Ready or not, big changes are coming to Missouri’s Medicaid program. Earlier this month, President Trump signed the “One Big Beautiful Bill” (OBBB) into law, and it includes some of the most significant changes to the Medicaid program in decades.
Back in May, when the concepts for the bill were still being discussed, I wrote about several of the proposals that I thought might be included. As a jumping-off point for a more in-depth discussion of the many reforms included in the OBBB, I thought it would be helpful to first compare what made it across the finish line to the ideas I discussed in my earlier post.
- Rein in financing gimmicks: As I’ve discussed at length, states have recently been drastically increasing their reliance on Medicaid provider taxes in response to rising healthcare costs. The OBBB freezes state provider tax rates where they are today, prohibits states from adopting new ones, and begins lowering the maximum allowable rate from 6% to 3.5% over a period of years (excluding those for nursing homes and intermediate care facilities). Missouri’s current rate for its hospital provider tax is 4.2%, so this change could have an effect on the state’s budget in several years once the OBBB is fully implemented.
- Work requirements: Instead of offering states the opportunity to try work requirements for their respective Medicaid programs, as has been proposed in the past, the OBBB goes one step further by requiring states that have adopted expansion to establish “community engagement requirements” for their able-bodied enrollees. These requirements largely exempt populations that aren’t considered working-age able-bodied adults, such as pregnant women and parents with dependents under the age of 14.
- Reduce “enhanced” federal match: Decreasing the federal government’s skewed payment structure for the Medicaid expansion population was one of my only expected reforms that didn’t make it across the finish line. While this change was excluded, the OBBB does eliminate the temporary increase in federal payment share that has existed for several years, which was an effort to entice states to adopt expansion. It also reduces the federal payment rate for states that cover illegal immigrants under their Medicaid programs.
All told, the OBBB includes at least a dozen additional healthcare changes that will impact Missouri in one way or another that I haven’t mentioned above. It’s also important to keep in mind that much of the OBBB will not go into effect immediately and will be implemented in phases over the next decade. For many of the changes included in the bill, it’s far too early to confidently predict the effect they may have on Missourians or the state’s budget.
Over the coming weeks and months, I’ll dive deeper into some of these provisions as more information related to Missouri comes to light. Time will tell whether Missouri’s government is ready or capable of successfully implementing the reforms on the horizon.
