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Medicaid Expansion: Implementation update & implications for Missouri

Written by Timothy D. McBride, PhD, MS, the Bernard Becker Professor at the Brown School and co-director of the Center for Health Economics & Policy at the Institute for Public Health

Tim McBride

Missouri voters passed a Constitutional amendment to expand Medicaid in August 2020 to include all adults age 19-64 earning up to 138% of the federal poverty line FPL ($30,305 for a family of three).  Implementation of the expansion is scheduled to begin July 1, 2021 and the extensive work on implementation by state agencies and others has been preceding as required, and at an accelerated pace.

Researchers in the Center for Health Economics and Policy (CHEP), working with colleagues in the Center for Health Law at Saint Louis University, have been working on a series of documents and papers to help understand the characteristics of those who will enroll in Medicaid after July 1, some of the challenges and opportunities the state of Missouri will face.

According to estimates released by the Governor, an estimated 274,312 persons will be in the adult expansion group in the first year of expansion. According to analysis by CHEP researchers, roughly three-fifths (62%) of the adult expansion group will be previously uninsured, with about 40% who will be moving into the Medicaid program from private insurance, mostly from the individual marketplace plans.  Analysis also shows that the new expansion’s eligible individuals will disproportionately live in rural areas in Missouri (41%) as compared to their proportion in the population, with substantial variation across the state, mostly because current uninsured rates are higher in rural areas.  The new expansion group will also tend to be younger and more likely to be employed than the current Medicaid enrollee population.

Further analysis by the research group (forthcoming) has shown that while the new expansion group will tend to have a slightly better health status than current Medicaid enrollees, and fewer health limitations limiting their ability to work, it will also be the case that nearly half will at least one chronic condition, a similar proportion found in the general population and the current Medicaid enrollee population.  In general, new Medicaid enrollees will be less likely to have significant chronic conditions such as diabetes, heart disease, and stroke.

A significant share of the new expansion group currently face barriers limiting their access to care, primarily the current uninsured.  Only about half of the current uninsured report having a usual source of care (e.g., primary care physician) and a relatively high percentage report delaying care due to cost, including dental care. These barriers are less likely to be faced by those who currently hold health insurance, such as through a marketplace plan.

Challenges to expansion remain, but many opportunities do as well.  Interested parties around the state are working on implementation issues, including enrollment and outreach of the expansion population, helping the state develop systems and procedures to implement Medicaid expansion.

An important milestone for expansion, enumerated in the Constitutional amendment, was the requirement for the state to submit a “state plan amendment” by March 1, a deadline which has been met by hard working employees in the Department of Social Services.  In addition, the state is creating a new, streamlined application form and system which should significantly simplify the enrollment process, and increase efficiency.

An additional step in the process is the approval of the budget for the Medicaid expansion.  The Governor’s proposed budget included general revenue funds for the expansion of Medicaid, and his budget director indicated that expansion would not require cuts to other parts of the state’s budget.  Per estimates the expansion will cost the state about $1.6 billion in FY2022, however the federal government will pay 90% of the costs of expansion ($1.4 billion).  After additional savings are considered, the state’s general revenue share is estimated to be approximately $130 million.  However, the passage of the American Rescue Plan means that the state of Missouri will receive an additional $1.15 billion, according to some estimates, over two years when the state expands Medicaid. The Legislature is currently debating how to handle Medicaid in the budget process.

The expansion of Medicaid in Missouri will create many opportunities for research on the implementation of Medicaid, a point discussed in depth in a Workshop sponsored by CHEP in March, 2021.  Tracking the impact of Medicaid expansion on low income persons, rural hospital systems, and others living in underserved areas will remain an important topic for many to follow for years.