October 20, 2014

Gov. Heineman says the state cannot afford to expand Medicaid (AUDIO)

Gov. Dave Heineman

Gov. Dave Heineman has sent a letter to three state senators, stating that Nebraska cannot afford to expand Medicaid under provisions of the 2010 federal healthcare law.

Heineman addressed the letter to Sen. Kathy Campbell of Lincoln, Sen. Mike Gloor of Grand Island and Sen. Jeremy Nordquist of Omaha. The governor stated that if the state expanded Medicaid it would either have to cut other state programs or raise taxes.

“The bottom line is the unfunded Medicaid expansion will ultimately cost the State of Nebraska hundreds of millions of dollars. Furthermore, the federal government has a history of not fulfilling their financial commitment. A good example of this is the federal government’s failure to adequately fund special education.

“My position is very clear – Nebraska can’t afford an unfunded Medicaid expansion.”

In an interview with Nebraska Radio Network, Heineman said that if state senators want to expand Medicaid, they need to submit a plan to pay for it.

“Those who want to expand Medicaid they need to let all of us know how they are going to pay for it and if you know our budget, you’re either going to cut education or raise taxes. I’m opposed to both of those,” Heineman told us.

The largest programs within the state budget are Medicaid, public school funding and funding for higher education.

The United States Supreme Court upheld the 2010 federal healthcare law. But, the court ruled that the federal government cannot compel states to expand Medicaid. The federal law provides an incentive for expansion. Under the law, the federal government would pay the entire cost of expansion for the first three years. The government promises to pay 90% thereafter.

Still, Heineman insisted that even a 10% share could run into the hundreds of millions of dollars. Sen. Nordquist has suggested that the state could find the money to pay for the expansion by dissolving the state-run high-risk health insurance pool that would no longer be necessary and by shifting a portion of the added money flowing into the state roads program.

Heineman dismissed the suggestion.

“They don’t really have a means to fund this,” Heineman said. “The legislature enacted LB 84 a year and a half ago and I signed it into law to continue to fund roads in this state so we can have economic development. That’s not a very good plan at all.”

Though the Supreme Court has upheld the law, Heineman says the American public will have the final say on it November 6th.

“The American people are going to send us a message,” Hienman said. “If they re-elect President Obama, they want the new federal healthcare law. If they don’t want Obamacare, then they’ll elect Mitt Romney and those results will be very instrumental in terms of how this whole issue moves forward in the future.”

 

The text of the letter, carbon copied to all State Senators, follows:

“Dear Senator Campbell, Senator Gloor and Senator Nordquist:

“Senator Nordquist has sent several emails on behalf of the three of you inviting Director Chaumont to your organizational meeting on July 12 to discuss expanding the Medicaid program as part of the new federal health care law. Additionally, you asked for information about exchange planning and the implementation of Obamacare. Those issues are the responsibility of the Department of Insurance, and the Department of Insurance will be providing the Legislature’s Banking, Commerce and Insurance Committee an update at its formal public hearing on July 19th.

“Regarding the unfunded Medicaid expansion and the implementation of Obamacare, I am very concerned that the new federal health care law will continue to dramatically increase the cost of health care. In overhauling America’s health care system, President Obama should have focused on controlling health care costs.

“America needs patient-centered health care that emphasizes prevention, wellness and quality outcomes. For example, the State of Nebraska has implemented a wellness program along with plan design changes that have significantly reduced the normal increases of health insurance premiums. America needs an efficient electronic medical system that reduces costs to replace an outdated inefficient paper-based system. I want to note that America’s electronic financial system has efficiently reduced costs through electronic transactions. Electronic payments are cheaper, more efficient and more secure than paper transactions. The health care industry has lagged in the use of technology to develop a comprehensive electronic medical system.

 “America needs hospital transparency for the consumers of health care. The prices of routine medical operations ought to be posted on the Internet so that citizens can make more informed decisions about the cost of medical care. Competition in health care could reduce costs.

“More specifically about the unfunded Medicaid expansion, the United States Supreme Court ruled that this expansion is optional and that the federal government cannot force the states to expand Medicaid.

“My biggest concern is that an unfunded expansion of Medicaid means state aid to education for the Omaha, Lincoln, North Platte and Lexington Public Schools and many other Nebraska school districts will be cut.

“Special education funding for all Nebraska school districts will be cut.

“Funding for the University of Nebraska at Lincoln, Omaha and Kearney and the University of Nebraska Medical Center will be cut.

“Funding for Western Nebraska Community College, Mid-Plains Community College and Nebraska’s four other community colleges will be cut.

“Funding for Chadron State College, Wayne State College, and Peru State College will be cut.

Or taxes will be increased.

“My priorities are the education of Nebraska’s children and job creation for Nebraska’s families.

Cutting funding for the education of Nebraska’s children and increasing taxes on Nebraska’s families are not my priorities.

“According to the Legislative Fiscal Office, the State of Nebraska has a projected shortfall of $619.7 million for the upcoming biennium. Expanding Medicaid would add to the projected shortfall. Implementing Obamacare would add to the projected shortfall.

“As you know, the Supreme Court decision is very intricate and deeply complex. Reviewing this decision in a detailed, thoughtful and responsible manner will take weeks and months before a complete determination can be made on what this ruling means for Nebraska.

“The National Governors Association, the National Conference of State Legislatures and the National Association of Insurance Commissioners are planning meetings in late July and early August to brief the states about the comprehensive nature of the Supreme Court ruling.

“The bottom line is the unfunded Medicaid expansion will ultimately cost the State of Nebraska hundreds of millions of dollars. Furthermore, the federal government has a history of not fulfilling their financial commitment. A good example of this is the federal government’s failure to adequately fund special education.

“My position is very clear – Nebraska can’t afford an unfunded Medicaid expansion. Since your meeting is an organizational meeting with advocacy groups that support an expansion of Medicaid, even if it means a tax increase, Director Chaumont will not be attending your meeting.”

AUDIO: Brent Martin talks with Gov. Dave Heineman about his letter to senators about Medicaid. [6:45]