Would Nevadans pay higher taxes to cover Medicaid expansion?
Nevada’s Medicaid expansion has been getting a lot of love from Gov. Brian Sandoval, Sen. Dean Heller and others who want Washington to continue paying the bulk of the program’s tab.
But if Nevada taxpayers had to pay the full cost of the expansion, it’d have less support than Harry Reid running for president of a Republican women’s club.
Under Obamacare, the federal government paid the full cost of that expansion from 2014 to 2016. Nevada pays 5 percent of the costs in 2017 and by 2020 will pay 10 percent of the bill.
Nevada officials projected a maximum of 78,000 people would be added to the Medicaid rolls. In June, Sandoval shared that 210,000 new adults have enrolled. Oops. Bureaucrats were off by just 300 percent or so. (Remember that the next time someone touts the certainty of government predictions.)
If Nevada had to pay the entire bill, it would cost the state $1.2 billion a year. That’s about half of the Clark County School District’s general fund budget. That amount would require a 2 percentage-point increase in the sales tax or a tripling of the Modified Business Tax. A tax hike of that magnitude would almost double the size of the 2015 tax hike Sandoval pushed through, which was the largest in Nevada history.
A massive tax increase to give “free” health care to abled-body adults above the poverty line would be a non-starter.
Because of Obamacare, Nevada’s share of those costs is about $60 million in 2017. Legislators could have used that money for education. Anyone know of a school district that could use an extra $60 million this year?
If you think the Medicaid expansion won’t strain school budgets further, just wait. The state’s share of the expansion is expected to grow to about $120 million in 2020.
The more than $1.1 billion Washington will spend on Medicaid in Nevada this year is fiscally unsustainable. That’s one of the main reasons Republicans have been trying to repeal and replace Obamacare.
The “free” money coming into Nevada is a microcosm of our nation’s larger health care problems, in which cost-shifting and third-party payments hide the actual price of care from taxpayers and patients. Beneficiaries have no ability to comparison shop and no incentive to seek less-expensive care because they can’t see the costs and they don’t directly pay them.
Sandoval’s insistence on preserving the flow of federal funds continues to put Heller in a political pickle. Sandoval and Heller held a joint news conference in June that doomed one Republican effort to repeal Obamacare. Sandoval’s major objection was any reduction to future federal Medicaid funding. Heller, who’s up for re-election this year, even voted against repealing Obamacare entirely after years of voting to kill it.
If the Medicaid expansion is so beneficial to the state and its people, shouldn’t Nevada’s top elected officials be willing to ask Nevadans to pay for it themselves?
Since then, Heller has drawn a serious primary challenger in Danny Tarkanian and has taken steps to replace Obamacare. Heller has signed on as co-sponsor to the last remaining Obamacare-replacement proposal.
The key feature of the plan is block-granting money to the states and allowing them increased flexibility in how they spend it. While the plan leaves some Obamacare taxes in place, it slowly decreases federal government spending.
Sandoval’s spokeswoman didn’t provide a statement.
To Sandoval, paying for federal spending is someone else’s problem.
You’re a state and federal taxpayer. It’s your problem.
Victor Joecks’ column appears in the Nevada section each Sunday, Wednesday and Friday. Contact him at vjoecks@reviewjournal.com or 702-383-4698. Follow @victorjoecks on Twitter.
