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Insurance chief says he supports Medicaid expansion — but only for the poorest Mississippians

State Insurance Commissioner Mike Chaney said he supports expanding Medicaid to provide health care coverage — but only for Mississippians earning less than 100% of the federal poverty level, or those earning up to $15,000 annually.

Federal law allows states to provide Medicaid coverage to those earning up to 138% of the federal poverty level, or those who make about $20,800 annually. Chaney does not want to provide coverage for those people earning between 100% and 138% of the federal poverty level.

FAQWhat is Medicaid expansion, really?

Those low-income people, the commissioner said, can currently receive private health care coverage for $20 a month or less through the health insurance exchange, and he does not want them to leave the private market and sign up for a government-run Medicaid program. The insurance policies on the exchange, while relatively inexpensive as Chaney said, include high deductibles and often include out-of-pocket costs of as much as $5,000 that the policyholders might have to pay to cover their health care costs. The polices, though, do include low copays to see physicians and require certain preventive care to be performed at no costs.

Morgan Henderson, principal data scientist at the non-partisan Hilltop Institute at the University of Maryland Baltimore County, said the high deductibles and high out-of-pocket costs make the policies cost prohibitive for many low-income people despite the low monthly premiums.

“While it’s true that exchange plans premiums are still very low for individuals from 100% to 138%, these individuals can still face cost sharing (that is, copays, coinsurance, and deductibles),” Henderson said. “From what we’re seeing, these individuals could face high out-of-pocket spending.”

Still, Chaney believes keeping the people between 100% and 138% of the federal poverty level on the private insurance exchanges instead of Medicaid is a top priority.

“If Medicaid is not expanded correctly, I will encourage the governor to veto any bill,” Chaney told Mississippi Today last week.

Gov. Tate Reeves repeatedly has expressed his opposition to expanding Medicaid. Despite Reeves’ stated opposition, the House has already passed Medicaid expansion legislation by significantly more than the two-thirds majority needed to override a governor’s veto. The House bill is pending in the Senate.

Chaney confirmed that he has met with legislators to provide input.

But he stressed that he would not support any legislation that allows the about 145,000 people between 100% and 138% of the federal poverty level who have insurance through the exchange to instead sign up for Medicaid expansion. He said there are another about 125,000 Mississippians on the exchange who make more than the 138% of the federal poverty level — too much to qualify for Medicaid expansion under the current House proposal.

Henderson questions whether the number of people in the 100% to 138% category on the exchange in Mississippi is that high.

Both the health insurance exchange and Medicaid expansion are separate components of the federal Patient Protection and Affordable Care Act. States, based on a ruling from the U.S. Supreme Court, have the option of whether to participate in Medicaid expansion. Forty states have opted into Medicaid expansion, where the federal government will pay 90% of the costs to cover primarily the working poor.

But if the Legislature adopted Chaney’s plan where only those earning up to 100% of the federal poverty level are covered through Medicaid, the federal government would pay only its normal matching rate — lower than the 90% match — that is paid for the traditional Medicaid program. Plus, the state would not receive the more than $600 million offered over two years by the federal government as an incentive to expand Medicaid.

The federal government currently pays about 77% of the cost for Mississippi to cover those on the traditional Medicaid program. In Mississippi currently, only the disabled, poor women during their pregnancy and for 12 months after giving birth, poor children, a segment of the low-income aged population and a small group of extremely poor caregivers are covered by Medicaid.

Chaney said that there are about 80,000 Mississippians earning less than 100% of the federal poverty level. He said it is estimated that about 35,000 of those people would sign up for Medicaid if given the opportunity. Various economic analyses place the signup rate much higher. If Chaney’s numbers are correct, it would cost the state about $60 million a year to provide Medicaid coverage for those earning less than 100% of the federal poverty level. If all 80,000 sign up, the cost to the state would be more than $97 million. And if the number of people earning less than 100% is higher than the 80,000 projected by Chaney, the cost to the state would be even greater.

Studies, including one conducted by the University Research Center led by state Economist Corey Miller, estimate that the state would generate revenue by expanding Medicaid to cover those earning less than 138% of the federal poverty level. Miller’s study concluded there would be no costs to the state until 2032.

But the study added, “This estimate does not reflect the economic impact of Medicaid expansion in Mississippi … which we expect will result in additional revenues to the state.” Various studies, including by the state’s University Research Center, have found that Medicaid expansion would be an economic boon to the state, generating jobs, state revenue growth, and even population growth.

READ MOREMississippi leaving more than $1 billion per year on table by rejecting Medicaid expansion

Roy Mitchell, executive director of the Mississippi Health Advocacy Program, said people moving from the exchange to Medicaid have occurred in the 40 states that have expanded Medicaid without any negative impact.

“Mississippians with annual family incomes at 100-138% of federal poverty level who are in the marketplace (or exchange) will move into Medicaid,” Mitchell said. “This dynamic is not new. It has occurred in every single state that has expanded Medicaid after 2014.”

The House bill has a provision saying people who drop coverage from a private health insurance program cannot sign up for Medicaid for one year. The House bill also has a work requirement. But if the federal government rejects the work requirement or the provision designed to keep people on private insurance, the Medicaid expansion program still would go into effect.

Chaney said “politically” he does not believe the Senate can pass Medicaid expansion and override a governor’s veto. In addition, both Lt. Gov. Delbert Hosemann, who presides over the Senate, and Senate Medicaid Chair Kevin Blackwell have said they will not support Medicaid expansion without a work requirement.

Chaney said based on his conversations with federal officials, he does not believe they would approve a work requirement — something health policy experts also have been telling lawmakers.

Senate leaders, according to several sources, have also considered a plan where people earning less than 100% of the federal poverty level would be on Medicaid and people between 100% and 138% of the federal poverty level would garner insurance through the exchange that would be paid for via Medicaid funds.

Henderson said such a program could work, but added that the cost to the state could be more to pay for those on private insurance than just enacting traditional Medicaid. But he added, “All in all, this could provide a similar or marginally more positive experience to beneficiaries in the 100% to 138% range than a traditional expansion.”

READ MORE: Senate Republicans should know: This is literally life-or-death.

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