How New Federal Medicaid Rules Impact MO HealthNet and KanCare

Overview of the Budget Legislation

The recent budget legislation introduced by President Donald Trump has sparked significant debate due to its impact on social services and programs across the United States. This comprehensive package includes a wide range of changes, some of which are aimed at funding priorities such as tax cuts and increased border security. The bill is expected to have far-reaching effects on various programs that many Americans rely on for essential support.

Key Components of the Bill

One of the primary focuses of the legislation is extending the 2017 tax cuts, which predominantly benefit the wealthiest individuals in the country. Additionally, the bill aims to eliminate taxes on tips and overtime for a limited period. It also seeks to reduce federal taxes for certain Social Security beneficiaries. These measures are intended to stimulate economic growth, but they come at a cost.

To fund these initiatives, the bill includes substantial cuts to safety-net programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP). According to an analysis by the Congressional Budget Office (CBO), approximately 16 million Americans could lose coverage under Medicaid over the next decade due to changes in the Affordable Care Act marketplace and the implementation of work requirements.

Impact on Medicaid and SNAP

The legislation mandates that individuals aged 19 to 64 enrolled in Medicaid, known as MO HealthNet in Missouri and KanCare in Kansas, must perform at least 80 hours of work, school, or caregiving per month. This requirement will also apply to SNAP recipients. Parents with children aged 14 or older will be required to work to receive Medicaid benefits, while others may be exempt if they have children under 14 or specific medical conditions.

Experts estimate that around 130,000 people in Missouri, or about 10.5% of those enrolled in the program, could lose coverage over the next decade. Nationally, the figure is projected to reach 8.6 million. The CBO's analysis indicates that the new law would reduce federal Medicaid spending by $1 trillion.

In Missouri, the state is expected to lose about $17 billion in federal funding for Medicaid over the next decade, according to KFF estimates. In Kansas, the law could affect KanCare coverage for 13,000 people and result in a loss of about $4 billion in federal funding.

Changes to SNAP

The legislation also repeals certain rules from President Joe Biden's administration regarding enrollment in the Affordable Care Act marketplace, including special enrollment periods and extended open enrollment periods. Furthermore, the federal government will no longer cover the entire cost of SNAP starting in 2028 if states meet a certain payment error rate.

Over the next ten years, federal spending on SNAP programs is expected to decrease by $287 billion. An Urban Institute analysis suggests that about 22.3 million families in the U.S. could lose all or some of their benefits, including approximately 318,000 families in Missouri and 92,000 in Kansas.

Political Support and Opposition

All of the Missouri and Kansas Republican congressional delegations supported the legislation, while Democrats opposed it. In Missouri, Democratic Reps. Wesley Bell and Emanuel Cleaver voted against the bill, while several Republican representatives, including Ann Wagner, Bob Onder, and Mark Alford, voted in favor. In the Senate, Republican Sens. Josh Hawley and Eric Schmitt supported the legislation.

In Kansas, Democratic Rep. Sharice Davids opposed the bill, while Republican Reps. Tracey Mann, Derek Schmidt, and Ron Estes supported it. Senators Jerry Moran and Roger Marshall also backed the legislation.

Work Requirements and Implementation

Only Georgia and Arkansas have attempted work requirements for Medicaid, but both states faced challenges. Georgia is scaling back parts of its program, while Arkansas is working to revive its program after a legal challenge. KFF analysis found that over 90% of U.S. adults eligible for Medicaid through the ACA expansion are already working or exempt from work requirements.

Work requirements for Medicaid are set to take effect in December 2026, following the upcoming midterm elections. Other funding changes will not take effect until 2028. The legislation does not specify when changes for SNAP will begin.

Effects on Healthcare Services

The legislation limits how states can funnel money into their Medicaid programs by capping provider taxes, which are fees collected from healthcare providers to support Medicaid. Starting in 2028, the cap on these taxes will be lowered from 6% to 3.5% by 2032.

In response to concerns about rural hospitals, lawmakers allocated $50 billion to stabilize their finances. However, experts estimate that this amount will cover less than half of the losses these hospitals will face from the Medicaid changes. States may need to find other ways to cut costs, potentially affecting dental or mental health services or reducing coverage for postpartum care.

Meg Cunningham, a reporter for The Beacon, has extensive experience covering politics and policy, particularly in Missouri. She has developed expertise in state policy, democracy, and health outcomes, contributing valuable insights into the implications of the new legislation.