Medicaid plan called one of Nevada government’s biggest expansions

The projected increase from 319,827 Medicaid recipients at the end of the current budget on June 30, 2013, to 490,103 on June 30, 2015, represents a 53 percent increase over two years. Total enrollment would represent nearly 18 percent of the state’s entire population.

The program’s expansion, paid jointly by the state and federal government, is largely because of Patient Protection and Affordable Care Act – Obamacare – provisions to kick in on Jan. 1, 2014.

Gov. Brian Sandoval supports the expansion and has included it in his proposed 2013-15 budget. It is now up to lawmakers to debate the expansion and other aspects of the program. There has been strong bipartisan support for the recommendation.

Mike Willden, director of the Department of Health and Human Services, said it is easily the single largest undertaking in his 25 years with the agency.

"It will be huge," he said. "From eligibility workers, new offices, automated systems, mental health, Medicaid. It is a very large expansion."

The state Welfare Division would hire 440 more workers in the new budget primarily because of the Medicaid expansion, Willden said.

When state residents who are expected to buy health insurance through the separate Silver State Health Insurance Exchange are included, Nevada’s uninsured population, now totaling 605,000, will be halved – 11 percent, down from 22 percent, he said.

The 300,000 remaining uninsured will have chosen to pay a penalty rather than buy health insurance, and illegal residents are not eligible.

ADVOCATE WELCOMES EXPANSION

Jon Sasser, statewide advocacy coordinator for six civil nonprofit legal services programs, said the proposed Health and Human Services budget is a vast improvement from two years ago, when major cuts and service reductions were on the table.

The reduction in the uninsured population will "make a huge difference in the lives of my clients and the state’s economy in terms of bringing in all that federal money," he said. "So those are great things."

But even with the expansion, the agency’s budget has not recovered from cuts since 2007, Sasser said.

There are three distinct parts to the Medicaid expansion:

■ First there is the regular caseload increase that comes every two years. That accounts for about 24,000 more Medicaid recipients by the end of the second year of the 2013-15 budget.

■ Then, because of the mandate in the Affordable Care Act to buy health insurance, an estimated 68,181 Nevadans now eligible for Medicaid but not enrolled are expected to be in the program by 2015.

■ Finally, with Sandoval’s decision to expand Medicaid to a newly eligible group of residents because of the Affordable Care Act, another 78,027 Nevadans are expected to enroll when the expansion takes effect next year. The expansion will cover a new group of Nevadans, childless adults, under 138 percent of poverty.

Most of the $768 million cost of this massive expansion over the coming two years will be paid for by the federal government, in part because the addition of the newly expanded group of recipients will be paid fully at the federal level for the first several years.

The state general fund will pay about $87 million of that total in the new budget.

ULTIMATE COSTS TO STATE UNKNOWN

Sandoval’s decision to opt into covering the newly eligible group of Medicaid recipients, despite his long-standing objection to the health care law, is being followed by a handful of Republican governors in other states, including Arizona and New Mexico. Far more are opposing the expansion.

In his State of the State address on Jan. 16, Sandoval said his "comprehensive" approach to Medicaid will create as many as 8,000 new, mostly private-sector health care jobs and inject more than $500 million into Nevada’s economy over six years.

"But the issue of long-term health care costs remain," he said. "As such, I believe we must ask certain Medicaid patients to make a modest contribution toward the cost of their own care. And I will insist that Nevada be able to opt out of the Medicaid expansion program in future years, should circumstances change."

Opting out after expanding Medicaid is an option, but it is unlikely as states rarely reject federal funding once it has been accepted.

Federal funding will pay for 100 percent of the Medicaid expansion for the first three calendar years beginning in 2014, with the state required to pick up a percentage of the cost starting in 2017. The first-year state cost is 5 percent, in 2018 the state cost is 6 percent, in 2019 the state cost is 7 percent, and in 2020, the state cost is 10 percent.

Legislative Democratic leaders have favored the expansion.

"A strong health care system also creates a good environment for job growth, and we applaud the governor’s decision to expand Medicaid in Nevada, under President Obama’s Affordable Care Act," state Senate Majority Leader Mo Denis, D-Las Vegas, said in his response to Sandoval’s speech.

Senate Republican leaders have also endorsed the expansion.

"Ensuring that poor Nevadans have access to primary health care through Medicaid is very simply the right thing to do, both for our citizens and our economy," said Senate Minority Leader Michael Roberson, R-Las Vegas. "It will reduce our rate of uninsured and provide individuals with greater economic security."

CO-PAY IDEA COULD FACE CHALLENGE

Willden said the regulations on the cost-sharing aspect of the program were just issued by the federal government two weeks ago, so it will take time to analyze the new rules. Cost sharing would not take effect until July 1, 2014, the second year of the budget.

Cost sharing encourages people to take personal responsibility for their health. It is intended to encourage wellness and prevention and discourage the use of hospital emergency rooms for nonemergency illnesses or injuries.

A co-pay element could be part of a cost-sharing plan, but it will face scrutiny by lawmakers who must OK the idea before it can go into effect.

No co-pay amount has been determined, but it is expected to be nominal, in the range of $4 for doctor visits or other outpatient services.

"It’s not a big budgetary issue," Willden said. "It’s really looking at controlling costs; better health care, better outcomes."

This aspect of Sandoval’s Medicaid budget has met resistance in the Democratic-controlled Legislature.

Senate Finance Chairman Debbie Smith, D-Sparks, said even a small co-pay amount can be significant for a low-income family.

"If your income is $10,000 a year, $5 is a lot of money," she said.

It might be better to use a carrot instead of a stick to encourage Medicaid recipients to use lower-cost options for medical care such as doctor visits instead of hospital emergency rooms, Smith said.

Medical providers have also said it would be a lot of trouble to process paperwork for such a small sum, she said.

Sasser said he will wait for more details before commenting.

"Co-pays seem to presume that poor people over-utilize health services and they need some disincentive to do that," he said. "There’s no data to back that up. In fact most of the data is that people avoid needed medical care if you make the co-pay something that they are really going to feel."

They then delay seeking care, which ends up costing even more, Sasser said.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900.