Republicans in Washington, D.C., are searching for ways to reduce federal spending to offset the cost of implementing parts of President Donald Trump’s agenda.
One possibility already hinted at by the House of Representatives is cuts to Medicaid, the joint federal and state program that helps with medical costs for people whose income and resources are very limited.
While the plan is in the early stages, it would direct the committee that oversees Medicaid to reduce the amount the federal government spends in a way that all but guarantees cuts to the program.
Medicaid provides insurance coverage for more than 70 million Americans. In Missouri, the program — called MO HealthNet — covers more than 1.3 million, or one in five people in the state, across different eligibility groups.
About 70% of Missouri’s Medicaid funding comes from the federal government. And for the adult expansion group – Missourians who could enroll in Medicaid after voters passed expansion for the program in 2021 — the federal government picks up 90% of the tab.
Missouri’s Republican Reps. Mark Alford, Sam Graves, Ann Wagner, Jason Smith, Bob Onder and Eric Burlison all voted for the House budget proposal. Democratic Reps. Emanuel Cleaver and Wesley Bell voted against. The measure narrowly passed 217-215.
Despite voting for the proposal, Smith, who chairs the powerful House Ways and Means Committee, said Thursday he had doubts over whether the accounting House Republicans used in the proposal will abide by Senate rules.
Cuts to expansion could mean about $560 billion in savings for the federal government over a decade. House Republicans want to use that savings to help pay for extending Trump’s 2017 tax cuts and other programs like border security, energy and defense spending. The extension is expected to cost $4.5 trillion.
Trump said last week that Republicans “wouldn’t touch” Medicaid, Medicare or Social Security in their hunt to cut funding.
Who relies on Medicaid in Missouri?
The 2021 vote in Missouri expanded who was eligible to enroll in Medicaid in the state to adults who make up to 138% of the federal poverty level. The expansion opened the door for about 340,000 Missourians to enroll in the program.
Prior to Medicaid expansion under the Affordable Care Act, Medicaid was mostly restricted for those who were disabled, elderly or pregnant.
Rural Missourians rely more heavily on Medicaid expansion than Missourians in other areas. An analysis from the Georgetown University Center for Children and Families found that in rural Missouri, 15.2% of non-elderly adults were enrolled in Medicaid, compared to 12.2% in urban areas.
The trend is similar for children in Missouri — 38.3% of rural children rely on Medicaid or the Children’s Health Insurance Program (CHIP), compared to 35.5% of urban children.
Across the country, 41 states and Washington, D.C., have expanded Medicaid. Some states, like Illinois, have trigger laws that reverse expansion if funding from the federal government is reduced.
Missouri and six states passed Medicaid via ballot measures, meaning the legislature cannot pass changes to the expansion without voter approval.
How Missouri pays for Medicaid
If the entire federal match for covering Medicaid expansion for the 340,000 Missourians were eliminated, it would cost the state $7.3 billion annually, according to an analysis by the Kaiser Family Foundation.
Representatives from the department that oversees Missouri’s Medicaid program told lawmakers that the state could stand to lose between $30 million to $35 million for every percentage point decrease in the rate that the federal government pays for the program.
If all states across the country were to absorb the cost of the federal government’s 90% match rate, states’ spending on Medicaid would increase by 17%, or about $626 billion.
Republican Sen. John Hawley of Missouri announced that he filed an amendment in the Senate to prohibit budget cuts for Medicaid.
“I would not do severe cuts to Medicaid,” Hawley told the Huffington Post.
Congressional and Missouri lawmakers search for other places for Medicaid cuts
Another path Congressional Republicans are exploring for budget cuts includes imposing work requirements for Americans who seek health insurance coverage through Medicaid.
Rep. Jim Jordan, a Republican from Ohio, said lawmakers may pursue work requirements, which would result in a lower rate of cuts compared to reducing or eliminating the federal match rate.
Missouri’s Rep. Mark Alford, who gained national attention after a rowdy town hall in Belton, said that he would vote in support of work requirements for Medicaid. Last month, Rep. Bob Onder posted about his support for work requirements, calling it “good policy.”
An analysis from the Center on Budget Policy and Priorities found that work requirements would put about 36 million Americans at risk of losing their Medicaid coverage, including about 457,000 in Missouri as of June of last year.
During Trump’s first term, work requirements were an option for spending cuts his administration explored. His administration encouraged states to adopt certain waivers that only allowed Medicaid coverage if individuals met work and reporting requirements.
Arkansas was the only state to implement work requirements from the waiver, before a federal court said the requirements were against the law. About 18,000 people lost coverage as a result.
It’s a path lawmakers in Missouri are now considering, citing interest from the federal government in pursuing similar plans.
Missouri state Sen. Jill Carter, a southwest Missouri Republican, is sponsoring a constitutional amendment to require Medicaid enrollees to work or participate in activities like school, volunteering or job searching to be eligible for the program. It would only go into effect with voter approval.
Medicaid cuts via work requirements in Missouri
Carter’s proposal would apply to able-bodied Missourians ages 19 to 49 who are enrolled in Medicaid. They would be required to complete and document 80 hours a month of work or other activities.
Data show that most adults who are enrolled in Medicaid are working or face barriers to finding work. A KFF analysis of work requirements found that 44% of adults on Medicaid aged 19-64 are working full time, while another 20% are working part time — about 16.6 million people.
Among adults who were not working, 12% cited caregiving responsibilities, 10% cited illness or disability, 8% cited retirement or difficulty finding work and another 7% cited school.
Estimates from the Congressional Budget Office found that if work requirements were passed, they would impact about 15 million Americans and 1.5 million people would lose eligibility for federal funding.
The report found that the federal government would save about $109 billion over a decade and it could result in about 600,000 becoming uninsured. It also found that imposing work requirements leads to little increase in employment, due to disability or caregiving responsibilities cited by those who currently do not work.
This story was originally published by The Beacon, a fellow member of the KC Media Collective.
