Is there such a thing as "free money" from the federal government?
That's the debate ongoing in the Missouri Legislature after the Republican-led House passed a $25 billion state budget that does not tap federal funds to expand Medicaid. The state could get up to $900 million to add somewhere between 260,000 and 300,000 Missourians to Medicaid rolls, with federal dollars covering all the costs for the first three years.
There's the rub.
Republicans say even though the Affordable Care Act is designed to cover all Medicaid expansions in its first few years, by the fourth year states will have to pick up some of those higher costs, and by 2020 the state would be on the hook for 10 percent of the costs.
Republicans do not want to see the state locked into an expanded Medicaid program and tens or even hundreds of millions of dollars in added annual costs. They point out that although 10 percent of the original cost would be $90 million now, health care costs are expected to climb.
Some of the Democrats who have sought to accept the federal funds say the benefits to needy people would outweigh the costs. They also contend that covering low-income people's health care is a bargain when 90 percent of the costs are covered by a different unit of government.
Gov. Jay Nixon, a Democrat, opened the door last Thursday to a compromise that would use federal Medicaid money to buy private health insurance coverage, rather than expanding the government-run program. Arkansas led the way with a similar program.
Missouri already has about 880,000 Medicaid enrollees. They qualify for the health care coverage due to low incomes. Under the Affordable Care Act, the income eligibility could cover those who earn up to 138 percent of the federal poverty level. A single person could earn up to $15,800 and a family of four could qualify with up to $32,500.
Lawmakers say if there was truly free money coming in from the federal government, this would be a no-brainer. But it's not free. Those federal dollars are collected from taxpayers. There's a cost to someone.
In addition, the federal program would eventually tap state matching funds. A vote to expand Medicaid coverage would obligate future Legislatures to higher health care spending.
Others who support the Medicaid expansion have dropped the free money argument. They say it's a bargain to cover hundreds of thousands of poor people's health care for less than $100 million. In addition, they're touting the additional dollars that would flow to hospitals and health care providers in Missouri.
In other words, not only is it the state's moral responsibility to help the poor, it also would boost the economy.
Medicaid's future in the Show-Me state will come down to a showdown over which option costs the most -- either through greater state expenditures or the loss of all those federal dollars that will go somewhere else.