Governor Monthly Column

Dear Fellow Nebraskans:
I want Nebraskans to be aware of recent actions taken by some members of the Legislature that could cost Nebraskans millions of their hard-earned taxpayer dollars and would be at the expense of our state priorities. Lincoln State Senator Kathy Campbell and Omaha State Senator Jeremy Nordquist have introduced a new Obamacare Medicaid expansion bill, LB 887, which is 40 percent more expensive than the bill they introduced last year.
Expanding Medicaid would mean less future funding for state aid to education for our K-12 schools, special education, early children programs, and higher education including the University of Nebraska, Chadron State College, Wayne State College, Peru State College and Nebraska’s six community colleges.
Medicaid funding is one of the largest programs in state government and one of the fastest growing programs in the state budget. The two-year budget approved last year by the Legislature increased Medicaid spending by $433 million in state and federal funds, an amount larger than most state agency budgets.
Under this new Obamacare expansion bill, Medicaid would cover a new category of adults and increase funding significantly. It is estimated that this new attempt at expanding Medicaid would cost more than $3.3 billion in state and federal funds through fiscal year 2019-20. For the same time period an additional $143 million of taxpayer dollars would be needed to develop, implement and administer the complex requirements in the bill. Nebraska cannot afford this expansive and expensive Obamacare Medicaid expansion program.
Advocacy groups that support Obamacare will tell you this is “free” federal money, because it is 100 percent federal money the first few years and by the end of the next five years, the federal government will pay 90 percent of the costs with the state paying for 10 percent. However, we all know that “free” federal dollars is actually your hard-earned money. It’s not free money.
Expanding Medicaid will result in hundreds of millions of dollars in new state spending. In addition, there are many parts and expenses to expanded Medicaid and only the services portion of the Medicaid expansion would be paid with 100 percent federal funds. The administrative costs; however, require state matching funds, beginning day one. The costs to the state are enormous.
LB 887’s premium assistance program requires Medicaid to provide additional “wrap around” benefits that are not available to current Medicaid clients, and to pay all deductibles and copays. These premiums for private insurance are based on provider rates which are significantly higher than Medicaid provider rates.
Expanding enrollment in Medicaid will also exacerbate the problem with access to health care as many providers limit the number of Medicaid clients they see. Access to care issues always adds pressure to increase provider rates, which would further increase the cost to the state budget.
According to estimates from an actuarial firm, this Medicaid expansion plan will cost 40 percent more in combined federal and state funds than the original Medicaid expansion bill.
The facts are clear: LB 887, Obamacare’s Medicaid expansion program, is too expensive and will result in less future funding for the education of our children.

- Dave Heineman
    Governor of Nebraska