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After rejecting Medicaid expansion for each of the last three years, Nebraska lawmakers are once again counting the cost.
And once again, the cost is high.
The Nebraska Department of Health and Human Services this week posted a report by Optumas, a private actuarial firm, to analyze the 10-year cost of LB1032, state Sen. John McCollister’s (R-Omaha) bill to expand Medicaid by adopting a Transitional Health Insurance Program.
Using Medicaid dollars, newly eligible enrollees would purchase qualified health plans (QHPs) through the state’s health insurance exchange. Under the Affordable Care Act, the federal government would pay 100 percent of new Medicaid expansion costs for the first three years, with the federal share declining to 90 percent thereafter.
But the Optumas study finds that even with federal assistance, the 10-year cost of Nebraska’s share for the proposed Medicaid expansion plan would reach almost $1 billion.
Here are the report’s 10-year projections:
“Total Spend”: $14,781,000,000
“Federal Share”: $13,803,000,000
“State Share”: $978,000
And that’s a “conservative estimate,” said Calder Lynch, DHHS Director of Medicaid and Long-Term Care in a press release:
“Because there are many uncertainties, these costs could rise with a change of the federal matching rate or the under-collection of member contributions as required in the bill. I have serious concerns from both a fiscal and policy perspective.”
McCollister’s plan follows a Medicaid expansion model Arkansas adopted in 2014, which grossly underestimated the number of enrollees (300,000 vs. 215,000), according to a study by the Platte Institute for Economic Research. In Arkansas’ Failed Medicaid Experiment: Not a Model for Nebraska, authors Jonathan Ingram and Nicholas Horton write that 41 percent of Arkansans are now on the state’s Medicaid rolls. They warn Nebraskans to heed their neighbor-state’s cautionary tale:
This new approach to Medicaid expansion is unaffordable and unpredictable, pushes adults out of private insurance and into taxpayer-funded welfare, puts the truly needy on the chopping block, discourages work, and shrinks the economy. So it should be no surprise that, last year, Iowa policymakers scrapped the model entirely and Arkansas enacted legislation to repeal the expansion altogether at the end of 2016. Nebraska policymakers should learn from these mistakes, not repeat them.
Nebraska Governor Pete Ricketts (R) has made Arkansas’s experiment a pillar in his argument against McCollister’s plan.
The Heartland Institute’s Health Care News will cover Nebraska’s Medicaid deliberations in its next issue.
Image via Thinkstock