Missouri Press Association
Serving Missouri Newspapers Since 1867
The following is a legislative update from Clarkston Nelson, LLC concerning the Missouri General Assembly’s special legislative session. Use the information within to develop local coverage of issues important to your readers.
Governor Mike Kehoe officially signed Missouri’s Fiscal Year 2026 (FY26) state operating and capital improvement budget, totaling $50.8 billion, including $15.4 billion in general revenue. While many waited to see their fate and what the Governor decided to veto, several were surprised by the 208 line-item vetoes that were issued. In addition to the vetoes totaling nearly $300 million, the Governor also imposed 32 spending restrictions worth an additional $211 million in general revenue.
In the FY26 budget approved by the General Assembly back in May, nearly $775 million in new general revenue spending was added above the Governor's budget recommendation, including 450 items that Governor Kehoe did not propose or went beyond his recommendation. Additionally, the Office of Administration’s Division of Budget and Planning estimates a nearly $1 billion shortfall in general revenue starting in FY27.
There were also several budgetary and legislative decisions made during the 2025 Legislative Session and Extraordinary Session that were not considered in Governor Kehoe’s FY26 budget recommendation but compound the budgetary challenges the State is facing:
To view the complete list of budget vetoes, click here.
In addition to his vetoes in the FY26 budget, Governor Kehoe today also restricted spending on 32 budget items, totaling $211 million in general revenue, from the FY26 state operating budget. To view the complete list of expenditure restrictions, click here.
The Governor’s full press release can also be found here.
The Missouri General Assembly will be returning on September 10th for the constitutionally required legislative veto session where they can override any of the Governor's line item vetoes.
In addition to the appropriation bill signed by the governor, numerous policy bills remain on his desk for his final action. All legislation passed during the 2025 regular session must be acted upon by the governor by July 14th.
MO NEA Sues to Stop $50M ESA Appropriation
Immediately after the Governor signed the FY26 budget, the Missouri National Education Association filed suit to stop the $50 million appropriation to the MO Empowerment Scholarship Act, citing the “scheme to divert general revenues to what are essentially vouchers for the payment of private school tuition for elementary and secondary school students” is unconstitutional.
As you might recall, this is one of Governor Kehoe’s biggest agenda items. See the suit here.
Anthem BCBS/MU Healthcare
The Senate Committee on Insurance and Banking convened Monday June 30th for a public hearing to discuss the lack of contract agreement between Anthem Blue Cross Blue Shield and MU Health Care. Four groups were specifically called to testify: the Missouri Department of Commerce and (DCI) Insurance, Missouri Consolidated Health Plan (MCHCP), Anthem Blue Cross Blue Shield (Anthem), and MU Health Care (MU). First to testify was DCI Director Angie Nelson who provided information regarding the insurance plans that are regulated by their department and also provided background information regarding the number of Missouri citizens currently on Medicaid/Medicare, self-paid insurance plans, company sponsored plans and state plans. Additionally, information was provided regarding insurance premium trends, network adequacy trends and the difference between small and large pool insurance plans.
The committee then turned its attention towards MCHCP Executive Director John Wiemann, who provided information on the three self-insured medical plans, an HSA plan and two PPO plans offered to members, active employees and non-Medicare retirees. MCHP also administers dental and vision benefits for most members and to employees and retirees of the Departments of Conservation, Transportation and Missouri State Highway Patrol. Executive Director Wiemann stated the consolidation of healthcare providers has led to fewer choices and rising costs for consumers. Today, only two major carriers, United Healthcare and Anthem, compete statewide with only a few limited regional carriers doing product-specific offerings. The committee was also informed the RFP for MCHP was issued in 2024 and was structured for a five-year renewable on an annual basis. At this time, the renewal of the contract has been postponed but open enrollment begins October 1, 2025, and there is no longer time to issue a new RFP and enact a new contract with a different provider before the open enrollment deadline. Those who must receive care at MU Health Care will have to pay non-network fees and costs.
MU Health Care CEO Rick Ransom then appeared before the committee to provide context of the current contract issues, how insurance contracting is conducted, and address recent media speculation. CEO Ransom informed the committee MU Health Care is a non-profit safety net academic health system and are one of two in Missouri. It was stated they currently serve 25 counties, 800,000 people and, of those, 90,000 have Anthem insurance. They are currently experiencing a 7% per year increase in total operating expenses and a new provider agreement with Anthem was needed and needed to include material increases to achieve market level compensation for provided care. CEO Ransom then moved on to explain there are three different elements of provider agreements with managed care companies that have economic value and include rates (for hospitals and physicians), carve-outs and incentives. The initial proposal that was sent to Anthem in July of 2024 included a 13% increase per year over three years. Since that time, three additional proposals have been submitted to Anthem with the final proposal including an 8% increase per year over three years. During this time, it was stated, Anthem’s proposal remained the same and included a 1% increase for physicians and a 2% increase for hospitals. It was also stated, MU Health Care asked for a list of affected patients to attempt to provide care during the 90-day out-of-network period and was refused the list repeatedly. In conclusion, CEO Ransom stated they are in no way close to an agreement as Anthem has repeatedly refused to negotiate in good faith and have used the media to paint MU Health Care in a negative light to force non-favorable contracts.
Anthem Blue Cross Blue Shield President of Commercial Markets Rich Novack was the final witness called to appear before the committee. President Novak stated they provide administrative services for MCHCP, 83% of the membership that Anthem serves in Missouri is covered under a self-insured program and they provide services and not insurance. It was also stated Anthem approached MU twice about extending continuity of care and were rejected both times. Anthem included an offer which would base rates on value-based care and reduced the thresholds for what it takes to earn the extra funds. President Novack then read a final statement to the committee which said, “Anthem will take the existing policy contract language and agree to a three-year increase where each increase is a hundred basis points one full percentage point, higher than the published CPI. The most recent CPI published was 2.3 and they will agree to 3.3 within the existing provisions. Or, if MU Health Care would like to be paid like other academic institutions such as Kansas University or University of Kentucky (KU is not an Anthem plan), they will sign a deal that is structured exactly like the University of Kentucky with no alterations or amendments.”
At the end of the hearing, Chairman Sandy Crawford (R-Buffalo) decided to open the hearing for public testimony due to the number of private citizens who attended the hearing. Testimony was limited to two minutes for each person attending and included statements from physicians, patients, Mid-MO Healthcare Coalition, City of Versailles, Morgan County, and several other private citizens who shared their personal stories and highlighted the effects the ongoing contract disputes are having on their care.
Supreme Court Chief Justice
By order of the Court, Supreme Court of Missouri Judge W. Brent Powell will assume the role of chief justice beginning July 1. His two-year term as chief justice will run through June 30, 2027. He succeeds Judge Mary R. Russell, who remains on the Court.
Recent Special Legislative Session Enacts County Property Tax Freeze
The Special Interim Committee on Property Tax Reform has been established by House Speaker Jon Patterson (R-Blue Springs) following the recent Special Legislative Session to which legislation was passed to keep several professional sports teams in our state with the construction of new stadiums. As part of the final passed bill, the Senate added language that allows for various counties to cap or freeze property tax assessment increases if approved by local voters.
The language signed by Governor Mike Kehoe (R) in SB 3 in June related to county property tax assessments was the most contentious provision approved during special session. Senate Bill 3 contained a “severability clause”, which means if the courts invalidate the property tax freeze, then the other provisions within the bill survive.
A brief overview of the property tax language:
Specific counties eligible to freeze property taxes:
Counties with increases frozen at 5%
Counties with 0% increases
Missouri House Establishes Interim Study Committee on Property Tax Reform
Missouri House Speaker Jon Patterson (R-Lee’s Summit) has established the Special Interim Committee on Property Tax Reform upon the conclusion of the legislative special session this month. This interim committee will be Chaired by Rep. Tim Taylor (R-Booneville) and will study and make recommendations to ensure “fairness, transparency, and sustainability for taxpayers and municipalities across the state”. The Committee was created as the issue of “property tax reform” has gained significant momentum in the General Assembly and has become a major topic, often divisive, that will continue to be discussion in the upcoming years. Further, Speaker Patterson has suggested that he would welcome another legislative special session soon if called upon by the Governor to further address issues surrounding the recently passed property tax provisions of SB 3.
In Missouri, property taxes play a crucial role in funding local governments, public education, public safety, and countless other functions. Any modifications to state laws governing property tax assessments or local levies have an immediate effect on the school funding foundation formula that provides funding to elementary and secondary schools. In addition to the House Committee, Governor Mike Kehoe established a task force to examine the current school funding model and propose recommendations for modifications. This task force, Missouri School Funding Modernization Task Force was created last month and will be holding monthly hearings with the goal of providing a final report by December 1, 2026.
The House Interim Committee has scheduled their first meeting for Wednesday July 16th in Jefferson City.
