What Health Insurance Reform Means for Nevada Medicaid

(Phillip Moyer/Nevada News Bureau) – The recently-passed health insurance reform bill will lead to major changes for Nevada’s Medicaid program.

According to Ben Kieckhefer, a spokesman for the Nevada Department of Health and Human Services, the bill will require Nevada to extend its Medicaid coverage to families with children over the age of six whose income is below 133 percent of the federal poverty level, along with childless adults with an income below 133 percent of the poverty level. Previously, no childless adults qualified for Medicaid, and families with children over the age of six only qualified if their income was below 100 percent of poverty level.

After the Medicaid changes go into effect in 2014, Kieckhefer estimates that 80,950 Nevadans will qualify under the new rules during the first five years. Federal funds will pay the for the total cost of these newly eligible citizens through 2016. The funding will then gradually decrease to reach 90 percent in 2020.

However, Kieckhefer says the newly eligible Nevadans are not the only expense. The federal funding provided in the health care reform bill does not apply to Nevadans who already qualified for Medicaid before the passage of the bill.

In what he calls the “woodwork effect,” Kieckhefer estimates that due to the new federal mandate requiring all citizens to have health insurance, over 72,000 previously-qualified Nevadans will sign up for Medicaid. Nevada will not receive any additional federal coverage for those new insureds beyond the current Medicaid funding of about 50 percent of costs.

Current estimates show that reform bill Medicaid will cost the state about $600 million between 2014 and 2019, an amount Dan Burns, Governor Jim Gibbons’ Communication Director, says will put significant strain on Nevada’s ability to provide other services, such as public safety and education.

Burns said Nevada currently has no plan for how to pay for the projected $3 billion budget hole that will have to be tackled during the next legislative session.

As a result, Burns said, Gibbons is focusing on legal action to try to invalidate the law.

“The best thing that could happen to Nevada is if this law, this health care nationalization program, were struck down by the Supreme Court,” he said. “It simply can’t be paid for.”

Andrew Stoddard, spokesperson for Nevada Congresswoman Dina Titus, who joined follow House Democrats in passing the health care reform bill, said the “woodwork effect” referred to by Kieckhefer is a “ridiculous” and “misleading” argument.

If large numbers of uninsured individuals who qualify for Medicaid exist, Stoddard said, it is not a fault of the health care reform bill, but rather a fault of Nevada’s existing program.

“This is basically saying that Nevada has done a poor job of reaching out to people who are low-income, qualify for Medicaid and should be on it, but are not,” he said. “So they haven’t really been doing their part to reach out to people to let them know, ‘hey, you qualify for this. You can get help, or health care.'”

Stoddard added that even if people do believe the “woodwork effect” to be a legitimate problem, the insurance mandate doesn’t go into effect until 2014, so the increased cost will not have an effect on the state’s current budget woes.