June 23, 2020
Dear Faculty, Staff, Fellows, Residents and Students,
Last week we sent you a message about responding to white supremacy and racial bias on our campus. We now want to talk about the profoundly important role all of us can play in beginning to address these issues in the broader community and effecting specific public policy changes that will help the most vulnerable among us. It happens that we are less than two months away from a decisive vote that could have just such an impact here in St. Louis and across the state. Governor Mike Parson has assigned the Medicaid expansion vote to the August 4th primary, meaning we will all have the opportunity very soon to vote on whether Missouri takes the next steps in expanding access to healthcare, a policy change that will also return federal tax dollars back to our state. This initiative will appear on the ballot as Amendment 2.
We believe strongly in this campaign because of its potential to expand access to healthcare for Missouri residents who desperately need it. Right now, it’s incredibly hard to qualify for Medicaid in our state, even if you live in poverty. In Missouri, if you earn more than $3,600 dollars a year (or $300 per month), you cannot receive Medicaid unless you are pregnant; even those who are pregnant lose their Medicaid coverage shortly after giving birth. In other words, adults with incomes below 138% of the poverty line still do not regularly qualify for Medicaid. Additionally, in order to qualify for subsidies to purchase insurance on the exchanges, your income must be greater than 100% of the federal poverty line, or $21,000 for a family of three. This creates a coverage gap, with 85% of the more than half a million uninsured adults ages 18 to 64 working in jobs that do not offer health insurance while also remaining ineligible for Medicaid or federal subsidies to purchase private insurance. Those Missourians are doing everything we ask of them and are still unable to gain access to health care. This is a perfect example of the kind of systemic inequity that works against those who are trying to improve their lives.
Medicaid expansion would make it easier for those individuals to gain coverage, helping them to stay healthy as they work to support themselves and their families. A comprehensive review of the literature by the Kaiser Family Foundation found that states enacting Medicaid expansion have seen “improved access to care, utilization of services, affordability of care, and financial security among the low-income population.” Specifically, it led to earlier identification and treatment of cardiovascular risk factors like diabetes and hypertension, lower mortality among individuals with cardiovascular disease and end-stage renal disease among patients on dialysis, improvements in cancer diagnosis and treatment, improved access to behavioral health services and addiction treatment, and even declines in the length of stay of hospitalized patients. Research has also demonstrated that Medicaid expansion has an impact on individuals beyond health access and outcomes, such as improved financial security. Of course, it makes all the sense in the world that when you have greater access to health care, you will also have better health outcomes and less financial strain.
Medicaid expansion would also have a systemic impact on our health care system, particularly in the rural areas of our state. Over the last several years, Missouri has seen 10 rural hospitals close their doors. More than 40% of those that are left are vulnerable to closure, with over half of that number counted among the most vulnerable rural hospitals around the country. Hospital operating margins in states with Medicaid expansion were significantly improved over those in states that failed to expand Medicaid coverage. Our rural hospitals, so vital to so many Missourians, desperately need the funding Medicaid expansion would provide.
In addition to improved health and access to care, Medicaid expansion has the potential to be a game changer for our state economy. Last week we had an enlightening conversation with Dr. Karen Joynt Maddox, Dr. Tim McBride, and Dr. Abigail Barker from our Center for Health Economics and Policy in the Institute for Public Health, which brings together faculty from the Brown School and the medical school. These experts have done the work of crunching the numbers and assessing the impact on the state budget. They looked at the experience of other states that expanded Medicaid and they built a fiscal model to estimate the impact of expansion on the Missouri Medicaid budget. In their most likely, middle-of-the-road scenario, they estimate that the policy would result in $38.9 million in savings in the first year, even after the state allocates its obligations for 10% of the expanded services. They also predict that the savings to the state after five years would be over $1 billion dollars per year.
Part of those savings will come from how Medicaid expansion is funded. In our time together, Dr. McBride, Dr. Barker, and Dr. Joynt Maddox explained that the state gets a roughly 65% match from the government for its spending on most of the 900,000 Medicaid-eligible Missouri residents. Medicaid expansion would provide access to health care for an additional 230,000 people, with the government matching that spending by the higher proportion of 90%. Because some existing costs would now be eligible for a 90% match instead of the current, much lower match, Medicaid expansion would actually result in an influx of money rather than a loss. Our WashU experts think that additional savings may come from unexpected places. States that have expanded Medicaid have also seen savings in their mental health and correctional budgets, both of which cover health care services with general revenues that now would be eligible for federal Medicaid expansion funds.
Medicaid expansion also has the potential to increase state revenue outside of health care. A recent report conducted by Regional Economic Models, Inc. (REMI), commissioned by the Missouri Foundation for Health, estimated that expansion would result in a $2.5 billion increase in economic output in Missouri. The REMI study also concluded that expansion would result in 16,330 new jobs in Missouri, with 79% of those jobs outside the healthcare industry such as retail and construction. Even better, nine out of ten of those jobs would pay $15 or more per hour. Wouldn’t more jobs and more tax revenue make it possible for the state to increase its investment in education, infrastructure and innovation?
This is the right move for our economy, especially at a time when even more people will be out of work and needing assistance. But it is also a critical step in our too-long journey toward a more just society. Our focus right now is on police violence and racial inequality. We must think about a reality in which Black residents make up 12% of our state’s population but have so far accounted for more than one-third of its coronavirus deaths. In St. Louis and St. Louis County, Black people are dying of the virus at nearly double the rate of white people. The past three months have shown in stark terms the consequences when members of our community have unequal access to healthcare but we must also continue to grapple with a reality in which, even before this virus arrived, residents of St. Louis ZIP codes separated by only few miles had up to an 18-year difference in life expectancy. Racism is, to be sure, a public health problem and Medicaid expansion is an important first step in righting the unconscionable disparities that disproportionately harm communities of color.
There is a reason that the Forward Through Ferguson report, released in October 2015, included Medicaid expansion as one of its Signature Calls to Action to address the racial and social justice inequities that continue to affect our region. Recent data from the Survey of Income and Program Participation (2014) shows that Black households hold less than seven cents on the dollar compared with white households. The racial wealth gap is staggering and, a recent study shows, impossible to close without bold national policies that aim to build Black American wealth. Systemic reform and lasting change will require far bolder action, of course, but we think that history will show that Medicaid expansion is our country’s first real attempt at wealth redistribution since the 1960s. And, to our minds at least, it is also the obvious first step toward repairing the effects of hundreds of years of racism in this country. This, too, is a way toward equity and justice.
So, what can you do? We urge all of you to read up on the extensive research conducted by experts here at WashU and elsewhere and, at a minimum, make sure you are registered to vote before the July 8 deadline to participate in the August 4 primary. The Gephardt Institute’s WashU Votes initiative has more information about voter registration. Talk to your own families and communities about this important vote.
Just imagine what could happen if the state were to use its additional resources to improve early education, which we know will be a critical determinant of improving the chances of Black and poor families to participate in the American dream. And the way our systems work, breaking the cycle of poverty is also likely to further improve the economy of the state. Education and health, health and education, are inextricable, and we owe all children the best version of both that we can possibly muster.
David H. Perlmutter, MD
Executive Vice Chancellor for Medical Affairs and Dean
Andrew D. Martin, PhD