JEFFERSON CITY Missouri health care providers stand to see a significant boost in payments for treating Medicaid patients under Gov. Jay Nixons proposal to expand the health care program for the poor.

The budget proposal Nixon released last week would close a long-standing gap between what Medicaid pays for health care and what providers get on the private market, but it would also add millions to the federal governments tab for the expansion.

Supporters of the governors plan say increased Medicaid payments will encourage more doctors to accept patients from the Medicaid program, as several thousand people enter the system.

Opponents say the plan will increase costs charged to the federal government for implementing the optional provision of the federal Affordable Care Act.

Nixon, a Democrat, made the Medicaid expansion plan a key focus of his State of the State speech, but GOP leaders have largely balked at the proposal.

Its all a process, Nixon said Monday. My sense is were clearly moving in a positive direction.

The expansion would add some 260,000 Missourians to the program in the coming year, according to estimates from the governors budget office. The federal government already pays part of Missouris Medicaid costs. Under the federal health care law, it would pick up the full tab for new recipients in the first three years and continue paying most of the costs beyond that.

Nixons budget proposal calls for $907.5 million in federal spending for the influx of new Medicaid enrollees. That includes about $82 million to bring Medicaid payment rates up to commercial levels.

State budget director Linda Luebbering said the payment increase could ultimately make the program more efficient by drawing more doctors into the system, which could make cheaper preventive care more accessible.

By using rates that are closer to the commercial rates, we hope to encourage more active participation by doctors and other care providers, she said. If this proves to be a cost-effective strategy, we could broaden the concept to the rest of the Medicaid population.

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Gov. Jay Nixon's Medicaid proposal would mean millions for health care industry