A study by the University of Nebraska Medical Center public policy arm concludes that while it will cost the state to expand Medicaid, Nebraska will reap benefits as well.
Director Jim Stimpson with the UNMC Center for Health Policy spokes about the study’s findings [click here for link to full study] during testimony before a legislative public hearing. Stimpson told state lawmakers a report by the center calculated that if the state expands Medicaid, uncompensated care will drop from $1 billion to $419 million.
“The reduction in uncompensated care spending would aid hospitals and other care providers and also have the potential to reduce or, at least, potentially hold constant health insurance premiums,” Stimpson told legislators.
Stimpson gave his testimony during a joint meeting of the Health and Human Services Committee and the Appropriations Committee at the Capitol.
Gov. Dave Heineman opposes the expansion of Medicaid, claiming it would cost the state hundreds of millions of dollars. He also argues that the federal government is likely to renege on its promise to pay 90% of the cost. Under provisions of the federal health care law, states can extend Medicaid coverage to those making up to 138% of the federal poverty level.
The federal health care law promises the federal government will pay all of the cost of expansion for the first three years, phasing down to 90% thereafter.
Exact figures of the cost to expand Medicaid seem a bit elusive. It appears expansion would cost state government between $140 million and $168 million once it has to provide the 10% match.
Stimpson said the Center for Health Policy report anticipates that an expanded Medicaid program in Nebraska would cut in half the number of Nebraskans without health insurance, now at more than 230,000.
The study calculates that any additional cost to the state will be more than offset by an influx of additional federal funding, which will ripple through the state economy. The study says Nebraska will reap an additional $2.9-to-3.5 billion through 2020 by expanding Medicaid.
“Spending by the federal government on Medicaid expansion would generate at least $700 million in new economic activity every year in Nebraska, which could result in substantial impact on job growth in Nebraska,” according to Stimpson.
Stimpson says other studies indicate expansion would make for a healthier state population.
“For example, a recent study in the New England Journal of Medicine found that for every 176 adults covered under the expanded Medicaid, one death per year would be prevented,” Stimpson testified. “In Nebraska, this could mean translated roughly to about 500 deaths would be prevented.”
AUDIO: UNMC Center for Health Policy Director Jim Stimpson testifies before legislative hearing. [9:45]