Medicaid Basics: Using the Fundamentals During a Time of Transformation


Last week, the Missouri General Assembly passed the 2020 budget including $34 million to transform and modernize Medicaid (referred to as MO HealthNet in Missouri). MO HealthNet intends to use this funding and the Medicaid program’s flexibility to address spending growth, ensure access to health care services, improve patient experience and health outcomes, modernize the care delivery system, and implement value-based care. Through the transformation project, MO HealthNet will work toward its vision of building, as described by Director Todd Richardson, “a best-in-class system that addresses the needs of Missouri’s most vulnerable population in a way that is financially sustainable.”

As shown in the Foundation’s most recent Medicaid Basics publication, MO HealthNet is a complex system of services, delivery methods, and funding mechanisms. The complexity stems from Medicaid being administered jointly by federal and state governments. This arrangement allows states to tailor their programs to best address the needs of their residents and respond to emerging issues. As such, Missouri has made adjustments over time resulting in a program with many intricacies that spans several state agencies.

MO HealthNet covers one in six Missourians, primarily those who do not have access to employer-sponsored health insurance or are unable to afford private insurance on the individual marketplace. Of the nearly one million enrollees, 64 percent are children. The program also covers older adults, people with disabilities, pregnant women, and parents. MO HealthNet helps these enrollees access essential care such as hospital, outpatient, physician, and lab services.

Like many other states, MO HealthNet also covers services that are not required by the federal government. These include dental care, pharmacy benefits, home and community-based services, and more. If these services were left uncovered, inefficiencies would likely emerge in other areas of the health care system through increased utilization of high-cost emergency and nursing facility services. Additionally, Medicaid plays a vital role in responding to public health crises. A recent example is the opioid epidemic, where Medicaid enrollees generally have better access to treatment than individuals with private health insurance.

Since Medicaid is operated as a federal-state partnership, the federal government pays for 65 percent of all MO HealthNet expenditures. This configuration helps to insulate Missouri from unexpected cost increases. Fluctuations in costs can occur during economic downturns as more people enroll in MO HealthNet, as well as when health care prices increase due to medical or technological advancements. The arrangement enables the program to be a safety net for the state as well as the individuals receiving coverage.

Given the scope of the program, it is perhaps not surprising that MO HealthNet accounts for approximately one-third of Missouri’s operating budget. Despite the sizeable budget, in 2018, just 17 percent of the program was funded by general revenue (primary sources of which are sales and income taxes). The majority of MO HealthNet funding comes from the federal government.

As the state prepares for a Medicaid transformation, Medicaid Basics can be used to understand existing components of the program and identify opportunities within them for improvement. MO HealthNet is focused on working with the “existing population to improve health outcomes and financial stability.” Given these goals and Medicaid’s structure, impactful reforms can adapt the program to evolving economic, social, and industry trends and improve the health and well-being of Missourians as a result.

Medicaid Basics can be found on the Health Policy publications page. Please email or call (314) 345-5500 for printed copies.