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State could see savings with expanded Medicaid

LINCOLN — Expanding Medicaid to cover all low-income Nebraskans could produce savings — not just costs — for the state, according to a national expert.

Joy Johnson Wilson, health policy director for the National Conference of State Legislatures, said Tuesday that states should take a closer look at the potential impact of the expansion that was authorized by the federal health care overhaul law.

Early studies of the impact looked primarily at the cost of adding people to state Medicaid rolls, Wilson said.

That was true in Nebraska, where a consultant brought in by the Department of Health and Human Services concluded that the expansion would cost the state more than $526 million from 2011 through 2020. Gov. Dave Heineman has cited that study in opposing the Medicaid expansion.

Legislative fiscal staffers detailed estimates Tuesday that pegged the cost of the expansion at $123.3 million from fiscal year 2013-14 through fiscal year 2019-20.

But both estimates tell only part of the story.

Wilson said the expansion would allow states to cut spending on some programs and reap other economic benefits, including boosting economic activity in health care and improving the health of the workforce.

Her testimony kicked off a day of legislative hearings on the costs and benefits of the Medicaid expansion.

Whether Nebraska should expand Medicaid is expected to be a major issue when lawmakers convene in January. A June ruling by the U.S. Supreme Court made the expansion voluntary for states.

The expansion would provide Medicaid coverage for all adults whose income does not exceed 133 percent of federal poverty guidelines — $14,856 for a single person or $25,390 for a family of three.

State Sen. Jeremy Nordquist of Omaha, a member of the Legislature’s Appropriations Committee, said studies in other states have concluded that the expansion would yield savings over time.

“What we need is a more nuanced, comprehensive understanding of what the costs are,” he said.

Nordquist cited one example of potential savings. The Medicaid expansion could pay for hospital stays by state prison inmates, many of whom are not currently eligible for coverage because they are single and have no dependent children. That could reduce the $2.1 million per year cost of such stays, he said.

Other speakers listed additional examples of savings provided through the federal health care law:

  Nebraska could close down its high-risk health insurance pool, freeing up about $27 million of insurance premium taxes that has been used to subsidize coverage for people with pre-existing health conditions. Under the federal law, insurers would not be allowed to deny coverage or boost premiums based on a person’s health status.

  Less state support would be needed for public behavioral health services, because more people would have private insurance policies or Medicaid that would cover those services. The federal law will require health insurance to cover mental health and substance abuse treatment.

  Less state support would be needed for public health services such as immunizations.

  Cancer screening programs for low-income Nebraskans could be eliminated or reduced, along with a special Medicaid program for breast and cervical cancer treatment for women whose cancers are discovered through the screening programs.

  A special state-funded Medicaid program for low-income people who have a disability that is expected to last less than six months could be reduced or eliminated.

  County governments could virtually eliminate their general assistance programs, which are required by state law to pay for the medical care of some very low-income people.

Currently only low-income parents, elderly people and disabled adults can qualify for Medicaid in Nebraska. The income cutoffs for each of the groups are well below 133 percent of the poverty line.

The Medicaid expansion would make an estimated 93,500 uninsured Nebraskans eligible for the state-federal Medicaid program, but between 60 percent and 75 percent are expected to take advantage of the coverage.

Contact the writer: 402-473-9583,

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