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Opinion: Medicaid reforms are necessary to protect Missouri’s budget priorities


As a representative of the people and a member of the House Budget Committee, my priority is making sure taxpayer dollars go to the state programs we most desperately need funded. That is why this upcoming legislative session is going to be one of the most important in the history of Missouri. In short, it will take a herculean effort to save our state’s budget

Hospitals and their allies spent nearly $10 million to convince voters in August to approve Medicaid expansion. As a result, we can expect another 100,000 Missourians to join our state’s Medicaid program, known as MO HealthNet. 

Rep. Hannah Kelly

While the federal government may cover 90 percent of the costs of the newly-added Medicaid recipients, it is anticipated that expansion will cost our state $200 million. It’s important to note that this won’t be a one-time cost, and the ballot measure didn’t provide a funding mechanism to cover any increased state spending associated with Medicaid expansion.

In already tough economic times, where general revenue is down, Medicaid expansion will only steal away more resources from an already tight budget. What’s more, our state simply cannot borrow its way out of this hole. In Missouri, we are constitutionally required to have a balanced budget every year. That means when costs exceed projected revenue, programs are going to have to get cut. 

The bottom line is that if no changes or reforms are made to our state’s Medicaid program, that $200 million is going to have to come out of programs like our schools, childhood education, infrastructure, public safety, or other vital programs. It is unrealistic to think that Missouri can add 100,000 new individuals to Missouri HealthNet without a funding mechanism to support them. 

First and foremost, tax increases on income, property, sales or anything else, are out of the question. During a deep pandemic-caused economic recession, it would be both irresponsible and cruel for our state to impose new taxes on Missourians. 

Therefore, our state’s best bet is to embark on the task of reducing costs by reforming our state’s Medicaid program if we are to make good on the will of Missouri voters and deliver expansion while sustaining funding for other public services. 

Hospitals and medical care providers sold Medicaid expansion to voters on the promise that it will save our state billions of dollars. It’s appropriate that they join with lawmakers to implement reforms to ensure expansion is sustainable. 

Fortunately, there are several potential solutions immediately available for us to implement. One idea is to cap the reimbursement rates to hospitals for services they provide, which will help mitigate costs. Hospitals in urban areas are currently reimbursed at three times the rate of rural hospitals, so this decision will lead to more equitable treatment of our state’s hospital systems. We should also consider pro-market reforms that will increase competition among providers, increase consumer choices and keep costs low. 

It is clear that steps need to be taken to reform Medicaid. This absolutely should be a bipartisan effort with the full input of all concerned parties.

There are moderate, commonsense solutions that can be implemented to help deliver health care services while saving our state’s budget. That is why this upcoming session, Medicaid reform needs to be at the top of everyone’s legislative agenda.