Barring 11th-hour deal, Missouri Legislature to defund voter-approved Medicaid expansion

(The Center Square) – After nine hours of deliberation, the Missouri Senate early Thursday approved a $34 billion Fiscal Year 2022 (FY22) budget in a 24-10 vote opposed by all Democrats because it doesn’t fund the Medicaid expansion voters approved in August.

Futile attempts were made to restore the $130 million state match to draw $2 billion in federal dollars to provide 275,000 low-income Missouri adults Medicaid coverage, but only four of the chamber’s 24 Republicans agreed to do so.

Unless an 11th-hour compromise surfaces during conferencing by chamber budget-writers next week, the FY22 spending plan lawmakers deliver to Gov. Mike Parson by May 7 will likely “defund” Medicaid expansion in an effort to induce a lawsuit Republicans believe they can win.

Support for defunding Medicaid expansion is coalescing behind a constitutional argument that implementing Amendment 2 would be unconstitutional under state law. Under the Missouri Constitution, initiatives that call for the state to spend money must provide a corresponding revenue source.

Amendment 2 fails to do that, Republicans argue, nor does it specifically direct lawmakers to appropriate money to fund expansion.

The state’s Western District Court of Appeals refused last summer to consider a lawsuit spelling out those arguments before Amendment 2 was adopted by 53 percent of voters in August.

The inevitability of an induced court battle was cemented earlier this month when the House adopted a budget without Medicaid expansion funding and then the Senate Appropriations Committee last week rejected a compromise restoring $60 million of the $130 million in Parson’s budget request to implement Amendment 2.

The proposed FY22 budget allocates nearly $16 billion in healthcare spending, including $2.8 billion for state departments of Mental Health, $2.3 billion for Health & Senior Services, and $10.7 billion for Social Services.

Sen. John Rizzo, D-Independence, submitted the same amendment increasing state funding by about $15.3 million to garner $140 million in federal Medicaid money for each of the three healthcare spending bills.

The amendments were shot down in 20-14 votes but drew support from four Republicans, including Majority Floor Leader Sen. Caleb Rowden, R-Columbia.

Rowden, who opposed Amendment 2 and is adamantly against Medicaid expansion, said he cannot go against the will of the people.

“The question before us tonight is really simply if we should fund the expansion the people of Missouri voted on,” Rowden said. “I believe we should.”

Appropriation Chair Sen. Dan Hegeman, R-Crosby, voted against restoring expansion money but acknowledged lawmakers are on a path full of “unknowns” and “what ifs” if they don’t fund expansion by July 1.

Defunding Medicaid expansion was praised in a Thursday statement by Americans for Prosperity Missouri Director Jeremy Cady as a stand “against wasteful spending and fiscal irresponsibility.”

Cady said Missourians “voted for a program it could not afford under the misguided promise that it would save taxpayers $39 million in the first year. This is a blatant falsehood.”

Americans For Prosperity maintains expansion would increase Medicaid costs by an estimated $349 million annually.

American Cancer Society/Cancer Action Network (ACS/CAN) Missouri Director of Government Relations Emily Kalmer in a Thursday statement said the organizations were “disappointed to see the Senate ignoring the will of Missouri voters.”

“We know the health insurance coverage provided through an expansion of MO HealthNet eligibility will improve outcomes, address health and cancer disparities,” Kalmer said, noting Medicaid expansion can “reduce the burden of cancer by offering enrollees access to doctor visits, preventive services and timely cancer screenings. Early detection of cancer increases a patient’s chance of survival.”

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