Medicaid Expansion Will Appear on Nebraskans’ 2018 Ballot

Published August 28, 2018

The proposal from Insure the Good Life needed 85,000 valid signatures in order to land on the ballot.

‘Might Overwhelm the System’

Nebraska state Sen. Merv Riepe (R–Ralston), chair of the state legislature’s Health and Human Services Committee, says he worries Medicaid expansion will further undermine the program’s already poor fiscal condition.

“My concern is with the potential impact on those that are already on Medicaid and are considered to be the most vulnerable within our state,” Riepe said. “I’m concerned it might overwhelm the system. I’m not saying something doesn’t have to be done, but there has to be a better alternative.”

The Medicaid expansion formula in the Affordable Care Act creates incentives for states to neglect their neediest people, Riepe says.

“We have 230,000 individuals enrolled in Medicaid as it is today,” Riepe said. “The challenge gets to be if we’re getting 50 cents on the dollar for all of those that are currently on Medicaid through the federal match but we’re going to get about 94 cents for those people on the new, expanded Medicaid. From a financial standpoint, there’s every incentive to take money away from the ones that we’re only getting 50 cents on the dollar for in favor of going after the ones we’re getting 94 cents on the dollar for.

“So it’s distorted and what I would consider an unhealthy approach to financial incentives,” Riepe said.

Budget Pressure

Riepe says he has no idea how the state would be able to pay for an expanded Medicaid program.

“I don’t think the will is there to take more away from the rainy day fund,” Riepe said. “Making budget cuts to pay for Medicaid expansion is a really an unhealthy approach. The other big spenders in the state budget are prisons and education and transportation and things like that, which have already taken some cuts.”

Riepe says he has proposed cheaper alternatives that would help people on the cusp of Medicaid eligibility.

“In the last two sessions, I had legislation that created a Nebraska State Health Savings Account,” Riepe said. “My interest was to try to allow individuals and 401(k) accounts to contribute with a tax credit and try to relieve some of the pressure of insurance costs.

“I’m a firm believer in individuals having some skin in the game,” Riepe said.

‘New, Permanent Costs’

Adam Weinberg,​ communications and outreach director at the Platte Institute for Economic Research, says Medicaid expansion would reduce funding for other programs.

“Most voters will probably side with expansion,” Weinberg said. “And that will leave lawmakers with the decision of how to fund the program. Nebraska has the resources, but they will come with opportunity costs, so even with the federal government paying the lion’s share of the program, the state is going to have new, permanent costs that are never going to go away.

“A dollar that goes into Medicaid expansion can’t go into K-12 education, can’t go into property tax relief, which is a big concern for the state legislature to address,” Weinberg said. “Those priorities will have to take a back seat as the cost for Medicaid expansion grows.”

Poor Cost Estimates

Weinberg says helping needy people buy insurance instead of adding them to the Medicaid rolls would be better for the taxpayers and recipients alike.

“You could broaden access to subsidies so that more people would have support for private insurance,” Weinberg said. “Typically, states have underestimated the costs of Medicaid expansion because they’ve under-projected the number of patients who are going to choose to enroll in Medicaid once they’re eligible. And they won’t be people who are in the gap population, the folks who are not covered by the subsidies. They will, in some cases, be people who have insurance right now, but it would be more attractive for them to enroll in Medicaid. If they work fewer hours or change something about their life, then they would be eligible for Medicaid.

“That is one of the factors states have had to deal with in terms of the number of people who have been opting in for Medicaid expansion,” Weinberg said.


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