Parson calls special session, urges lawmakers to extend Medicaid tax

Gov. Mike Parson called a special legislative session beginning on Wednesday for lawmakers to extend Missouri’s Federal Reimbursement Allowance, or FRA, a tax vital to funding the state’s Medicaid program.

The FRA program taxes health care providers in the state and uses those funds to earn federal matching contributions to Missouri’s Medicaid program. If the FRA is not passed, Missouri would miss out on nearly $1.4 billion in federal funds, according to Parson’s office — $591 million in the 2022 fiscal year, which starts July 1, and $788 million in the 2023 fiscal year.

At a press conference Monday, Parson said a failure to extend the FRA could force cuts to higher education, capital improvement projects, early literacy programs and health care facilities, among other parts of the state budget.

The FRA has passed in every legislative session since 1992, but debate over Medicaid funding for abortion services prevented the passage of the bill in the regular legislative session that ended last month. Without an extension, the tax is set to expire on Sept. 30.

“It is unacceptable to jeopardize critical investments in priorities like education, workforce development, and infrastructure,” Parson said in a press release, “and we must get this done quickly to protect Missourians and continue investing in Missouri’s future generations.”

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