Senate leaders have agreed to expand Medicaid coverage to people earning up to 138% of the federal poverty level or about $20,000 annually as is allowed under federal law.

The movement by Senate leaders to cover those earning up to 138% of the federal poverty level is a major step in finally reaching agreement to adopt a Medicaid expansion program as 40 other states have done to cover primarily the working poor.

The House passed a bill earlier this session to cover those earning up to 138% of the federal poverty level. It is estimated the House bill would cover at least 200,000 Mississippians. The Senate, on the other hand, passed legislation to cover those earning less than 100% of the federal poverty level or about $15,000 per year. Senate leaders estimated their plan would have covered about 40,000 people.

During open negotiations earlier this week, House Medicaid Chair Missy McGee, R-Hattiesburg, urged her Senate colleagues to agree to expand Medicaid coverage that would result in drawing down maximum federal funds.

On Friday, Lt. Gov. Delbert Hosemann, who presides over the Senate, announced his leadership team was agreeing to cover those earning up to 138% of the federal poverty level.

Earlier this week, McGee offered a compromise where those earning less than 100% of the federal poverty level would be covered through traditional Medicaid. But those earning between 100% and 138% would be covered through private insurance policies through the federal marketplace exchange.

But the cost of those policies would be paid through state funds and federal Medicaid funds. The federal government pays 90% of the cost for those covered through Medicaid expansion, estimated to be about $1 billion a year for Mississippi. In addition, the federal government is providing incentives to expand Medicaid for the 10 states that have not. Those incentives would provide about $700 million additional funds to Mississippi over a two year period.

The original Senate plan would not have been considered ACA Medicaid expansion and would not have qualified for the increased federal funding.

In a news release, the Senate leaders said they would be willing to cover people earning up to 138% of the federal poverty level using the private insurance policies to cover those earning between 100% and 138%.

While the Senate's willingness to provide Medicaid coverage to those up to 138% of the federal poverty level is a major step, there are still issues to be resolved as the session nears an end before Medicaid expansion is a reality in Mississippi.

Senate officials said they are still insistent that the expansion plan include a stringent work requirement and monitoring system for those covered through expansion. The Senate proposal would instruct the state Attorney General to file a lawsuit to try to overturn the federal government's expected denial of the work requirement.

A news release from Hosemann's office said a work requirement is “a non-negotiable element.” Under the Senate offer, Medicaid would not be expanded until the work requirement is approved either through the federal Medicaid officials or through the federal courts.

House leaders said they also want a work requirement, and included one in the original House proposal. However, should the federal government deny it — as expected — the program would still go into effect — a pragmatic move, House leaders said.

In the news release, Hosemann added, “We are hopeful a compromise is on the horizon. When people are healthy, they are working, raising their families, and contributing to their communities. Access to healthcare is a critical component of economic and workforce development efforts in Mississippi—and reforming healthcare is the right thing to do.”

The work requirement is one obstacle that must be resolved. In addition, Gov. Tate Reeves has said he would veto any bill expanding Medicaid. It would take a two-thirds vote by both chambers to override a veto. The House is expected to easily muster more than a two-thirds vote. But Reeves has been lobbying Senators hard against expansion, and the vote there is less assured.

Under current law, Medicaid in Mississippi covers the disabled, poor children and poor pregnant women, certain primarily caregivers living in extreme poverty and certain segments of the elderly population.

The Senate, when it delivered its compromise offer, also called for the House to reconsider its initial plan, which had passed the Senate by a two-thirds margin.

Senate leaders also called for the House to consider changes to the state's original Medicaid program that the Senate had proposed earlier in the session. These changes include making it easier for severely disabled children to receive Medicaid coverage and preserving changes made last year to the hospital tax which provides additional federal money for hospitals.

Mississippi Today reporter Taylor Vance contributed to this story.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.