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The latest news from every corner of the state, including policy emerging from Missouri's capitol.

Missouri legislature passes tax that funds roughly one-third of Medicaid program

Members of the Missouri House of Representatives mingle on Wednesday, Jan. 4, 2023, before the start of the legislative session at the Missouri State Capitol in Jefferson City.
Brian Munoz
St. Louis Public Radio
Members of the Missouri House of Representatives mingle on Wednesday, Jan. 4, 2023, before the start of the legislative session at the Missouri State Capitol in Jefferson City.

The Missouri legislature has passed a tax on health care providers that funds roughly a third of the state’s Medicaid program.

The House voted 136-16 Wednesday to pass the Federal Reimbursement Allowance. The only votes against it were cast by Republicans.

The bill now goes to Gov. Mike Parson.

“This has become an integral part of our state's budget, primarily funding a large piece of our Medicaid program,” House Budget Chairman Cody Smith, R-Carthage, said.

The allowance is a tax on health care providers like hospitals, ambulance districts and nursing homes. That tax is reimbursed by the federal government on a greater scale.

Sen. Lincoln Hough, R-Springfield, said the tax draws about a 3-to-1 return from the federal government.

Overall, the tax generates over $4 billion for Missouri’s Medicaid program. It was set to expire at the end of September. The new bill would reauthorize the tax through September 2029.

In explaining why he was voting against the bill, Rep. Tony Lovasco, R-O’Fallon, said he wished the state was less reliant on the federal government.

“We cannot continue the path of just looking to the federal government to pay our bills and write us checks every time we need to get something done, because the reality is they don't have the money,” Lovasco said.

The passage of the allowance has been rocky the last two times it has been up for renewal. Lawmakers had to go to a special session in 2021 when the tax was last up for reauthorization.

The consternation over the FRA then stemmed from some Republican lawmakers wanting it to contain anti-abortion language. The tax passed without that language.

This year the issue resurfaced, with some Republican lawmakers insisting that the legislature first pass a separate bill that bars state funding from going to abortion providers or their affiliates. Parson signed that bill into law last week.

The advancement of the FRA was stalled in the Senate for more than 40 hours in early May. A faction of Senate Republicans held up the measure, insisting the Senate first pass a resolution that, if approved by voters, would make it harder to amend the constitution.

Ultimately the Senate was able to pass the allowance out of the chamber and to the House without that demand being met.

House Minority Leader Crystal Quade, D-Springfield, said that in the past few years, the FRA has become a political football.

“I hope and ask those of you who remain that you look at this for exactly what it is: something that is essential to our state's budget to be able to function as a government, provide the most basic services that we're supposed to and that this shouldn't be used as a hostage in a terrorist negotiation,” Quade said.

Copyright 2024 St. Louis Public Radio

Sarah Kellogg is a first year graduate student at the University of Missouri studying public affairs reporting. She spent her undergraduate days as a radio/television major and reported for KBIA. In addition to reporting shifts, Sarah also hosted KBIA’s weekly education show Exam, was an afternoon newscaster and worked on the True/False podcast. Growing up, Sarah listened to episodes of Wait Wait...Don’t Tell Me! with her parents during long car rides. It’s safe to say she was destined to end up in public radio.