport, pharmacy
services, rehabilitation and other specialty services, mental health services, and
psychiatric care services” (Coleman, 2014).
Service Delivery
While policy implementation and administration of the Medicaid expansion
program would fall to the MO HealthNet Division, actual provision of services would fall
to the appropriate health care providers who currently provide services to Missouri
patients (physicians, hospitals, outpatient centers, pharmacies, etc.).
Financing
Medicaid expansion in Missouri will be funded entirely by the federal
government (from taxes already collected) through 2016; starting in 2017, the federal
share of the cost of Medicaid expansion will drop gradually until it stabilizes at covering
90% of the costs of the newly eligible enrollees in 2020 (UM et al., 2012). In total, the
federal government will cover 96.1% of the costs of Medicaid expansion between 2014-
2020 ($8.2 billion), while Missouri will pay 3.9% of the costs during the same period
($332.9 million) (UM et al., 2012). In 2011, the average estimated cost of a single adult
enrolled in Medicaid in Missouri was $6,556 (almost the same as the legal maximum
deductible of Health Insurance Marketplace plans) (UM et al., 2012). The total cost of

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Medicaid expansion to the state of Missouri is easily covered through the increase in state
and local taxes that will come with the influx of new health care jobs and businesses
($856 million between 2014-2020), which will leave the state with approximately $523.1
million in surplus funds. This makes Medicaid expansion the best and most cost-effective
financial decision for the state.
Evaluation
Evaluation of Medicaid expansion will be handled by the MO HealthNet Division
and the Research and Evaluation Unit of the Missouri Department of Social Services in
the same way that the current iteration of Medicaid is handled. Providers and facilities
will be evaluated based on their patient outcomes, although more emphasis should be
placed on the patient’s health status when they begin care/are admitted to a health care
facility. This policy also proposes that new Medicaid beneficiaries be surveyed as to their
employment status and occupation, to ascertain whether those factors affect their inability
to obtain employer-provided health insurance, and how such issues might be approached
on a policy level, based on the results.
Opposition
As it currently stands, opposition to Medicaid expansion follows the party line,
where the issue is supported by Democratic politicians and opposed entirely by many
Republican politicians. Opponents typically take issue with the government taking a
larger role in health care administration, arguing that for-profit businesses do a better job
of managing such programs at lower costs to policyholders. This has been proven to be
false, as for-profit firms typically have administrative costs of 12%, compared to the 4%
administrative costs found in Medicare and Medicaid (Philipson, 2013). In addition, for-
profit firms have the responsibility of earning profit for their stockholders and executives,
a burden that government programs do not share. Of course, there is also the ideological
position that Medicaid “makes people lazy and dependent on the government for
everything”. This is also false, given that 67% of potential Medicaid beneficiaries are
members of a working family (MHCFA, 2013).
Addressing the opposition requires efforts on multiple fronts. The first tactic,
which will likely be effective but will have a high temporary cost to public good, is to
pressure rural politicians (who are far more likely to both have poorer constituents and be

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Republican) by making them explicitly aware of the precarious nature of any hospitals in
their districts, which bear a higher burden of uncompensated care, and thus are more
likely to be hit by reductions in DSH funding. Given that three rural hospitals have closed
in the last 18 months, this has become a feasible option, as it is having an immediate
impact on the constituents of that district. Making those constituents aware of their
elected representative’s role in the loss of their local hospitals could be a profound
motivator for politicians who want to keep their jobs.
Opposing politicians are also more likely to openly discuss the role that their
religious faith has in their politics, a propensity which can be used in multiple ways. First,
the contradictions between the teachings of their religions and their actions can be used to
demonstrate their hypocrisy. Second, faith leaders can be recruited to influence their
congregations’ viewpoints on Medicaid expansion, which in turn would affect how
constituents interact with their legislators. The Metropolitan Congregations United
(MCU) has done remarkable work on this front, and has been working to expand their
membership into more rural congregations.
Finally, opponents tend to promote their “pro-business” viewpoints. Engaging the
political arms of Missouri health care businesses (hospital networks, pharmaceutical
companies, medical schools, etc.) could be helpful in presenting the economic benefits of
Medicaid expansion.
Conclusion
After the implementation of the Affordable Care Act and the Supreme Court
decision that struck down the mandatory Medicaid expansion provision, Missouri elected
not to expand Medicaid eligibility to all adults earning below 138% of the federal poverty
level, thus leaving them without access to either Medicaid or subsidies for plans
purchased through the federal Health Insurance Marketplace. This choice affects 300,000
Missourians directly, and every Missourian indirectly, through a loss of new jobs, a
reduction in the tax base and gross state product, an increase in the burden of paying for
uncompensated health care through insurance plan premium increases, and a greater risk
of catching an infection from a low-wage worker who is unable to afford a doctor’s visit
or antibiotics.

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The solution is to expand Medicaid eligibility to all adults earning below 138% of
the federal poverty level. This policy brief seeks to inform legislators and their
constituents of the facts of the issue, and to provide information and strategies that will
influence legislators and enable constituents to advocate for Medicaid expansion to their
legislators. Legislators, bring Medicaid expansion to the floor for a real discussion and a
vote to enact this policy. Constituents, contact your legislators and let them know that the
people who put them into office support Medicaid expansion, and that they are watching
their legislators’ choices. At some point, any individual could need Medicaid. Take the
actions above to make sure that the option is available, should you ever need it.

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References
Coleman, A. (2014). Missouri Medicaid basics: Summer 2014. Retrieved from
https://www.mffh.org/mm/files/MedicaidBasics2014.pdf
Flint, S. (2014, May 27). Who loses when a state declines the Medicaid expansion?
Health Social Work, 39(2). Retrieved from http://
hsw.oxfordjournals.org.ezproxy.umsl.edu/content/39/2/69.full
Garfield, R., Damico,. A., Stephens, J., & Rouhani, S. (2014, November 12). The
coverage gap: Uninsured poor adults in states that do no expand Medicaid - An
update. Retrieved from http://kff.org/health-reform/issue-brief/the-coverage-gap-
uninsured-poor-adults-in-states-that-do-not-expand-medicaid-an-update/
Hill, S. C. (2015). Medicaid Expansion In Opt-Out States Would Produce Consumer
Savings And Less Financial Burden Than Exchange Coverage. Health Affairs,
34(2), 340-349. doi:10.1377/hlthaff.2014.1058
Kaiser Family Foundation. (2012, July). A guide to the Supreme Court’s Affordable Care
Act decision. Retrieved from
https://kaiserfamilyfoundation.files.wordpress.com/2013/01/8332.pdf
Kaiser Family Foundation. Medicaid timeline. Retrieved from
http://kff.org/medicaid/timeline/medicaid-timeline/
Kaiser Family Foundation. (2013, April 25). Summary of the Affordable Care Act.
Retrieved from http://kff.org/health-reform/fact-sheet/summary-of-the-
affordable-care-act/
Kenning, C. (2015, February 13). Study: Ky Medicaid expansion showing benefits. The
Courier-Journal. Retrieved from
http://www.usatoday.com/story/news/local/2015/02/12/medicaid-expansion-
study-released-today/23284821/

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Lipstein, S. H. (2015, January 14). Missouri legislators should consider Medicaid
expansion. St. Louis Post-Dispatch. Retrieved from http://www.stltoday.com/
news/opinion/missouri-legislators-should-consider-medicaid-expansion/
article_1d4afb33-e58c-5de6-9648-3a217fb42bb4.html
Missouri Health Care for All. (2013). Expand Medicaid in Missouri. Retrieved from
http:// missourihealthcareforall.org/wp-content/uploads/2013/07/Medicaid-Expansion-
Fact-Sheet-2014.pdf
Missouri Medicaid Coalition. (n.d.). Why invest now. Retrieved from
http://www.momedicaidcoalition.org/invest
Philipson, T. (2013, October 20). What’s wrong with private insurance?. Retrieved from
http://www.forbes.com/sites/tomasphilipson/2013/10/20/whats-wrong-with-
private-insurance/
Smith, A. (2015, February 11). Facing layoffs and closures, rural Missouri hospitals
push for Medicaid expansion. Retrieved from
http://www.khi.org/news/article/facing-layoffs-and-closures-rural-missouri-
hospitals-push-for-medicaid-expa
University of Missouri School of Medicine, Department of Health Management and
Informatics & Dobson DaVanzo & Associates, LLC. (2012, November). The
economic impacts of Medicaid expansion in Missouri. Retrieved from
www.mffh.org/mm/files/MUMedicaidExpansionReport.pdf