JEFFERSON CITY, Mo. -

Gov. Jay Nixon wants to know what modifications to Missouri's Medicaid system may be acceptable to federal health care officials.

Nixon talked over the phone Tuesday with Health and Human Services Secretary Kathleen Sebelius about a potential Medicaid expansion. Specifically, Nixon wanted to know how much flexibility Missouri has to make market-based changes or require co-payments from adults earning up to 138 percent of the poverty level, which is about $27,000 annually for a family of three.

Sebelius has said previously that states must expand Medicaid to that level in order to qualify for full federal funding.

After the phone call, Nixon released the following statement:

“The Secretary and I had a positive and productive conversation this afternoon about strengthening and reforming Medicaid. It is clear that moving forward and strengthening Medicaid will give us the flexibility we need to give Missourians the health system they deserve: one that protects taxpayers, rewards work, promotes personal responsibility and brings the tax dollars they send to Washington back here to Missouri.”

Earlier Tuesday, Nixon met with Republican senators about a Medicaid expansion. He says it was a substantive, thoughtful discussion.

Nixon urged senators to come together and pass an expansion before the end of the session. He told them to focus on five specifics: To make sure the state can opt out if the federal government decides to stop the flow of money, to create penalties for people who abuse the system, to create a market-based approach, to lower health care costs and to award workers.

"Accepting these federal dollars and using those to improve the health care in the state plus using these dollars clearly gives us a state budgetary benefit," said Nixon.

The current dilemma is lawmakers want to only expand services to 100 percent of the federal poverty level, but the federal requirements are 138 percent.

Senators tell ABC 17 News that Nixon should have come to them four months ago when they were figuring out their goals for the session.

"It's very late in the process we continue to have major concerns but we do appreciate the governor coming to the caucus," said Sen. Tom Dempsey of St. Charles.

Nixon says this unique opportunity could be advantageous for Missouri and give the state $2 billion in federal money for Medicaid improvement.

"I don't want this train to pass us by without us inuring the most positive benefit of Missouri taxpayer dollars on it," said Nixon.

Last Wednesday, Nixon met with House Republicans and asked them to focus on giving health care to more than 300,000 Missourians.

So far, however, Republicans have been reluctant to embrace the Medicaid expansion.