Nevada Medicaid Spending Unsustainable

(Office of Nevada Gov. Jim Gibbons) – After a review of the state’s Medicaid spending patterns, the populations served by the program and, thankfully, the apparent demise of the federal health care reform legislation, Governor Jim Gibbons announced on Wednesday that he does not believe now is an appropriate time to opt out of Medicaid.

At the same time, however, the Governor encouraged Legislators and the state’s Congressional delegation to consider the fact that Nevada simply cannot afford to continue increasing its Medicaid spending at the current rate of growth.

“The average growth in General Fund Medicaid spending over the past decade is close to 10 percent,” the Governor said, “Our ever-growing Medicaid burden undercuts our ability to fund other state responsibilities and is crowding out education, public safety and infrastructure as components of our budget.”

The prime driver of Nevada’s Medicaid spending growth is caseload. While an average of 96,000 Nevadans per month received Medicaid in Fiscal Year 2000, that number jumped almost 250 percent to 238,891 Nevadans receiving Medicaid in December 2009.

In addition to the state’s existing budget shortfall and exploding Medicaid caseload growth, it is clear that the federal government’s plan to change health care in our country would drive more people into state Medicaid and significantly increasing the states’ health care costs.

The Nevada Department of Health and Human Services projected the initial, six-year cost of Sen. Harry Reid’s health care reform bill at $613 million in state General Funds. That would have included driving nearly 100,000 additional Nevadans onto Medicaid.

“Because it appears Sen. Reid’s plan is no longer viable, this crushing additional cost to the state isn’t forcing us to seriously consider opting out of Medicaid at this time,” the Governor said. “However, if Congress wants to pass the buck and shift the fiscal burden of health care reform directly onto the states instead of looking seriously at ways to reduce spending and costs, we will be forced to revisit the issue.”

The 2009 Legislature budgeted $986.9 million in state General Funds for Medicaid expenditures during the current biennium. Nevada’s Medicaid program has a total budget for the biennium, including federal and local spending, of just over $3 billion.