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UNMC report details what Medicaid expansion would mean in Nebraska

Report says expansion of Nebraska's Medicaid program under the Affordable Care Act (ACA) would bring in at least $2.9 billion in revenue from the federal government by 2020.

Expansion of Nebraska’s Medicaid program under the Affordable Care Act (ACA) would bring in at least $2.9 billion in revenue from the federal government by 2020,  potentially finance over 10,000 on-going jobs, and reduce charity care by $650 million from 2014-2019, a report released today by a center at the University of Nebraska Medical Center indicates.

The report is based on a study conducted by Jim Stimpson, Ph.D., director of the Center for Health Policy and associate professor in the UNMC College of Public Health.

“Medicaid expansion is an important decision for each state, and these results indicate that it would have a huge impact on Nebraska,” Dr. Stimpson said.

On June 28, the U.S. Supreme Court upheld the ACA but ruled that the ACA provision expanding the Medicaid program for individuals from 100 percent of the federal poverty level (FPL) to 133 percent of the FPL is optional for states.

For those states opting in for Medicaid expansion, the federal government would pay 100 percent of the cost of Medicaid expansion between 2014 and 2016, with that amount decreasing incrementally to 90 percent by 2020.

For Nebraska, if Medicaid were expanded, it would bring in between 90,021 and 108,025 new enrollees through 2020, Dr. Stimpson’s report indicated. From 2014 to 2020, the total estimated cost of this expansion for the state of Nebraska would range from $140 million to $168 million. The report did not calculate potential savings to the state government from expansion.

The report indicated that these additional costs would be significantly outweighed by an influx in federal funding, which would range from $2.9 billion to $3.5 billion through 2020. That funding would:

  • Generate at least $700 million in economic activity every year;
  • Potentially finance more than 10,000 on-going jobs; and
  • Save between $163 million and $325 million from costs associated with uncompensated care, which is typically provided now through the uninsured persons’ visits to emergency rooms.

Without Medicaid expansion, Dr. Stimpson said more than $1 billion in uncompensated care would be provided through 2019 which is often shifted to individuals and employers in the form of higher insurance premiums, sometimes referred to as the “silent tax.” Dr. Stimpson said that the decision to expand Medicaid could have a significant impact on the cost of individual and employer health insurance premiums.

The ACA provides federal tax credits and subsidies for persons to purchase insurance in health insurance exchanges. However, these benefits would not be available for most people who would be eligible for the Medicaid expansion. States that decide not to expand Medicaid eligibility will face a coverage gap or “doughnut hole” of insurance coverage options for the poor and uninsured.

Dr. Stimpson noted that states joining the expansion program later than 2014 might risk losing the 100 percent federal match.

Read the full study at: http://www.unmc.edu/publichealth/docs/medicaidexpansion.pdf.

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Vicky Cerino
UNMC Public Relations
(402) 559-5190
vcerino@unmc.edu