Expert predicts lawsuits coming regardless of Missouri Medicaid funding

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JEFFERSON CITY. Mo. — Missouri voters changed the constitution back in August to expand Medicaid to those making less than $18,000 a year, but Missouri lawmakers have decided not to fund the expansion. So what’s next?

Last August, Missouri voters approved a ballot measure allowing an additional 275,000 Missourians to become eligible for Medicaid expansion on July 1.

Now it’s up to Gov. Mike Parson whether those newly eligible by the constitutional amendment should be accepted into Mo HealthNet, but the answer could end up in a lawsuit either way. 

“The constitution says people up to this level of income qualify in Missouri for Medicaid and that’s just what we have to live with,” said Jim Layton who’s worked in the attorney general’s office for more than two decades and handles lawsuits on the constitution.

“The question will be when someone gets online or goes in an office on July 1 and says, ‘I wasn’t eligible on June 30 but today I’m eligible.”

The Senate joined the House this week in voting to not fund Medicaid expansion, which was estimated to cost $1.9 billion with less than $130 million coming from the state. Now that lawmakers rejected to fund the voter-approved measure, the decision is in Parson’s hands. 

“His option is really, do we cover them or not cover them on July 1?” Layton said. 

He said if those Missourians that become constitutionally eligible in July aren’t accepted, it will cause lawsuits. 

“It won’t be until July 1 where one of those can go in and try and enroll and be rejected and thus have a basis for a lawsuit because today, they are not eligible,” Layton said. 

The Senate budget committee chairman said Thursday he believes the Senate appropriated enough money for expansion through the end of 2021. 

“We’ve got enough money in there already to get us through most of the year as Medicaid as is,” Hegeman said. “We’ve added a considerable amount of money to the Medicaid budget just to stay up with it without expansion. Hopefully, that will get us all the way to January where we might have to look at a supplemental budget again.”

Layton said the state should be prepared to run out of money in the Medicaid fund because lawmakers didn’t fund it. 

“The time will come when the money runs out and, at that point, hospitals bills and doctors that have been submitted to the Mo HealthNet program will go unpaid,” Layton said. 

And if the money runs out, Layton said some healthcare providers could stop allowing patients with Medicaid. 

“There are doctors who don’t accept Medicaid and that may be tougher if there are some questions if they are going to be paid during this fiscal year,” Layton said. “It’s certainly possible that at some point the challenge of finding a hospital or a doctor to accept Medicaid could increase.”

He said the state could also face a lawsuit if the governor decides to expand Medicaid. 

“There could be someone who wants to say that this expansion that is changing the level of income at which you qualify isn’t really there because the constitutional amendment was invalid,” Layton said. 

He questions if the amendment is even valid since the ballot question did not include a funding mechanism. 

“It would be a taxpayer suit. That is someone saying my taxes are being used to fund something that is illegal,” Layton said. 

Federally, Layton said the state runs out of money and is not reimbursing health care professionals and hospitals, Missouri could be under a violation of the plan agreement with the federal government. 

That means whatever decision Parson chooses, there’s probably a lawsuit waiting. 

“In a sense, what he is deciding is which sides brings the lawsuit,” Layton said. “Almost certain there is a lawsuit, maybe certainly a lawsuit and if they do allow it, then I think there’s a good chance there is still a lawsuit, but from the other side.”

Parson tweeted Thursday evening that he’s waiting to make a decision on expansion once lawmakers finalize the budget.

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