September 15, 2020
Bob Buckley, partner at White, Graham, Buckley & Carr, is a regular columnist for The Examiner of East Jackson County. In his latest column, Buckley discusses the successful August ballot measure in Missouri, which now allows the state to expand Medicaid coverage. One of the options for funding the expansion may end up as another ballot measure – raising the cigarette taxes in Missouri.
The article, Missouri Can Step Up to Make Things Better, was published in the September 11 edition of The Examiner. An excerpt from the article is below.
Now that Missouri has joined 39 other states in expanding Medicaid coverage, we will hear grumbling from legislators about how they are going to pay for it. Fifty-three percent of Missourians said that they want to expand Medicaid.
The Missouri Republican Party, including the governor, opposed the ballot measure, and some think the governor put it on the August ballot thinking a lower turnout would make it more difficult to pass. Missouri joins six other Republican-led states in supporting expansion of Medicaid, the lifeline of health care for many Missourians.
One of the arguments made in favor of expansion was to spend tax dollars here rather than shipping them to the other states. Because 90% of the cost of the expansion is paid by the federal government, we have been helping to fund expansion in the other 37 states with our tax dollars. Only 65% comes from the federal government on the current program. Thus, Missouri will get its fair share of federal dollars to help provide health care to all Missourians.
The ballot proposition did not do well in rural areas, which was somewhat surprising since at least 12 rural hospitals were in danger of closing if the measure did not pass. Health care providers in Missouri strongly advocated for expansion of Medicaid, which should tell us how important the expansion is to them.
The proposition that was passed in August was for an amendment to the Missouri Constitution and in particular Section 36(c) of Article IV. The amendment expands eligibility to adults 19 and older and less than 65 years of age whose income is 133% of the federal poverty level. The amendment prohibits any further restrictions on the expanded population who qualify for coverage. It also requires Missouri to use the maximum amount of federal money available under the Affordable Care Act.
The Missouri legislature is concerned about how the cost of Medicaid will affect the state budget, even though the state obligation will decrease from 35% to 10% because of the influx of federal dollars.
When legislators convene in January, they do have an option they can pursue and that is to put another measure on the ballot to raise the cigarette taxes in Missouri. It would not only help pay for Medicaid but help fund public education as approximately one-third of current cigarette taxes are designated for the state school moneys fund to be distributed to the various public school districts under the foundation formula.
Missouri has the lowest cigarette tax in the country at 17 cents per pack. Georgia is next at 37 cents, followed by North Carolina, a tobacco state, at 48 cents per pack.
In Missouri the cigarette tax generates approximately $95 million in annual revenue. All adjoining states have much higher taxes. Kansas is $1.29, Illinois is $1.98, Iowa is $1.36, and Arkansas is $1.15. I suspect smokers from those states come to Missouri to buy their product. If Missouri increased the tax to the Kansas level, it would generate over $500 million in revenue; if we raised it to the Illinois level, it would be almost $1 billion in revenue.