Missouri’s Medicaid enrollment numbers are telling a story, but it may not be one that the federal government wants to hear. Late last year, I wrote about a sharp and troubling decline in the number of permanently and totally disabled (PTD) Missourians enrolled in the state’s Medicaid program. Since then, the enrollment numbers have continued their downward trend, and now have fallen by more than 30,000, or 20%, since 2019, which is significantly lower than any point Missouri has seen in the last two decades.
At first glance, some might assume this drop is simply a byproduct of the state’s post-pandemic Medicaid redeterminations. But as I’ve written before, I fear that explanation doesn’t add up. Permanently disabled recipients aren’t people you expect to lose coverage once their eligibility is established, given that they’re unlikely to re-enter the workforce. Instead, the data and a new quote suggest a different story: PTD shifting.
As I’ve explained in more detail here, PTD shifting is the process where individuals who would normally enroll in Medicaid due to their disability instead enroll as a healthy adult in the Medicaid expansion population. Why would they do this? For recipients, it makes sense because gaining access to Medicaid coverage through expansion is a much easier process. They don’t need to prove their disability; they just need to be able to show that their income qualifies. And for the state, it makes even more sense because the federal government pays 90% of the healthcare costs of someone enrolled in Medicaid expansion but only about 65% for disabled individuals.
People with disabilities often have a variety of healthcare needs, which in turn means paying for their coverage is quite expensive. If some of these costs can be shifted to the federal government, it could yield huge savings for the state. The problem, of course, is that this is explicitly not allowed. Federal law requires that individuals enrolling in the Medicaid expansion population be “newly eligible” for services, meaning they couldn’t otherwise qualify for the non-expansion part of the program. While I have no proof this is what Missouri is doing, this is a trap I’ve feared our state could fall into since before we adopted Medicaid expansion.
My concern was reinforced in a recent article quoting Timothy McBride, the former chair of the MO HealthNet Oversight Committee. When talking about Missouri’s changing Medicaid enrollment, he stated:
Essentially, the recipients chose one door or another when choosing to enroll, and it’s a much easier path to sign up for the expansion than sign up through disability, since it can take one year or longer to become qualified for Medicaid as permanently disabled.
If his observation is true, and the federal government finds out that Missouri is effectively off-loading disabled enrollees into the Medicaid expansion population to save state money at the expense of federal taxpayers, the consequences could be severe. We’re talking hundreds of millions, if not billions of dollars, that could need to be repaid to the federal authorities.
Missouri’s lawmakers should take this warning seriously. The drop in PTD enrollment is no longer just an accounting curiosity—it’s a signal that our state may be running afoul of federal law. Ignoring this problem now could lead to both a fiscal and legal crisis later.
