Missouri lawmakers approve key taxes for Medicaid after battle with hard-right senators

Missouri lawmakers on Wednesday passed a bill to renew a series of key taxes that fund the state’s Medicaid program, ending a months-long dispute with a group of hard-right lawmakers who sought to block the renewal.

The legislation, called the Federal Reimbursement Allowance or FRA, would keep the state’s Medicaid program running to provide health coverage to roughly 1 million residents. Failure to renew the taxes would have resulted in a loss of billions in state and federal Medicaid funds.

The House voted 136-16 to approve the taxes, sending it to Republican Gov. Mike Parson’s desk.

“This has become an integral part of our state’s budget, primarily funding a large piece of our Medicaid program,” said Rep. Cody Smith, a Carthage Republican who chairs the House budget-writing committee.

The bill’s passage comes after the Senate’s hard-right Missouri Freedom Caucus spent 41 hours blocking the renewal until a laundry list of their demands were met, including Parson’s signature on a bill barring Medicaid funds from going to Planned Parenthood.

The Freedom Caucus ended their filibuster before Parson signed the legislation. However, Parson ultimately signed the bill that bans funding to Planned Parenthood.

The FRA also includes an expiration date of 2029, which the hard-right group had sought.

House Minority Leader Crystal Quade, a Springfield Democrat, slammed members of the Freedom Caucus for using the bill as a “hostage in a terrorist negotiation.”

“I hope and ask those of you who remain that you look at this as exactly what it is, something that is essential to our state’s budget to be able to function as a government,” said Quade, who is running for governor.

The FRA is levied on hospitals, ambulance companies, and pharmacies, which have voluntarily contributed to the system since 1992. The taxes are a critical funding source for the entire state budget.

While the filibuster was underway in the Senate earlier this month, a chorus of Missouri health care groups and the Missouri Chamber of Commerce and Industry excoriated the Freedom Caucus for blocking the measure.

Failure to renew the taxes would have hurt children with chronic illnesses, force nursing homes to close, shut down rural hospitals, collapse mental health care services, and jeopardize pharmacy and emergency services, the groups said.

Not renewing the taxes would have led to an estimated loss of $4.3 billion in state and federal Medicaid funds in fiscal year 2026, according to an analysis by the Missouri Budget Project, a nonprofit that analyzes fiscal policy.

The filibuster, which took up nearly a full week, also had a lasting impact on the state budget. The budget chairs from the House and Senate had to negotiate the spending plan behind closed doors, preventing more formal debates on the floors of each chamber in order to meet the constitutional deadline.

“The process was complicated and different, fairly unprecedented,” Senate President Pro Tem Caleb Rowden, a Columbia Republican, told reporters immediately after the budget passed in the Senate last week. “I hope that doesn’t become the new norm.”

This session marked the second time in recent years that renewing the taxes sparked controversy.

In 2021, lawmakers were forced into a special session after a group of hard-right senators similarly demanded legislation blocking Planned Parenthood from receiving Medicaid payments.

The Star’s Kacen Bayless contributed to this story.