LINCOLN – The Legislature’s Health and Human Services and Appropriations committees held an interim study hearing Nov. 27 on the cost efficiency of a Medicaid expansion under so-called Obamacare -- the Affordable Care Act. The U.S. Supreme Court has ruled that Medicaid expansion under ACA would be optional for states, not required.
Sen. Jeremy Nordquist of Omaha introduced the interim study so the Legislature can decide if Nebraska should participate in Medicaid expansion.
Both upfront and long-term costs are a concern.
Nordquist presented statistics from studies across the country on the potential long-term savings of the expansion.
According to a University of Michigan study, after 10 years there would be $980 million in savings on health care costs. Other studies across the country showed savings from $670 million in Maryland to $6.5 million in Idaho.
States that choose to participate in the expansion would get federal funding for 100 percent of the program for the first three years, [a provision that stemmed from the so-called “Cornhusker Kickback” – Editor].
However, this wouldn’t completely cover the administrative and information technology costs. After the first three years, the federal government would slowly cut some funds until reaching 90 percent by 2020.
Various health professionals suggested a problem with determining costs or savings for Nebraskans, because it’s difficult to determine how many eligible people would participate. Many people eligible for Medicaid now do not participate.
Under the Medicaid expansion, as with the Affordable Care Act itself, the system works better with a higher participation rate. The more people in the pool, the lower the costs will be for everyone. Without predicting how people will decide to opt-in, there aren’t any clear answers as to costs and savings for Nebraskans.
Jim Stimpson, the director of the Center for Health Policy Analysis at the University of Nebraska Medical Center, said that uncompensated care of uninsured people treated at emergency rooms and hospitals is a factor contributing to rising health insurance premium costs. If Nebraska opted into the expansion, Medicaid would cover some of that uncompensated care.
The Legislature will continue to look at the issue when it convenes in 2013.