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President's Perspective – MHA Report Examines Medicaid Expansion

Medicaid (Feb. 7, 2020) – Last week, our friends at the Missouri Hospital Association released a report on "Medicaid Expansion in Missouri—Economic Implications for Missouri and Interviews Reflecting Arkansas, Indiana and Ohio Experiences."

This report is obviously very timely for the state of Missouri, which is contemplating a ballot initiative regarding Medicaid expansion this year. But it is also important and timely for any state still considering expansion.

To prepare this report, Health Management Associates conducted a targeted analysis of the economic impact of an Affordable Care Act Medicaid Expansion in Missouri, with an emphasis on the effects on the state budget. HMA examined the literature on states' experience with Medicaid expansions and took a deeper look at three largely Republican states that had robust discussions about the potential impact of an expansion prior to its implementation — Ohio, Indiana and Arkansas.

The Missouri report is different from some others you may have seen in that HMA interviewed leaders with first-hand experience in those states and asked them to reflect upon what did and did not work in their state. Here are some of the study's general findings:

  • No State Has Reversed Its Expansion Decision. Despite significant initial concerns in the states interviewed for this report, as well as other Expansion states, no state has reversed its decision to adopt Medicaid expansion in the more than six years since this program was first authorized on a national scale.
  • Arkansas, Indiana and Ohio Expansion Costs Have Been Controlled. Each state meticulously worked to customize its program to keep costs under control and capture state dollars that were then used to fund the state's share of expansion.
  • Expansion Benefits the Mental Health, Substance Use Disorders, and Incarcerated Populations. Large state-only outlays could be used to draw down a 90 percent federal match. Not only are matching funds available for populations currently served with state-only outlays, funding opportunities expand for opioid and addiction prevention programs. Federal money also becomes available to help combat recidivism for incarcerated populations.
  • State Sales Tax Will Grow. Missouri could expect an increase in sales taxes as a result of the Medicaid expansion as other states have experienced.
  • Gains in Employment Are Expected. Experience from other expansion states demonstrates that expansion has had a positive impact on people's ability to seek work, obtain jobs and engage in volunteer work.
  • The Health Care Infrastructure Will Be Enhanced. Improvements in the health care delivery system and quality of care are likely to occur. A reduction in uncompensated care can be expected as well.

These kinds of findings are not necessarily new—in fact they mirror what Gov. Laura Kelly's Medicaid Expansion Task Force found as it looked at other state experiences. But the new report from Missouri is nevertheless significant for Kansas. Despite the compromise worked out between Gov. Kelly and Sen. Jim Denning, political opposition remains. Having a report from a neighboring state that uses firsthand interviews will be very helpful in overcoming that opposition.

Thanks, and best of luck to our partners at the Missouri Hospital Association.
--Tom Bell