Missouri Offers Most Conservative Vision Yet for Medicaid Expansion

A Missouri lawmaker is pitching a plan that would expand Medicaid but with the toughest work and premium requirements of any current proposal.
by | March 13, 2014 AT 6:30 PM

Tucked into a 30-page bill that proposes significant changes to Missouri health care is a Medicaid expansion plan that would be the most conservative in the country if it passed the legislature and met federal scrutiny. But experts say there’s little chance of that in the bill's current form, which includes cost-sharing and work requirements that have been rejected by the federal government in past cases.  

Missouri legislator, Rep. Noel Torpey, is pitching a plan that borrows from other states that have needed a waiver from the Department of Health and Human Services, but it goes further than any existing proposal by demanding work requirements of most patients and premiums from low-income earners. Efforts to expand the program without restrictions or a privatization model in a state where Republicans control the legislature have gone nowhere, but the state's Democratic governor and lawmakers haven't stopped pressing for it.

Torpey, a Republican, said at a recent hearing that he wanted to exempt pregnant women, students, the elderly and disabled from work and premium requirements, though the bill, as currently written, appears to include all beneficiaries in the cost-sharing measures. Charging premiums for most people is important to instill "ownership," he said.  “I think it really does make a difference,” he maintained.

Arkansas and Iowa, which were the first states to win approval for models that at least partly privatize the expansion program, have influenced other states with more conservative leanings. Like Iowa, Missouri would place people earning between 100 percent and 138 percent of the poverty level in the federal health exchange, where they could purchase commercial plans at Medicaid prices. People earning below that would qualify for traditional Medicaid, which would itself shift largely to private contractors who manage the health needs of patients on a lump sum per member instead of earning a fee for every service.

As the law is currently written, all but the elderly, disabled and “medically frail” would have to show proof of “workforce participation” in order to receive health care benefits, though the bill doesn’t say how to do that. Additionally, all Medicaid patients would face premiums of “no less than one percent of the individual’s income.”

Those demands are either illegal or stand little chance of getting through HHS, which is the agency responsible for approving changes to Medicaid plans that require waivers, according to experts and documents from the agency.

Both Utah and Pennsylvania attempted to tie some type of job-search or work requirement to their Medicaid programs. Utah asked in 2012, before discussions of expansion got underway, for permission to require all recipients to provide community service hours. But the agency rebuffed the state in a letter, saying it could only grant waivers that are “likely to assist in promoting the objectives” of Medicaid, a public program offering health care to low-income individuals.

Pennsylvania Gov. Tom Corbett originally proposed a job-search requirement in his expansion plan for people working less than 20 hours a week, but he gave up that demand during negotiations with HHS, suggesting instead a voluntary incentive program that could reduce premiums for participants.

But even that is a stretch, said Joan Alker, a researcher at Georgetown University Health Policy Institute who follows state waivers. 

“Medicaid is not a job-training program; it’s a health care program,” she said. “This is not an allowable use of Medicaid funds, to be paying for work-search activities or attaching restrictions on eligibility based on your work history.”

Pennsylvania hasn't yet won approval for its plan.

On the premium side, HHS requires a waiver for any state that wants to require monthly payments for people earning less than 150 percent of the federal poverty line, which is $35,775 for a family of four. So far it’s granted them to Iowa and Michigan, but both states’ policies are less severe than the one proposed in Missouri.

Iowa charges premiums for people earning between 50 percent and 138 percent of the poverty line but will waive them for people who meet “healthy behavior” requirements like getting an annual check-up, lowering body weight, or not smoking. The state also won't immediately drop patients for nonpayment if they earn below the poverty level. Michigan is only charging premiums for people earning above the poverty line and doesn’t allow the program to deny eligibility for nonpayment.

HHS is effectively setting new benchmarks for how far it’s willing to go with premiums in those cases, and right now Missouri falls outside that, Alker said. “HHS is sort of setting new precedents,” she said. “A lot of important medical policy gets set in these waivers.”

While some Republican lawmakers insisted the provisions they included in the plan could pass HHS scrutiny, the bill’s sponsor has expressed a willingness to amend the legislation, said Sidney Watson, a law professor at St. Louis University School of Law who specializes in health care access for the poor.

“I think this ought to be taken as a first draft of the bill,” she said. “What became clear from the hearings on Monday was that the sponsor was open to suggestions.”