Medicaid expansion would hurt state priorities

The Nebraska Legislature recently held a public hearing on LB 577, a bill to bring President Obama’s massive unfunded Medicaid expansion to Nebraska. To no one’s surprise, liberal advocacy groups have voiced support for the optional expansion, but ultimately it would be at the expense of our state priorities, including education. What you don’t hear from them is a discussion about the enormous and unsustainable costs of this expansion and who’s going to pay for it.

Today, I’d like to share information with you about the burden that would be placed on you, the taxpayers of Nebraska, if Nebraska were to choose to expand Medicaid. So, what is Medicaid?

Medicaid is a federal and state-based program that provides health coverage for low income children, families, pregnant women, the elderly and people with disabilities. Medicaid pays for a multitude of services, including preventive care, immunizations, screening and treatment of health conditions, doctor and hospital visits, and vision and dental care.

In Fiscal Year 2012, Nebraska Medicaid covered nearly 238,000 people at a total cost of more than $1.6 billion in federal and state funding. The cost of the current Medicaid program is growing faster than any other program or item in the state budget.

How does Obamacare affect Medicaid? Obamacare creates both an individual mandate to have health insurance as well as establishment of health insurance exchanges. Effective January 1, 2014, states will be burdened with a significant increase in the number Medicaid enrollees.

This increase will come from individuals who are currently eligible, but have not applied previously and from individuals switching from private insurance to Medicaid because of changes in the private health insurance market. The Medicaid benefit package is richer than most private insurance plans and has no premiums or deductibles.

For the mandatory provisions of Obamacare, the Department of Health and Human Services estimates that there will be more than 48,000 Nebraskans who will be new enrollees in the Medicaid program through Fiscal Year 2020. These new enrollees, in addition to the current 238,000, will increase the cost of the program to taxpayers by an additional $770 million. That is a huge and unsustainable cost to Nebraskans.

This new state spending for President Obama’s new federal health care law is money that should be going to state aid to education, special education, early childhood programs and higher education.

LB 577 would expand Medicaid eligibility beyond the current requirement levels. The Department of Health and Human Services estimates that the expansion under LB 577 will result in yet another group of approximately 95,000 new Medicaid clients through Fiscal Year 2020 at an additional cost of $2.7 billion to Nebraska taxpayers.

This is an unaffordable and unsustainable burden to place upon Nebraska’s taxpayers.

These advocacy groups will tell you that it’s “free” federal money, but they conveniently forget to tell you that it’s your tax dollars. It’s not free federal money. It’s our tax dollars. They say the federal government will pick up 90% of the cost and the state will only have to pay 10% of the cost.

However, they don’t want you to know that 10% is hundreds of millions of dollars of new state spending. Additionally, the federal government doesn’t have a history of fulfilling its commitments. For example, the federal government said it would fund special education to the states at 40 percent. Currently, they only pay 18 – 19% of the cost.

The proposed optional Medicaid expansion is unaffordable and will result in less funding for the education of our children or higher taxes on Nebraska’s middle class families.

Our priority should be the education of our children.

Gov. Heineman’s staff can be contacted at 308-632-1370.