Nixon Proposes MO Health Works To Reduce Small Businesses Health Costs

Plan will help small businesses provide health insurance for their employees, avoid penalties under the ACA.

CAPE GIRARDEAU, Mo. – Gov. Jay Nixon today visited the Cape Girardeau Chamber of Commerce to announce his Missouri Health Works plan to help small businesses provide health insurance for their employees and ease burdens under the Affordable Care Act (ACA).

“Small businesses in Missouri are getting squeezed between sky-high health insurance costs and new requirements under the ACA,” Gov. Nixon said. “Unfortunately, the Missouri legislature’s inaction on Medicaid has taken this serious problem and made it worse by sending Missourians’ tax dollars to other states. There is no reason why small businesses should have to continue to bear all the burdens of the ACA and get none of the benefits. Missouri Health Works is an example of the kind of smart, business-friendly reform that is possible if we move forward and bring Missourians’ tax dollars home.”

For small employers with fewer than 150 employees, Missouri Health Works would pay a portion of employers’ health insurance costs for their employees making below 138 percent of the poverty level, or $27,310 annually for a family of three.

Under the Affordable Care Act, employees with more than 50 employees must provide affordable health insurance coverage to their employees or pay a penalty. Missouri Health Works will lessen this burden by using the dollars available through Medicaid expansion to pay for an estimated 60 percent of the cost of the health premium for eligible employees.

Missouri Health Works will also require employees to take personal responsibility by paying for a share of their health insurance costs. Eligible workers will be required to take advantage of this more cost-effective option rather than enrolling in traditional Medicaid.

Because federal funds will cover 100 percent of the costs for calendar years 2015 and 2016, funding for Missouri Health Works would involve no state tax dollars for those years. Beginning in 2017, the state share would gradually increase to no more than 10 percent of the cost in 2020.

A number of states have programs similar to Missouri Health Works in place including: Arkansas, Iowa, Kentucky, Maryland, Minnesota, Nevada, New Mexico, Oklahoma and Oregon.

Medicaid expansion and reform would bring the federal dollars that Missourians send to Washington – $2 billion a year – back to the state to provide health care coverage to 300,000 working Missourians. As a result of the legislature’s failure to act, those dollars – $5.47 million a day – are now being spent in other states. A majority of states, including Missouri’s neighboring states of Arkansas, Kentucky, Illinois and Iowa, are moving forward with plans to expand and reform Medicaid.

According to an analysis by the Missouri Economic Research and Information Center (MERIC), expanding and reforming Medicaid would result in the creation of 23,868 jobs, $9.9 billion in new wages, and $14.6 billion in new Gross State Product (GSP) from 2015 to 2022. According to the report, Medicaid expansion would also generate $402 million in new state general revenue from 2015 to 2022, including $53 million in new general revenue in 2015 alone.

In recognition of the economic benefits of this policy, 75 chambers of commerce and business groups across the state, including the Cape Girardeau Chamber of Commerce, have endorsed Medicaid expansion and reform.