Mississippi lawmakers reached an agreement late Monday on a proposal to expand Medicaid under the Affordable Care Act, providing largely free health coverage to an additional 200,000 low-income residents in a state with dire health outcomes and numerous rural hospitals facing financial collapse.

The State Senate and House of Representatives, both of which have Republican supermajorities, reconciled their competing plans by agreeing to extend coverage to people with incomes up to 138 percent of the federal poverty level, or just over $20,000 a year for a single person, but the new recipients would be required to work at least 25 hours a week.

The proposal still faces daunting hurdles, including a possible veto from Gov. Tate Reeves, a Republican who opposes Medicaid expansion, and the Biden administration’s stiff resistance to imposing work mandates.

Even so, the agreement represents a breakthrough for Mississippi, where a coalition of hospital leaders, the broader business community, religious groups and a bipartisan bloc of elected officials have pressed lawmakers to join the 40 other states that have expanded Medicaid over the past decade. Besides Kansas and Wyoming, all of the holdout states are in the South.

“We know this is a historic piece of legislation,” Representative Missy McGee, the Republican chairwoman of the House Medicaid committee, told reporters during the negotiations.

For years, Republican officials in Mississippi were among the most vocally opposed to expanding Medicaid, a program that has played a crucial role in the Affordable Care Act’s success at reducing the number of Americans without health insurance. In his State of the State address last year, Mr. Reeves assailed what he described as a campaign led by Democrats for “the expansion of Obamacare, welfare and socialized medicine,” using language that many other Republicans around the country abandoned as the law gained popularity.

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