Missouri governor won't fund Medicaid expansion, flouting state Constitution

Missouri Gov. Mike Parson announced Thursday that he will not expand Medicaid, ignoring the state Constitution that requires it after voters supported the measure in a referendum.

Health care advocates and Democratic leaders in the state immediately blasted Parson, a Republican. Many said he had gone back on his word to fulfill the wish of the voters, who last year supported the measure to expand Medicaid to an estimated 275,000 low-income Missourians beginning July 1.

"The governor lied," said Rep. Peter Merideth, the ranking Democrat on the Missouri House Budget Committee. "He said he represented all of Missouri and that he would uphold the Constitution, but he's not. He's a former sheriff, and I would have thought he would know better than to violate the Constitution, but here we are: He lied, and Missourians are going to pay the price."

In a contentious 2020 ballot measure, 53 percent of Missouri voters supported expanding Medicaid eligibility to the state's low-income workers who can't afford health insurance but earn too much to access the state's Medicaid program.

Parson, however, claimed that the state could not afford to fund the program's expansion after the Republican-controlled state Assembly refused to fund that aspect of the budget. The governor formally withdrew the state's plan for Medicaid expansion Thursday.

"Without a revenue source or funding authority from the General Assembly, we are unable to proceed with the expansion at this time and must withdraw our State Plan Amendments to ensure Missouri’s existing MO HealthNet program remains solvent,” he said in a statement, referring to the name of the state's Medicaid program.

The budget released by Parson's office earlier this year included funding for expansion, but Republicans in the state Assembly voted to strip it from the state budget. House Budget Committee Chair Cody Smith, a Republican, began the push and said the state could not afford to provide health care coverage to those 275,000 Missourians who earn less than $18,000 a year.

Smith did not immediately respond to a request for comment.

Expansion would have cost the state $130 million, but it would also secure a federal match of about $1.4 billion to pay for the program. The state would also get an additional $1 billion over the next two years to help implement the program after the Biden administration sweetened the deal for the minority of states that have refused expansion.

"State after state has shown Medicaid expansion's benefits for their economy," said Amy Blouin, the president and CEO of the Missouri Budget Project, a nonprofit that analyzes the state's budget and policy priorities. "We believe there is plenty of money in the state budget to implement it. The fact that we will have additional federal funds through the American Rescue Plan that come to states that expand Medicaid now also frees up the general revenue. It just does not make sense to not do this."

Parson blamed the Assembly and claimed his hands were tied by their decision to remove expansion funding from the budget. He reiterated this in a letter he sent to the Centers for Medicare & Medicaid Services on Thursday.

"Because the initiative petition was not self-funding and the General Assembly declined to appropriate any funding," he wrote in the letter, the state's executive branch "lacks the authority to proceed" with expansion.

A CMS spokesman confirmed the agency was aware of Missouri's decision.

Meanwhile, the governor's characterization was rejected by health care advocates in the state, many of whom noted that he could have funded the program with the federal dollars the state would have received via expansion and passed a supplemental budget later in the year.

"It is not true that he didn't have the money available or the option," said Dina van der Zalm, the health care organizer for the Missouri Rural Crisis Center, a progressive nonprofit. "This is just a good political cover."

It is unclear what could happen from here. The state is obligated by its own Constitution to provide Medicaid coverage to a larger population beginning July 1, but it did not drastically increase its Medicaid spending to support that influx.

Related: “It’s the stimulus funds that are really the motivation. I think it has really changed some hearts and minds in the Legislature," one Wyoming lawmaker said.

The billions of federal dollars the state would gain for expanding Medicaid could also be in jeopardy if they do not provide the funding to secure the federal match.

But many said the state will undoubtedly face a costly lawsuit from expansion supporters in the coming days, many of whom expected Parson to uphold the measure — even if the state's Republican supermajority attempted to torpedo expansion in the budget.

Richard von Glahn, the organizing director of Missouri Jobs with Justice, a progressive labor group that pushed for Medicaid expansion, wouldn't comment about the timeline of a potential lawsuit, but he emphasized that there were many interested parties in the state.

"There's a broad coalition of hundreds of groups that supported Medicaid expansion," he said. "There's hundreds of thousands of Missourians who are affected by the governor's actions and whose constitutional rights could be violated. So, we're all interested in supporting the Constitution."