Reeves makes clear that cost is not his reason for opposing Medicaid expansion for working poor

Published 9:32 am Monday, October 2, 2023

The shroud of mystery has been removed on why Gov. Tate Reeves opposes expanding Medicaid.

It is not a matter of cost. The governor simply does not support expanding Medicaid to provide health care coverage for Mississippi’s working poor.

Reeves’ recent announcement of his plan to provide additional federal funds for struggling hospitals makes clear that the cost to the state is not the reason he opposes expanding Medicaid.

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Reeves often has said he opposed Medicaid expansion because the state could not afford to put up 10% of the matching funds to draw down the federal fund. Under expansion, the feds would pay 90% of the health care costs for an estimated 300,000 Mississippians — mostly the working poor who would qualify.

Health care experts question whether Reeves’ recently announced complex plan to draw down additional federal Medicaid funds for hospitals would even work. But under his plan, the hospitals would pay an additional assessment or tax of $178 million per year as the state match to draw down the funds. If it works, the hospitals paying the assessment/tax would garner an estimated $680 million annually in federal Medicaid funds.

But there’s another option at the governor’s disposal. He could take a portion of that increased hospital assessment/tax (about $100 million) and draw down more than $1 billion annually in Medicaid expansion funds as 40 other states have done. Those funds would be used to provide health insurance to tens of thousands of the working poor. Medicaid expansion would allow hospitals to receive payments when they provide services to the working poor and would allow the working poor to access other medical services, such as primary care physicians, who might be able to prevent them from needing more expensive hospital care down the road.

It is important to remember that back in 2019, the Mississippi Hospital Association proposed paying an assessment/tax to provide the state match for Medicaid expansion. Reeves rejected that proposal then.

At last week’s announcement, Reeves reiterated that he has no interest in expanding Medicaid to provide health insurance for the poor.

“The question is … what is the difference in changing the payment methodology and adding approximately 300,000 Mississippians to the welfare rolls?” the governor said. “Mississippi has the lowest unemployment rate in our state’s history. We need more people in the work force … So, adding 300,000 able-bodied Mississippians to the welfare rolls I would argue is a bad idea.”

A study by the Kaiser Family Foundation found that 61% of Medicaid recipients work and another 30% of recipients are students, disabled or caregivers. Medicaid expansion is designed, in part, to provide health insurance for people who work in jobs where their employers do not provide health insurance and they do not earn enough to afford private insurance.

Mississippi’s current Medicaid program provides health insurance coverage for the disabled, poor pregnant women and children, a certain group of caregivers living in extreme poverty and a certain group of the elderly, but not the working poor.

A study by the Mississippi University Research Center found that Medicaid expansion would generate much more in federal funds — at a lower cost to the state — than the governor’s recently announced plan would.

Mississippi would receive $1.61 billion in federal funds for the first year of Medicaid expansion and $1.64 billion in the second year, according to a study authored by the state economist’s office. The office forecasted that Mississippi would collect $1.36 billion in year three, $1.38 billion in year four, and increasing by smaller percentages going forward.

That money could be used not only to help hospitals, but to provide access to health care for working poor Mississippians.

This analysis was produced by Mississippi Today, a nonprofit news organization that covers state government, public policy, politics and culture. Bobby Harrison is Mississippi Today’s senior Capitol reporter.