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The Budget Impact of the Affordable Care Act

via flickr: Images_of_Money CC BY 2.0

There are many changes to come in health care in the next year and one topic pressing to Nebraskans is the Medicaid Expansion under the Affordable Care Act. On Tuesday, the Health and Human Services and Appropriations Committees of the state legislature considered the costs and benefits of a potential Medicaid expansion.

According to the National Conference of State Legislatures (NCSL), some states have already indicated that they will implement the expansion. Most states, however, are like Nebraska and weighing the options.

Individuals above the Federal Poverty Line (FPL) can receive a tax credit to purchase health insurance through the new health care exchange. Health care exchanges are the new insurance marketplaces and those with incomes of less than 400% of the FPL are eligible for tax credits.

However, without an expansion of Medicaid, there are individuals who would fall into a coverage gap of being unable to access Medicaid and also ineligible for any assistance through the exchange. In Nebraska, those who currently qualify for Medicaid include children, low-income parents, elderly people, and disabled adults. Expanding Medicaid would change this to help cover most lower income families, producing not only costs but also savings. The estimated cost given by Legislative Fiscal Office for the fiscal year 2013-14 through fiscal year 2019-20 was $123.3 million.

The committees were also encouraged to consider the cost of uncompensated care. According to the Nebraska Hospital Association, more individuals are selecting plans with high deductibles that they can’t afford to pay leaving hospitals with the deductible cost which is then passed on to others in the form of higher insurance costs. Dr. Jim Stimpson from UNMC stated that the Medicaid expansion in Nebraska could create a reduction in the current state costs of uncompensated care from $1 billion to $419 million between the years of 2014 and 2019.

What also stood out about the hearing was that there was a significant piece of the discussion missing. During the first part of the hearing, state Medicaid Director Vivianne Chaumont gave a “Medicaid 101” presentation, but made no mention of how health care reform will impact the Medicaid program and declined to speak on the portion of the hearing dedicated to the cost of health care reform. (See article in Omaha World-Herald further regarding this issue).

Regardless of whether or not the state chooses to expand the Medicaid program, health care reform will have an impact on our existing Medicaid program. The Medicaid program will have to interact with the Exchange on determining eligibility. The Department could also be providing helpful information about the capacity of our Medicaid provider network, or suggesting potential changes to the program that might facilitate better integration with overall system changes. The fact that we have heard nothing publicly from the Department of Medicaid on these issues is troubling, and raises concern for the 1 in 4 Nebraska kids who receive their health insurance through this program.

At the close of the hearing, a concerned citizen testified that he is one of the many currently struggling to find affordable care. He said that to cover his family of four, 50% of his current income goes into health care. This is the type of family that health care reform is intended to help, and we hope that policymakers will keep the impact on Nebraska families at the forefront in making decisions.

We need to work toward making health care affordable for all families. Expanding Medicaid to cover more low-income families would be a significant step forward in reaching this goal.

More information on the hearing:

Lincoln Journal-Star

Omaha World-Herald


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