Nevada expects to spend more on Medicaid than planned
WHAT IS MEDICAID AND HOW LONG HAS IT BEEN AROUND?
Medicaid is a federal-state health care program for low-income and disabled people, including nursing home residents. This year, Medicaid is expected to cover about 69 million people, more than any other government health care program, including Medicare. On average, the federal government pays about 60 percent of the program’s costs, but that share varies by state. Medicaid was created in 1965, at the same time as Medicare, a similar program for older Americans.
HOW DID EXPANSION UNDER THE AFFORDABLE CARE ACT CHANGE MEDICAID?
A key component of the federal health care reform passed in 2010 was an expansion of existing Medicaid to include all non-disabled adults under the age of 65 with incomes at or below 138 percent of the federal poverty level, which is currently $16,243 for an individual. After the U.S. Supreme Court ruled that states could not be compelled to expand Medicaid, a number of states did not. Currently, 30 states and the District of Columbia have adopted the Medicaid expansion. A recent federal report estimates an average of 5.7 million “newly eligible” adults were covered in 2014, a number that will increase to about 12 million in 2023.
WHY ARE ENROLLMENTS AND COSTS DIFFICULT TO PREDICT?
In a recent report, economic experts at the U.S. Department of Health and Human Services said their estimates of enrollments and per-person costs for 2014 are higher than earlier projections. But they expect those trends to level off and even decline over the long run. Matt Salo, executive director of the National Association of Medicaid Directors, calls the projections “an imperfect science,” adding: “If you are going to do a big expansion, you should probably expect that more people will show up than you thought, and the people who show up will be perhaps ... sicker, more complex than you would have thought.”
HOW IS MEDICAID FUNDED, AND DO ANY OF THE RECIPIENTS PAY ANYTHING IN TERMS OF PREMIUMS OR COPAYS?
States are allowed to charge premiums and modest copayments for some groups of Medicaid recipients, but that is fairly limited.
DO RELATIVELY LOW REIMBURSEMENTS TO DOCTORS AFFECT ACCESS TO CARE FOR MEDICAID RECIPIENTS?
Some private-practice doctors do not accept Medicaid. Many Medicaid recipients are in private, managed-care plans designed specifically to serve them. Hospitals — particularly children’s hospitals — rely on Medicaid for a substantial portion of their budgets. While Medicaid beneficiaries may not have access to some doctors, options remain available for the medical care they need.
COULD THE 90 PERCENT FEDERAL COST-SHARE BE REDUCED WITH A REPUBLICAN PRESIDENT?
Under the 2010 federal health care law, the federal government was required to pay 100 percent of costs for the expanded Medicaid program through 2016. Beginning in 2017, states will begin paying a portion that will increase to no more than 10 percent of costs by 2020. Changing the 90 percent federal share would take an act of Congress and a president’s signature because the law itself would have to be changed. Any president could seek to amend the law for any reason, but he or she would need the approval of Congress.
WHAT CHANGES TO THE PROGRAM ARE IN THE WORKS AT THE STATE OR FEDERAL LEVEL?
At the moment, states are the main drivers of changes to Medicaid. It is a constant process, and the higher-than-anticipated enrollments and costs under the expansion could prompt some expansion states to consider changes. For instance, lawmakers in Ohio are seeking federal approval for a plan that would require about 1 million low-income residents to pay a new monthly cost for Medicaid coverage or potentially lose it. Higher-than-expected enrollment has pushed the state’s projected 2017 costs from $55.5 million to $130 million.
Many more Nevadans than expected have enrolled in Medicaid after Gov. Brian Sandoval opted to expand eligibility, meaning the state will be paying more than projected once the federal government scales back its support.
State officials say 181,051 people are now receiving benefits as a direct result of the Republican governor’s decision, which extends Medicaid eligibility to all non-disabled adults with incomes at or below 138 percent of the federal poverty level — currently $16,243 for an individual.
That’s well over the 144,340 new enrollees that state officials expected to have by this time when they were making the decision in 2012.
Nevada was among 30 states and the District of Columbia to expand Medicaid under the Affordable Care Act. The federal government agreed to pay all costs for the new enrollees through 2016, but it will begin lowering its share in 2017. States will pay 10 percent of the costs by 2020.
The overrun means Nevada expects to spend $22.6 million in state general funds for new Medicaid enrollees in fiscal year 2017, rather than the $8.5 million it projected.
More than a dozen states that opted to expand Medicaid under the Affordable Care Act have seen enrollments surge way beyond projections, raising concerns that the added costs will strain their budgets when federal aid is scaled back starting in two years. Nevada is one of at least seven states now increasing cost estimates for 2017, according to an Associated Press analysis.
Supporters of the expansion downplay budget concerns, predicting their states will save money in the long run because Medicaid will allow some state-run services to be eliminated and will stimulate the economy through new revenues and job creation.
While many of his fellow Republican governors have resisted expanding Medicaid, Sandoval has stood by his decision to widen eligibility. His chief of staff, Mike Willden, points to a dramatic drop in the number of uninsured Nevadans and said the higher-than-expected cost to the state general fund is a small price to pay for the major influx in federal funds the expansion has yielded.
The state paid about $522 million in general funds for newly enrolled and existing Medicaid recipients in fiscal year 2014, while it received a match of about $1.4 billion in federal funds that year. With more than 180,000 newly eligible recipients recently signed up, the state expects to pay $531 million in general funds for Medicaid this fiscal year, while receiving a federal match of $2.4 billion.