Medicaid cuts would be painful in all states, but Nevada would get hurt more than most

You know how when big bad national things happen they always seem to hit Nevada harder than other states?

Republicans cutting Medicaid would be like that.

An analysis published Thursday by the KFF health research organization examines the impacts of one prominent proposal congressional Republicans are considering to help pay for massive corporate tax cuts demanded by Donald Trump: eliminating the federal funding match for Medicaid expansion under the Affordable Care Act.

Medicaid expansion in the ACA was designed to cover lower income people who had not been eligible for Medicaid in the past, namely adults without children, who satisfied income requirements (currently no more than $21,597 for an individual, $29,187 for a family of two, etc.)

The federal government picks up 90% of the cost of the ACA Medicaid expansion and states pick up the other 10%. 

It’s always been a good deal for states. In legacy, pre-ACA Medicaid that covers folks like families and some seniors who meet income requirements, pregnant women, or people with disabilities, the federal government picks up about 60% of the cost in Nevada (the federal match rate is determined by per capita income in each state), and the state of Nevada is responsible for the other 40%.

If Trump and Republicans killed the 90% match, and Nevada decided to keep insuring everybody anyway by covering them under the 60%-40% split,  KFF estimates it would cost the state $6.7 billion over the ten years.

That roughly $670 million a year would be equivalent to about 10% of the total state general fund spending in Gov. Joe Lombardo’s proposed budget over the next two years.

The state of Nevada is not structurally, systemically or politically capable of coming up with the kind of money to continue Medicaid coverage for 320,000 Nevadans if the 90% match goes away.

And 320,000 is the number of Nevadans the KFF analysis estimates would lose coverage if the state just decided not to pay, and instead drop coverage for those who had been covered under the ACA expansion.

According to KFF’s state-by-state analysis, only two states and the District of Columbia would see a larger portion of Medicaid enrollees lose coverage. 

In most of the 40 states and D.C. that chose to expand Medicaid under the ACA (it’s optional), less than 30% of Medicaid enrollees would lose coverage. 

Trump and Republicans cutting Medicaid would be painful in all the states, but Nevada would be hurt more than most.

Nevada employers are especially reliant on Medicaid

The Affordable Care Act intended to expand Medicaid nationwide. But when the U.S. Supreme Court upheld the Affordable Care Act in 2012, the court ruled states that wanted to opt in to Medicaid expansion could, and those that didn’t could decline.

Nevada was one of the early volunteers. When expanded Medicaid was made available at the start of 2014, then-Gov. Brian Sandoval became the first — and for quite some time, only — Republican governor in the country to opt their state into the expansion.

When Sandoval was governor, Nevada had been one of the states joining suits to overturn the entire Affordable Care Act as unconstitutional. But Sandoval ended up signing on to expanded Medicaid, because whatever ideological or legal objections he had to “Obamacare,” he was not a fool — as mentioned above, the federal government picks up 90% of the cost.

Prior to the Medicaid expansion, Nevada for many years had been among states with the highest percentage of adults with no health insurance.

That was attributed in large part to the texture, or lack thereof, of the state’s economy. The Culinary union’s hard-won contracts notwithstanding, the vast majority of workers in Nevada’s extremely service sector-heavy economy were not covered by those contracts. Instead, those employees were in jobs where neither the pay nor the benefits were anywhere near those enjoyed by Culinary workers on the Strip.

A battery plant, a football stadium, and tax breaks for hundreds of businesses later, that texture, or lack thereof, still heavily characterizes Nevada’s economy and workforce.

There are still hundreds of thousands of workers in relatively low-paying jobs where employers do not provide affordable health care coverage. Nearly half of all Nevada Medicaid enrollees, 380,000, are people with jobs and their dependents. Many of those workers are employed by the likes of Amazon, Wal-mart, Las Vegas resort corporations, and the state of Nevada. 

Which illustrates another reason why Medicaid cuts would hurt more people in Nevada, proportionally, than in other states: Not only would the percentage of people who would lose coverage be higher, and the state’s capacity to compensate for that lower. If Nevada decided to reverse course, opt out of expanded Medicaid, and drop coverage on 320,000 people, the track record indicates the private sector will fail to fill the void by providing coverage.

Nevada would once again have one of the highest rates of uninsured adults in the nation.

But wait there’s more, er, less

Earlier this month state Senate Democrats wrote a letter to the state Department of Health and Human Services and the governor’s office asking how much various Medicaid cuts, including cuts to the Medicaid expansion federal match, could cost Nevada, how many people could lose coverage, if and how the state government could deal with it, and what the impacts would be to health providers and systems.

The senators hope to get the report by Feb. 18. That report might project impacts smaller than those estimated by KFF. Or bigger.

But whatever the specifics estimates, or range of estimates, provided to state lawmakers, we already know the scale of the numbers guarantees financial costs of Medicaid cuts will be far bigger than Nevada can shoulder, and the human cost far more hurtful than anyone wants to consider.

Meanwhile, one other piece of KFF’s analysis warrants mention. According to the projections, if Nevada decided to just no longer cover those 320,000 people under Medicaid, sure, that would reduce state spending. But it would dramatically reduce the amount of federal money coming to the state — and to its health providers and the health industry.

KFF estimates the loss at $22 billion a year over a decade.

It’s hard to know what that would mean for the quality and availability of care in a state that already suffers a shortage of medical care providers. Nothing good, surely.

And the impact wouldn’t be isolated to that industry. That would be $2.2 billion a year taken out of Nevada’s economy, nearly a full percentage point of Nevada’s gross domestic product.

Correction: This column originally misstated the budgetary and economic costs of eliminating the federal Medicaid expansion rate.