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Medicaid Makes (Dollars &) Sense

An oft-cited claim by Medicaid opponents is that Missouri can’t afford to expand Medicaid. But the truth is, Missouri can’t afford NOT to expand and transform our MO HealthNet, Missouri’s Medicaid program. As shown in a newly released report by the Missouri Budget Project, because the federal government would pick up many costs the state is currently paying through its existing Medicaid program, expansion would actually save the state money – funds that could be used for education or other services cut during the Great Recession.

By expanding Medicaid, Missouri would save more than $81 million initially, increasing to more 2015CostvsSavingsthan $100 million annually in later years. Further, these amounts only reflect cost-savings that would result for Missouri and do not include additional state revenue that may result from increased economic activity in the state.  The savings are generated because the federal government would pick up 90 percent of the total cost of providing Medicaid services for a number of people that Missouri currently funds either solely with state dollars or with much higher portions of state dollars. These include:

  • Pregnant women, with incomes below 138% of the federal poverty level, are currently covered by Missouri’s Medicaid program. However, the state currently pays 37 percent of the cost for these women. Expanded Medicaid would lower the state cost to just 10 percent.
  • Similarly, Missouri currently provides mental health services to an estimated 40,000 Missourians with 100% state funds. These individuals would be eligible for Medicaid, with the federal government contributing 90% of the cost.
  • Prisoners in the custody of the Department of Corrections. These childless adults must receive medical care, and it is now fully funded by the state department of corrections.

2015 Expansion Funding TrendThese savings – combined with the contribution of the state’s federal reimbursement allowance, described in the full paper – mean that even once the state is responsible for a 10 percent match, the savings will still outpace the cost. State general revenue will contribute only 6.7 percent of the cost of expansion, and the savings generated will exceed that state revenue contribution.

The math is simple and clear. Missouri must act quickly to take full advantage of the resources being offered to make MO HealthNet more efficient and effective for consumers. The eventual $100+ million savings could be used to fund the K-12 education formula or restore some services cut during the Great Recession.

Get the Full Report, Medicaid Makes (Dollars & Sense): Savings Improve Missouri’s Fiscal Picture

Read MBP’s Press Release

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