State lawmakers learn there is much more to learn about how the federal health care law will impact the state budget and whether expanding Medicaid under federal rules would benefit or financially cripple the state.
Gov. Dave Heineman has insisted repeatedly that the state cannot afford to expand Medicaid under the regulations of the federal health care law approved by Congress in 2010. Though the federal government will cover the full cost of expansion for the first three years and 90% of the cost thereafter, Heineman has stated expansion would cost the state hundreds of millions of dollars. The governor has warned that expansion would force the state to take money from other programs, such as state aid to schools, to pay for it.
The legislature began its investigation of the cost of the federal health care overhaul on Nebraska and whether the state can afford to expand Medicaid Tuesday with day-long hearings held by the Health and Human Services Committee and the Appropriations Committee.
Sen. Jeremy Nordquist of Omaha, who has pushed for the legislature to expand Medicaid, stated that the legislature needs to get a better handle on the cost. Nordquist stated that the Unicameral needs to consider not just the cost of expansion, but the benefits Nebraska would accrue through expansion.
Nordquist cited estimates from the state of Michigan that Medicaid expansion could actually save that state $983 million over a 10-year period and a study in Maryland that claims expansion could save $670 million over that same period through expansion. Both studies go well beyond direct savings and include the economic benefits of healthier residents. A study conducted by the state government in Idaho considered more direct benefits of expansion, such as a dramatic drop in uncompensated care at its hospitals, and concluded Medicaid expansion could save $6.5 million over 10 years.
Trying to decipher what expansion might cost and how it might benefit Nebraska has just begun.
Cost estimates, according to Legislative Fiscal Office Director Liz Hruska, are difficult to nail down. The crux of the problem, she says, is that no one knows how many eligible Nebraskans will actually participate.
“We just don’t know,” Hruska told the committees. “This is a major initiative and there just isn’t really any kind of clear guidance on what will happen.”
Nebraska has an estimated 238,000 residents without health insurance.
Medicaid expansion would provide coverage to those making up to 138% of the federal poverty level. Some Nebraska residents who are eligible for Medicaid now are not enrolled. It isn’t known how many eligible under expansion would enroll. The Legislative Fiscal Office estimates Nebraskans potentially eligible under and expanded Medicaid would top 194,000.
Medicaid cost state government nearly $700 million, second only to public school aid in the state budget.
AUDIO: Brent Martin reports [:40]